With country-specific development objectives and constraints, multiple market failures, and limited international transfers, carbon prices do not need to be uniform, but have to be part of broader policy packages. There is broad agreement that achieving the objectives of the Paris Agreement and limiting warming to below 2°C in an efficient manner will require the implementation of national carbon prices that increase throughout the 21 st century. 1 According to the High-Level Commission on Carbon Prices, the explicit carbon-price level consistent with achieving this target, assuming a supportive policy environment, is at least US$40-80/tCO2 by 2020 and $50-100/tCO2 by 2030. 1 The Commission's report recommends carbon price levels tailored to a country's characteristics, including its income level, the quality of its institutions, its endowment in renewable energy and other key resources, its economic structure, its social protection systems, its political situation, and many other factors. This is at odds with basic economic theory, which argues that an equal price for all regions and sectors, whether through a tax or cap-and-trade, is the most effective and efficient tool to reduce emissions. This paper discusses three reasons why-consistent with the Commission's recommendation-carbon prices should and will differ across countries. First, political limits to financial transfers between countries as well as differing national contexts and development levels justify lower carbon prices in developing countries. Second, multiple market failures, such as those regarding innovation, mean that carbon pricing needs to be complemented with other policies, and their nature and ambition impact the final carbon price to achieve a given objective. Third, non-climate development objectives (and the policies to achieve them) interact with climate goals, and influence the adequate carbon price level.