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Supporting carbon taxes: The role of fairness

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  • Sommer, Stephan
  • Mattauch, Linus
  • Pahle, Michael
Abstract
While the economic case for carbon pricing is compelling, public support for it remains low. Using a stated-choice experiment with a sample of 6000 German household heads, we examine how their fairness preferences influence support for carbon taxes under different revenue uses. We find that respondents who prefer green spending are more likely to support a carbon tax, but the support diminishes considerably for higher tax rates – in contrast to respondents who support social cushioning. When restricted to options for direct revenue redistribution, Germans prefer lump-sum payments over directing payments to the poorest or the most affected. Preferences over these options depend both on genuinely different concepts of fairness and economic circumstances. Our findings have implications for advancing carbon pricing, as its support can be increased substantially when designed according to citizens' fairness preferences.

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  • Sommer, Stephan & Mattauch, Linus & Pahle, Michael, 2022. "Supporting carbon taxes: The role of fairness," Ecological Economics, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:ecolec:v:195:y:2022:i:c:s0921800922000210
    DOI: 10.1016/j.ecolecon.2022.107359
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    More about this item

    Keywords

    Carbon pricing; Climate change mitigation; Fairness; Redistribution; Environmental tax reform; Public support;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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