Effectiveness, earmarking and labeling: testing the acceptability of carbon taxes with survey data

Abstract

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

Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?

“…Only a small fraction of the population would use tax revenues to provide social cushioning, or to reduce existing taxes, and that in spite of the concerns expressed for distributional and competitiveness effects. Similar findings on this apparent inconsistency were already provided by Baranzini and Carattini (2017), based on a specific Swiss canton. Apparently, such concerns affect the decision to accept or not an energy tax at a given tax rate, but do not call for a diversion of revenues from environmental earmarking.…”

“…Based on a Norwegian sample, the authors find that perceived ineffectiveness of fuel taxes represents a major obstacle to acceptability. In this respect, Baranzini and Carattini (2017) find that acceptability depends on the expectation of both primary and ancillary benefits. Earmarking revenues for environmental purposes contributes to reduce the hostility to a carbon tax, as well as renaming it "climate contribution".…”

“…Being relatively confident that energy taxes provide an incentive to decrease energy consumption and to switch to cleaner sources is linked with a higher probability of a yes-vote. The magnitude of this effect may look relatively small if we compare with other survey studies testing the effect of perceived effectiveness on acceptability in a similar fashion, such as Baranzini and Carattini (2017). However, assessing the relevance of this and the other effects should take into account the overall outcome of the ballot, very well replicated by the VOX survey.…”

“…Qualitative assessments using focus groups have helped understanding the obstacles to the European Environmental Tax Reform (Dresner et al 2006) and to environmental taxes more generally (Kallbekken and Aasen 2010). Qualitative surveys have also been used to orient quantitative surveys, as in Baranzini and Carattini (2017).…”

“…Furthermore, respondents are informed by the introductory material that the current carbon tax on heating and process fuels is mostly redistributed through lump-sum transfers and it may be that this information could have increased the legitimacy of this type of recycling. This information is public, but according to Baranzini and Carattini (2017), only a limited number of individuals are aware of the current carbon tax on heating and process fuels, and an even smaller proportion may know how its revenues are redistributed (e.g. one fourth of the 1012 respondents interviewed in INFRAS 2015).…”