Abstract
This paper analyzes the drivers of carbon taxes acceptability with survey data and a randomized labeling treatment. Based on a sample of more than 300 individuals, it assesses the effect on acceptability of specific policy designs and individuals’ perceptions of carbon taxes advantages and disadvantages. We find that the lack of perception of primary and ancillary benefits is one of the main barriers to the acceptability of carbon taxes. In addition, policy design matters for acceptability and in particular earmarking fiscal revenues for environmental purposes can lead to larger support. We also find an effect of labeling, comparing the wording “climate contribution” with “carbon tax”. We argue that proper policy design coupled with effective communication on the effects of carbon taxes may lead to a substantial improvement in acceptability.
Highlights
In recent decades, international negotiations have aimed at stabilizing the concentration of greenhouse gases at levels that would prevent dangerous interferences with the climate system
Fourth, contrasting the labels ‘‘carbon tax’’ and ‘‘climate contribution’’, we show that labeling can spur acceptability in the street and in the lab. ‘‘Climate contribution’’ may sound as an appeal to the public good, recalling to the general public the urgency of climate change mitigation
Albeit the political discourse generally focuses on the negative impacts on competitiveness and distributional effects, the data analyzed here indicate that individuals are more concerned by the environmental effectiveness of the tax
Summary
International negotiations have aimed at stabilizing the concentration of greenhouse gases at levels that would prevent dangerous interferences with the climate system. Dresner et al (2006) first raised the issue of perceived environmental ineffectiveness: the general public tends to miss the incentive effect of carbon taxes, expecting tax revenues to be earmarked for environmental purposes. When this is not the case, most people feel that carbon taxes are just a pretext to raise fiscal revenues. This may lead Pigouvian taxes to be more popular if not labelled as such: in the lab experiment of Kallbekken et al (2011), a ‘‘fee’’ is preferred to an equivalent instrument called ‘‘tax’’ We improve this recent literature using survey data and a randomized labeling treatment to test the effect of several policy variables and perceptions on acceptability. The lack of popularity of carbon taxes has limited its implementation in virtually all political contexts in developed countries
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