This study assesses the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. It finds strong evidence that, in most lower-income countries, the first-order income effect of carbon pricing would be progressive. Neglecting medium- to long-term adjustment processes, the disposable income of the poorest group is reduced by 0.2–5.5%. The study also observes that carbon pricing tends to be more regressive in richer countries. Building on a consistent dataset and method, the authors find that, for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD), carbon pricing is likely to be progressive (and regressive above this threshold). This turning point can be explained by an inverse U-shape of the energy expenditure to income relationship—energy expenditure shares increase up to a household per capita income of around USD8,000–10,000 (PPP-adjusted) and decrease thereafter. Overall, the findings suggest that mitigating climate change, raising domestic revenue, and reducing economic inequality are not mutually exclusive, even in low- and middle-income countries.