Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307702 
Year of Publication: 
2024
Series/Report no.: 
WIFO Working Papers No. 687
Publisher: 
Austrian Institute of Economic Research (WIFO), Vienna
Abstract: 
While the EU-wide carbon price has already been adopted for the buildings and transport sectors with ETSê2, detailed analyses of the macroeconomic and distributional effects (both within and between countries) are scarce. We use the macroeconomic model ADAGIO to estimate the effects of EU-wide carbon pricing. For two case study countries (Austria and Poland), which differ considerably in terms of the structure of their energy systems and economies, results are discussed along with the EU 27. We focus on the macroeconomic and GHG effects of the introduction of a carbon price under various revenue recycling options. Moreover, the distributional effects of the policy scenarios are investigated. The introduction of carbon pricing leads to negative macroeconomic effects for the EU 27, which vary in level depending on the recycling option as well as the assumed model closure and exchange rates. For Austria and Poland, slightly positive macroeconomic effects are found in some simulations. Additionally, our analysis confirms the efficiency-equity trade-off in the context of carbon pricing with respect to different revenue recycling options.
Subjects: 
carbon pricing
revenue recycling
macroeconomic effects
distributional impacts
multi-regional Input-Output modelling
JEL: 
Q54
Q58
H23
C67
D57
Document Type: 
Working Paper

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