Work

Carbon taxes crowd out low-carbon choices: Evidence from a consumer experiment

Year: 2026

Type: article

Study designs: Randomized Controlled Trial, Clinical Trial

Abstract: We examine the impact of a carbon tax on consumer choices via a large-scale online randomized controlled trial. Higher taxes generally reduce the demand for high-carbon goods. Compared to an import tax, a carbon tax reduces demand when the tax is zero (i.e., announced but not levied) but leads to relatively higher demand for high-carbon goods when a positive tax is introduced. This difference in demand responses, despite identical prices, is concentrated among climate-concerned consumers. Our findings suggest that carbon taxes can crowd out the effect of climate concerns on consumer choices, with important implications for policy.

Source: Journal of Economic Behavior & Organization

DOI: 10.1016/j.jebo.2026.107798

Authors: Alice Pizzo, Christina Gravert, Jan M. Bauer, Lucia A. Reisch

Institutions: Copenhagen Business School, University of Copenhagen, University of Cambridge

Language: English

Topic: Climate Change Policy and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: hybrid

Estimated APC paid: $3,180