Carbon tax for cleaner-energy transition: A vignette experiment in Japan

People worldwide aim to reduce the adverse impacts from carbon emissions by adopting clean energy sources. While the literature identifies potential policies, such as carbon taxes, to address this issue, few studies have investigated how these policies can be concretely designed to facilitate cleaner-energy transition. We pose a question of how a carbon tax can be an effective instrument at transitioning to clean energy and hypothesize that providing a set of crucial information with respect to the tax persuades people to support it. We experimentally examine the determinants influencing public support for the introduction of a carbon tax via a vignette experiment with 1500 Japanese subjects. The vignette policy dimensions include “who pays the tax,†“how the tax gets paid,†“where the revenue gets used†and “how much the burden becomes,†each of which is introduced as a treatment with the baseline of “no information†provision. The results indicate that public support comparatively increases when the entities specified to pay are producers, when the tax revenue is used towards renewable energies and when the burden is sufficiently low. Overall, we demonstrate that a carbon tax can be an effective policy instrument for cleaner-energy transition, while garnering public support and ample revenue. To this end, it is necessary to inform people that the carbon-tax policy design targets producers and renewable energy along with a per-capita burden between 500 JPY to 3000 JPY a month.