Abstract
This paper investigates the distributional impacts of carbon pricing instruments (CPIs), focusing on the European Emissions Trading System (EU-ETS) at the NUTS2 level. While literature has primarily examined vertical inequalities across income groups, this study adopts a spatial perspective to assess whether CPIs exacerbate or mitigate regional disparities. Using a novel “regional carbon burden” indicator—constructed from EU-ETS compliance data weighted by allowance prices—and applying quantile regressions, the analysis explores the effects on territorial development, with particular attention to green innovation. By integrating environmental economics and regional science, the study contributes to debates on CPIs’ role in promoting cohesion and a just low-carbon transition.