The study, based on surveys of 1,500 voters, also suggests that people may be more likely to support carbon taxation if revenues are earmarked for environmental purposes, such as clean energy development, rather than being revenue neutral. Or they might back such taxes if they are clearly informed on how a carbon tax can achieve reductions in emissions even without earmarking. Lump sum transfers, also known as dividends, or other progressive structures may engender more support for carbon taxation, provided that their progressive properties are made salient.
Another key challenge to implementing a carbon tax is communicating effectively with the public, Carattini says. His team used a model of a Swiss economy to measure the effects of many carbon tax designs on greenhouse gas emissions, the economy as a whole, and low-income households — and then communicated those results to voters in their survey.
“What you need to realize, and what we made clear in the paper, is that regardless of the use of revenues, every carbon tax is going to decrease greenhouse gas emissions,” Carattini said. “If you don’t tell people how the carbon taxes work — and that they work — you may have some opposition.”
The Swiss study, he said, suggests a national carbon tax with a lump-sum transfer would be the most popular amongst voters. “It’s a new tax, but it doesn’t mean you’re getting poorer,” he said. “Under this progressive design, low-income households on average get slightly richer.”
Many companies, such as Microsoft, are already implementing their own carbon pricing schemes. Last year, Yale University initiated a carbon charge to test the effectiveness and feasibility of internal carbon pricing on Yale’s campus.
Carattini believes it’s only a matter of time before more countries begin to embrace carbon taxation over renewable energy subsidies, which can be very expensive. “There are tradeoffs, for sure, but in the future I think carbon taxes will be used more often,” he said. “For those countries — and states — that committed to the Paris agreement, a carbon price is the cheapest way to meet their pledges.”
Read the paper at https://link.springer.com/article/10.1007/s10640-017-0133-8