The efficiency effects of carbon pricing depend on how it impacts distortions in fossil fuel markets, most notably from local air pollution externalities. By offsetting these distortions, carbon pricing may generate significant net economic benefits, so it is in countries own interests to...

This paper discusses techniques for measuring the incidence of carbon taxes across different household income groups and provides some cross-country estimates of these effects for selected advanced countries. The general message of this paper is that distributional concerns should not...