Poverty and distributional effects of carbon pricing in low- and middle-income countries – A global comparative analysis (World Development)

This article in the World Development journal by Ira Irina Dorband, Michael Jakob, Matthias Kalkuhl and Christoph Steckel, assesses the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. According to the research, a carbon price of USD 30/tCO2 reduces income up to 2.5% for low-income households. Effects on income distribution are mostly driven by differences in energy expenditure shares. An inverse U-shape energy expenditure to income relationship explains distributional effects. Distributional effects of carbon pricing tend to be progressive in low-income countries. The article is available on the Science Direct website.