Year: 2024
Type: article
Abstract: Carbon taxation is a market-based, incentive-driven policy tool, and it is often recommended in mainstream environmental economics. However, it is, by design or in effect consumption taxation, meant to make high-emission products and services more expensive. When affecting consumer prices, the unintended consequence is that they affect those who earn the least the hardest. As a result, low-income groups are generally less supportive of carbon taxes. However, carbon tax reforms need not be regressive. Policy designs can include mechanisms of social compensation. In this article, we show that the popularity of carbon taxes can be improved if citizens are presented with a progressive carbon tax reform. This effect is mainly driven by higher support among low-income groups. This is tested using a split-sample experiment collected in Denmark and employing regressions to explore the differences.
Source: The Social Science Journal
Authors: Troels Fage Hedegaard, Kristian Kongshøj
Institution: Aalborg University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Funder: Aalborg Universitet
OpenAlex ID: W4404173819