Distributional Impacts

The document outlines how carbon pricing instruments (CPIs) can create varied socio-economic impacts across different households and regions, noting that risks are higher in developed countries or areas with high existing poverty where low-income groups rely on fossil fuels. It argues that these negative impacts can be offset through policy design and the strategic use of carbon revenues, while emphasizing that such mitigations must not compromise the primary objective of reducing emissions.

• Carbon Pricing Instruments (CPIs) produce varying socio-economic effects depending on the policy's ambition, design, local context, and the specific household or region affected.
• CPIs tend to be more progressive in developing countries because lower-income populations there have less access to fossil fuels than those in developed countries.
• Negative distributional impacts are most likely where there is high existing poverty and inequality and a reliance on fossil fuel-based energy, but these can be mitigated by adjusting policy design and using carbon revenues to offset harms.

APA

Climate Strategies (2020). Distributional Impacts. https://climatestrategies.org/publication/cplc-distributional-impacts/

Chicago

Climate Strategies. Distributional Impacts. 2020. https://climatestrategies.org/publication/cplc-distributional-impacts/.

Wikipedia

{{cite report |author=Climate Strategies |title=Distributional Impacts |date=10 March 2020 |url=https://climatestrategies.org/publication/cplc-distributional-impacts/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatestrategies2020distributional, author = {{Climate Strategies}}, title = {{Distributional Impacts}}, institution = {Climate Strategies}, year = {2020}, month = mar, url = {https://climatestrategies.org/publication/cplc-distributional-impacts/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }