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The Unequal Costs of Carbon Pricing: Economic and Political Effects Across European Regions

Maximilian Konradt & Giacomo Mangiante

The Economic Journal2026https://doi.org/10.1093/ej/ueaf133article
AJG 4ABDC A*
Weight
0.41

Abstract

This paper examines the economic and political effects of carbon pricing across European regions. Our main finding is that a well-identified increase in carbon prices reduces emissions but entails economic and political costs: higher carbon prices significantly reduce output and employment while increasing vote shares for extremist and populist parties, contributing to political fragmentation. Consistent with an economic voting channel, opinion surveys reveal a more pessimistic economic outlook and declining environmental concerns among respondents. Importantly, the economic and political costs are not borne equally: carbon-intensive regions experience a larger decline in output and see a stronger shift to extremist political parties. Our findings highlight the need for complementary policies to mitigate the unequal economic impacts of carbon pricing and the associated political backlash.

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https://doi.org/https://doi.org/10.1093/ej/ueaf133

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@article{maximilian2026,
  title        = {{The Unequal Costs of Carbon Pricing: Economic and Political Effects Across European Regions}},
  author       = {Maximilian Konradt & Giacomo Mangiante},
  journal      = {The Economic Journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1093/ej/ueaf133},
}

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.