1. Overcoming public resistance to carbon taxes
- Author
-
Samuel Fankhauser, Maria Carvalho, and Stefano Carattini
- Subjects
revenue recycling ,Atmospheric Science ,H23 ,020209 energy ,Geography, Planning and Development ,public support ,Opposition (politics) ,Climate change ,02 engineering and technology ,010501 environmental sciences ,Public opinion ,01 natural sciences ,D72 ,acceptability ,0202 electrical engineering, electronic engineering, information engineering ,Economics ,D78 ,carbon pricing ,0105 earth and related environmental sciences ,carbon taxes ,HB Economic Theory ,Global and Planetary Change ,Stylized fact ,Public economics ,Q54 ,business.industry ,Economics of Mitigation ,13. Climate action ,Advanced Review ,Advanced Reviews ,business ,Public support ,GE Environmental Sciences - Abstract
Carbon taxes represent a cost-effective way to steer the economy toward a greener future. In the real world, their application has however been limited. In this paper, we address one of the main obstacles to carbon taxes: public opposition. We identify drivers of and barriers to public support, and, under the form of stylized facts, provide general lessons on the acceptability of carbon taxes. We derive our lessons from a growing literature, as well as from a combination of policy "failures" and "successes." Based on our stylized facts, we formulate a set of suggestions concerning the design of carbon taxes. We consider the use of trial periods, tax escalators, environmental earmarking, lump-sum transfers, tax rebates, and advanced communication strategies, among others. This paper contributes to the policy debate about carbon taxes, hopefully leading to more success stories and fewer policy failures. This article is categorized under: Climate Economics > Economics of Mitigation.
- Published
- 2018