Turning the Paris Agreement's greenhouse gas emissions pledges into domestic policies is the next challenge for governments. We address the question of the acceptability of cost-effective climate policy in a real-voting setting. First, we analyze voting behavior in a large ballot on energy taxes, rejected in Switzerland in 2015 by more than 2 million people. Energy taxes were aimed at completely replacing the current value-added tax. We examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. Most people would have preferred tax revenues to be allocated for environmental purposes. Second, at the same time of the ballot, we tested the acceptability of alternative designs of a carbon tax with a choice experiment survey on a representative sample of the Swiss population. Survey respondents are informed about environmental, distributional and competitiveness effects of each carbon tax design. These impacts are estimated with a computable general equilibrium model. This original setting generates a series of novel results. Providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking. Making distributional effects salient generates an important demand for progressive designs, e.g. social cushioning or recycling via lump-sum transfers. The case of lump-sum recycling is particularly striking: it is sufficient to show its desirable distributional properties to make it one of the most preferred designs, which corresponds to a completely novel result in the literature. We show that providing detailed information on the functioning of environmental taxes may contribute to close both the gap between acceptability ex ante and ex post and the gap between economists' prescriptions and the preferences of the general public.
Carbon pricing is a recurrent theme in debates on climate policy. Discarded at the 2009 COP in Copenhagen, it remained part of deliberations for a climate agreement in subsequent years. As there is still much misunderstanding about the many reasons to implement a global carbon price, ideological resistance against it prospers. Here, we present the main arguments for carbon pricing, to stimulate a fair and well‐informed discussion about it. These include considerations that have received little attention so far. We stress that a main reason to use carbon pricing is environmental effectiveness at a relatively low cost, which in turn contributes to enhance social and political acceptability of climate policy. This includes the property that corrected prices stimulate rapid environmental innovations. These arguments are underappreciated in the public debate, where pricing is frequently downplayed and the erroneous view that innovation policies are sufficient is widespread. Carbon pricing and technology policies are, though, largely complementary and thus are both needed for effective climate policy. We also comment on the complementarity of other instruments to carbon pricing. We further discuss distributional consequences of carbon pricing and present suggestions on how to address these. Other political economy issues that receive attention are lobbying, co‐benefits, international policy coordination, motivational crowding in/out, and long‐term commitment. The overview ends with reflections on implementing a global carbon price, whether through a carbon tax or emissions trading. The discussion goes beyond traditional arguments from environmental economics by including relevant insights from energy research and innovation studies as well. WIREs Clim Change 2017, 8:e462. doi: 10.1002/wcc.462 This article is categorized under: Climate Economics > Economics of Mitigation
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. Keywords Climate policy Á Carbon tax Á CO 2 emissions Á Political economy JEL Classification D72 Á H23 Á Q48 Á Q52 Á Q58
Using the hedonic approach, this paper analyses housing market data to infer the impact of noise on rents in Geneva, Switzerland. Using three different databases, including a geographical information system (GIS), structural, accessibility and environmental variables were obtained for a large proportion of apartments rented in Geneva. The paper is thus in line with the new generation hedonic models, which exploit the vast potential of GIS to obtain large databases including detailed characteristics of the apartments. In addition, different and original measures of noise were used in order to assess possible differences of the noise impact on rents, while existing studies typically refer to a single noise index. This paper assesses the impacts of noise related to all sources, but also to airport noise only, while existing studies usually refer to road or aircraft noise. The results can be summarised as follows. First, it is shown that the impact of all sources of noise on rents at the level of the whole canton is about 0.7 per cent per dB(A) and about 1 per cent when considering exclusively airplane noise, in the airport area. Secondly, this impact does not change fundamentally depending on the different measures of noise used in the estimations. Thirdly, the impact of noise does not depend on the institutional structure of the market-i.e. it is relatively similar in the private rental sector and in apartments directly under government control, although in the former the dynamic of noise has a greater impact. Fourthly, the results show that noise also has a higher economic impact, when the background noise level is lower. And fifthly, air pollution has a distinct impact on rents, in addition to noise.
We apply a hedonic model to the Geneva-Switzerland rental market to assess the value of view from dwellings and of land uses around buildings. Using a geographic information system, we calculate three-dimensional view variables, accessibility and land use variables. To our knowledge, this is the first paper to develop precise view measures at the dwelling level, considering surrounding land uses, in an urban context and with a large sample of 13,000 observations. The results show that view of various environmental amenities and its size has a significant impact on rents. The estimated rent premium for a dwelling located in a neighbourhood with an extended surface of water can be as high as 3 percent, and a view of water-covered area can raise rent up to 57 percent. JEL classification: Q5, R14, R52, R31, D62
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