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Carbon Taxes Crowd Out Climate Concern: Experimental Evidence from Sustainable Consumer Choices

Author

Listed:
  • Alice Pizzo
  • Christina Gravert
  • Jan M. Bauer
  • Lucia Reisch

Abstract

We examine the impact of a carbon tax on consumer choices via a large-scale online randomized controlled trial. Higher taxes generally reduce the demand for high-carbon goods. Compared to an import tax, a carbon tax reduces demand when the tax is zero (i.e., announced but not levied) but leads to relatively higher demand for high-carbon goods when a positive tax is introduced. This contradiction of basic price theory is entirely driven by climate-concerned consumers. Our findings suggest that carbon taxes can crowd out climate concerns, leading to important implications for policy.

Suggested Citation

  • Alice Pizzo & Christina Gravert & Jan M. Bauer & Lucia Reisch, 2025. "Carbon Taxes Crowd Out Climate Concern: Experimental Evidence from Sustainable Consumer Choices," CESifo Working Paper Series 11719, CESifo.
    • Handle: RePEc:ces:ceswps:_11719
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    More about this item

    Keywords

    behavioral response; carbon pricing; climate change; climate policy; experiment; moral licensing;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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