Distributing the Impacts of Carbon Pricing in CEE

Project

To come up with solutions, a thorough understanding of carbon pricing’ distributional effect of and of the interaction between climate policy and energy poverty is essential. To this end, the project team conducts a study on the effects of increasing carbon costs on economically vulnerable groups. It focuses on four Eastern European EU members (Bulgaria, Hungary, Poland, and Romania) with higher-than-average fossil fuel dependence and energy poverty levels.

The study examines various aspects in which the distributional effect articulates itself, such as price responses, consumer behaviour adjustment, and labour market impacts (especially in carbon-intensive sectors).

Based on the findings, the project team makes policy recommendations on how to mitigate negative effects of carbon taxation, including redistributing additional tax revenues to ensure social justice and optimise social protection for vulnerable groups. To foster an informed debate on the interaction between climate policy and energy poverty, the project team conducts public consultations on key findings with relevant decision-makers at national and EU levels. The project team coordinates its activities with the EUKI project Socially Just Carbon Pricing Policies in CEE.