Carbon tax acceptability with information provision and mixed revenue uses

• Published in: Nature communications 2021-12, Vol.12 (1), p.7017-7017, Article 7017
• Main Authors: Maestre-Andrés, Sara, Drews, Stefan, Savin, Ivan, van den Bergh, Jeroen
• Format: Article
• Language: English
• Subjects: 704/844/1759; 704/844/2175; Acceptability; Carbon; Environmental tax; Households; Humanities and Social Sciences; multidisciplinary; Perceptions; Revenue; Science; Science (multidisciplinary); Taxation
• ISSN: 2041-1723; 2041-1723
• DOI: 10.1038/s41467-021-27380-8

Public acceptability of carbon taxation depends on its revenue use. Which single or mixed revenue use is most appropriate, and which perceptions of policy effectiveness and fairness explain this, remains unclear. It is, moreover, uncertain how people’s prior knowledge about carbon taxation affects policy acceptability. Here we conduct a survey experiment to test how distinct revenue uses, prior knowledge, and information provision about the functioning of carbon taxation affect policy perceptions and acceptability. We show that spending revenues on climate projects maximises acceptability as well as perceived fairness and effectiveness. A mix of different revenue uses is also popular, notably compensating low-income households and funding climate projects. In addition, we find that providing information about carbon taxation increases acceptability for unspecified revenue use and for people with more prior tax knowledge. Furthermore, policy acceptability is more strongly related to perceived fairness than to perceived effectiveness. Public acceptability of carbon taxation is vital for its implementation. Here, the authors show that spending all revenues on climate projects, rather than mixing them, is the most acceptable policy, while information provision only increases acceptability for a carbon tax with unspecified revenues.