This study uses a computable general equilibrium model to analyze various policy scenarios for a carbon tax on greenhouse gas emissions from petroleum fuels and kerosene in Ethiopia. The carbon tax starts at $5 per ton of carbon dioxide in 2018 and rises to $30 per ton in 2030.

The paper discusses challenges in analyzing the costs of household cooking methods (fuels and associated stove technologies) in lower-income countries, and sources of divergence between observed and true social costs.

Improving the resilience of the economy in the face of uncertain climate change damages involves irreversible investments to scale up new technologies that are less vulnerable to the effects of climate change.