In this paper, we assess the distributional impact of introducing a carbon tax in Poland. We apply a two-step simulation procedure. First, we evaluate the economy-wide effects with a dynamic general equilibrium model. Second, we use a microsimulation model based on household budget survey data...

This study finds that a carbon tax could have some adverse impacts on GDP, inequality and household income. However, the impact is limited and could be reduced by using a well-designed revenue recycling scheme. The results come from research using the ESRI's environment, energy and economy (I3E)...