Analysis of the Regional Impacts of the Austrian Carbon Price

In October 2022, the Austrian government has introduced a national price for CO2 emissions from energy use in the sectors not covered by the EU Emission Trading System. The carbon price has been introduced in the context of the Recovery and Resilience Facility (RRF) and represents the core of an ecological tax reform (so-called "eco-social tax reform"), with tax revenues being recycled to households via regionally differentiated lump-sum payments ("climate bonus payments") and to firms via compensation measures for exposed industry as well as for agriculture and forestry. The project aims at assessing the impact of this carbon price and the related climate bonus and firm compensation payments at the level of Austrian federal provinces. The envisaged analysis with the macroeconomic model ASCANIO will deliver insights into the effects on regional CO2 emissions, GRP, employment, and income distribution.