  Carbon prices are one of the most prominent methods to reduce global
greenhouse gas emissions and have been adopted by several countries around the
world. However, regionally different carbon prices can lead to carbon leakage.
We investigate a simplified European power system where carbon prices are
varied with respect to GDP per capita and find that inhomogeneous carbon prices
lead to significant carbon leakage due to coal-fired generation remaining a
major source of power in Eastern Europe.
