@misc{DorbandJakobKalkuhletal.2018,
  author    = {Dorband, Ira Irina and Jakob, Michael and Kalkuhl, Matthias and Steckel, Jan Christoph},
  title     = {Poverty and distributional effects of carbon pricing in low- and middle- income countries},
  series = {Postprints der Universit{\"a}t Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe},
  journal   = {Postprints der Universit{\"a}t Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe},
  number    = {103},
  issn      = {1867-5808},
  doi       = {10.25932/publishup-42459},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-424592},
  pages     = {12},
  year      = {2018},
  abstract  = {Even though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing, the existing literature reveals ambiguous results. For this reason, we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. Building on a consistent dataset and method, we find that for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD) carbon pricing has, on average, progressive distributional effects. We also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy, rather than of food, goods or services. We argue that an inverse U-shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income. Since these countries are likely to have more financial resources and institutional capacities to deal with distributional issues, our findings suggest that mitigating climate change, raising domestic revenue and reducing economic inequality are not mutually exclusive, even in low- and middle-income countries.},
  language  = {en}
}
@techreport{FranksKalkuhlLessmann2022,
  type      = {Working Paper},
  author    = {Franks, Max and Kalkuhl, Matthias and Lessmann, Kai},
  title     = {Optimal Pricing for Carbon Dioxide Removal Under Inter-Regional Leakage},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {43},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-53808},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-538080},
  pages     = {12},
  year      = {2022},
  abstract  = {Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best subsidies for CDR when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage, terms-of-trade and fossil resource rent dynamics. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, terms-of-trade effects exacerbate this wedge for net resource exporters, implying even larger removal subsidies. Third, the optimal removal subsidy may fall below the carbon tax for resource-poor countries when marginal environmental damages are small.},
  language  = {en}
}
@article{LilliestamPattBersalli2020,
  author    = {Lilliestam, Johan and Patt, Anthony and Bersalli, German},
  title     = {The effect of carbon pricing on technological change for full energy decarbonization},
  series = {Wiley interdisciplinary reviews : Climate change},
  volume    = {12},
  journal   = {Wiley interdisciplinary reviews : Climate change},
  number    = {1},
  publisher = {Wiley},
  address   = {Hoboken},
  issn      = {1757-7780},
  doi       = {10.1002/wcc.681},
  pages     = {21},
  year      = {2020},
  abstract  = {In order to achieve the temperature goals of the Paris Agreement, the world must reach net-zero carbon emissions around mid-century, which calls for an entirely new energy system. Carbon pricing, in the shape of taxes or emissions trading schemes, is often seen as the main, or only, necessary climate policy instrument, based on theoretical expectations that this would promote innovation and diffusion of the new technologies necessary for full decarbonization. Here, we review the empirical knowledge available in academic ex-post analyses of the effectiveness of existing, comparatively high-price carbon pricing schemes in the European Union, New Zealand, British Columbia, and the Nordic countries. Some articles find short-term operational effects, especially fuel switching in existing assets, but no article finds mentionable effects on technological change. Critically, all articles examining the effects on zero-carbon investment found that existing carbon pricing scheme have had no effect at all. We conclude that the effectiveness of carbon pricing in stimulating innovation and zero-carbon investment remains a theoretical argument. So far, there is no empirical evidence of its effectiveness in promoting the technological change necessary for full decarbonization. This article is categorized under: Climate Economics > Economics of Mitigation},
  language  = {en}
}