This article explores how using money from carbon pricing to fund the EU budget could affect climate policies. By shifting funds from high-carbon to low-carbon countries, it could lead to less strict climate rules in the EU. If this happens, countries that are cleaner might prefer lower carbon prices, meaning weaker climate goals for the whole EU. In contrast, high-carbon countries might push for stronger climate measures. The study also looks at how the EU's climate decisions could impact global emissions and other parts of the world. Overall, centralizing carbon revenue in the EU might end up making EU climate policies less fierce and less debated.