Distributional Impact of Carbon Pricing in Central and Eastern Europe

The report from EUKI project Distributing the Impacts of Carbon Pricing in CEE examines the effectiveness of carbon pricing as a strategy for reducing GHG emissions. It highlights the role of carbon taxes and emissions trading systems (ETS) in incorporating the cost of emissions into economic decisions, ultimately leading to lower emissions.

The study assesses the economic impact of a hypothetical carbon tax in Bulgaria, Germany, Hungary, Poland, and Romania, targeting a 40% reduction in emissions by 2032. The evaluation utilises the MEMO model to analyse macroeconomic effects on GDP and employment, and the QUAIDS model to study welfare impacts on households.