Indicators of income poverty, material deprivation, or energy-related deprivation should ideally be included in such analyses. This is referred to as the efficiency-equity trade-off. Revenue-recycling should be designed so that benefits for consumers and producers are as large as possible while negative regressive effects for poorer households are avoided. An Empirical simulation found that a carbon tax in China could have progressive impacts if revenues are recycled in a lump-sum fashion (i.e., a one-time payment). One important reason for this is the difference in energy use in rural vs. urban areas. Poor rural areas would be over-compensated by a lump-sum revenue recycling scheme.