Methodology
We sketch our methodology to investigate the distributional impacts of carbon pricing policies. A thorough, in-depth description of our approach and its limitations is currently under preparation, but can also be found in peer-reviewed scientific literature, which we list below.
- We combine country-level household budget surveys and multi-regional input-output data.
- Household budget surveys provide information about household-level expenditure shares and household characteristics, such as socio-demographics, energy use or location. The data is nationally representative.
- For each household we extract expenditure shares for 65 different sectors. Expenditure shares follow from households’ information about their consumption behavior.
- We use multi-regional input-output data based on the Global Trade Analysis Project (GTAP) to calculate country- and sector specific embedded CO2-intensities. Such CO2-intensities reflect the amount of CO2-emissions that can be attributed to one unit of output from each sector.
- We combine household- and sector-level expenditure shares with sector-level CO2-intensities to derive a households’ carbon footprint, which expresses how many CO2-emissions can be attributed to the total household consumption.
- We calculate first-order absolute additional costs to households by multiplying carbon footprints with a carbon price, for example USD 40/tCO2.
- We calculate first-order relative additional costs to households by dividing absolute additional costs by total household expenditure. We express relative additional costs to households in % of total household expenditure.
- The selection of countries available in CPIC is constrained by data availability. If you have additional data that could be featured please get in touch via email.
- We have carefully checked data, calculations and displayed results. Nevertheless, our results remain without any guarantee or liability on our part. Please feel encouraged to report any bugs or data issues to cpic@mcc-berlin.net. Thank you!
You can find an FAQ document and a more detailed description of the methodology and used data sources in the supplementary documents below. In addition, we have listed some of our associated scientific publications.