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How to Increase Public Support for Carbon Pricing

Author

Listed:
  • Andrej Woerner

    (LMU Munich)

  • Taisuke Imai

    (University of Osaka)

  • Davide Pace

    (LMU Munich)

  • Klaus Schmidt

    (LMU Munich)

Abstract

The public acceptability of a carbon price depends on how the revenues from carbon pricing are used. In a fully incentivised experiment with a large representative sample of the German population, we compare five different revenue recycling schemes and show that support for a carbon price is maximised by a “Climate Premium” that pays a fixed, uniform, upfront payment to each person. This recycling scheme receives more support than tax and dividend schemes, than using revenues for the general budget of the government, and than earmarking revenues for environmental projects. Furthermore, we show that participants and experts underestimate the public support for carbon pricing.

Suggested Citation

  • Andrej Woerner & Taisuke Imai & Davide Pace & Klaus Schmidt, 2023. "How to Increase Public Support for Carbon Pricing," Rationality and Competition Discussion Paper Series 489, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:489
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    More about this item

    Keywords

    carbon pricing; pigovian taxation; political support for carbon taxes; survey experiments;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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