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

Author

Listed:
  • Alice Pizzo

    (Copenhagen Business School)

  • Christina Gravert

    (Department of Economics, University of Copenhagen)

  • Jan M. Bauer

    (Copenhagen Business School)

  • Lucia Reisch

    (University of Cambridge, Judge Business School)

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 shows 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, 2024. "Carbon Taxes Crowd Out Climate Concern: Experimental Evidence from Sustainable Consumer Choices," CEBI working paper series 24-16, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    • Handle: RePEc:kud:kucebi:2416
    as

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    File URL: https://www.econ.ku.dk/cebi/publikationer/working-papers/CEBI-WP_16-24.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Behavioral response; Carbon pricing; Climate change; 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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