We assess the short-term consequences of a carbon tax in the French economy, and compare
some alternative accompanying policies making acceptable this measure in the country of the
“yellow vests”. We use a new-Keynesian business cycle model with heterogeneous agents to
assess the macroeconomic and redistributive effects of this carbon tax. The carbon tax acts as
a negative supply shock to the economy, causing a slowdown in economic growth, an increase in
inflation and a rise in household inequalities. We then show how these short-term recessionary
effects of the carbon tax would be completely mitigated by a more accommodative monetary
policy in a context where inequalities would be reduced. Thus, this policy mix clearly dominates
a purely fiscal policy that would redistribute to households the revenues of the carbon tax. For
the same impact on aggregates, we finally show that an accommodative monetary policy is more
efficient to reduce inequalities than an expansionary policy financing energy renovations.