This paper discusses techniques for measuring the incidence of carbon taxes across different household income groups and provides some cross-country estimates of these effects for selected advanced countries. The general message of this paper is that distributional concerns should not...

Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark’s mitigation strategy, pricing needs to be effective, address equity and leakage concerns,...

This essay provides an overview of the major emissions trading programs of the past thirty years on which significant documentation exists, and draws a number of important lessons for future applications of this environmental policy instrument. References to a larger number of other emissions...

We collect data on 24,000 state aid cases within the European Union to create granular measures of national environmental support and study their interactions with the European Union Emissions Trading System (EU ETS). Exploiting variation in regulated installations' exposure to carbon prices and...

Most businesses recoup their investments in property, plant, and equipment from theincome they earn from using those assets. When changes in markets, technology, or regulations reduce income from those assets or increase operating costs, businesses may not recover their full investments in those...

There is growing interest in international coordination over climate mitigation policy. Climate clubs or international carbon price floors could complement the Paris Agreement by helping to deliver the near-term cuts in global greenhouse gas emissions needed to contain global warming to 1.5 to...

This paper develops an analytical model to quantify the costs and distributional effects of various fiscal options for allocating the (large) rents created under prospective cap-and-trade programs to reduce domestic, energy-related carbon dioxide (CO2) emissions. The trade-off between...

Carbon tax revenue recycling – returning tax revenue to firms or households that are covered by the carbon tax – can potentially increase political acceptance for carbon taxation and prevent undesirable distributional outcomes and off-shoring. This paper uses a stylized theoretical model to...

While the potential of carbon pricing to curb CO2 emissions is widely acknowledged, the instrument keeps being disputed due to its potential regressivity and the burden it places on low-income households. Recently also the issue of horizontal inequalities has gained in importance in political...

This article summarizes insights from the 36th Energy Modeling Forum study (EMF36) on the magnitude and distribution of economic adjustment costs of greenhouse gas emission reduction targets. Under the Paris Agreement, countries have committed to emission reduction targets - so-called Nationally...