Editing IPCC:AR6/WGIII/Chapter-5 (section)

=== Box 5.11 | Carbon Pricing and Fairness ===

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Whether the public supports specific policy instruments for reducing greenhouse gas emissions is determined by cultural and political world views ( [[#Cherry--2017|Cherry et al. 2017]] ; [[#Kotchen--2017|Kotchen et al. 2017]] ; [[#Alberini--2018|Alberini et al. 2018]] ) and national positions in international climate negotiations, with major implications for policy design. For example, policy proposals need to circumvent ‘solution aversion’: that is, individuals are more doubtful about the urgency of climate change mitigation if the proposed policy contradicts their political worldviews ( [[#Campbell--2014|Campbell and Kay 2014]] ). While there are reasons to believe that carbon pricing is the most efficient way to reduce emissions, a recent literature – focusing on populations in Western Europe and North America and carbon taxes – documents that efficiency features alone is not what makes citizens like or dislike carbon pricing schemes ( [[#Kallbekken--2011|Kallbekken et al. 2011]] ; [[#Carattini--2017|Carattini et al. 2017]] ; [[#Klenert--2018|Klenert et al. 2018]] ).

Citizens tend to ignore or doubt the idea that pricing carbon emissions reduces GHG emissions ( [[#Kallbekken--2011|Kallbekken et al. 2011]] ; [[#Douenne--2019|Douenne and Fabre 2019]] ; [[#Maestre-Andrés--2019|Maestre-Andrés et al. 2019]] ). Further, citizens have fairness concerns about carbon pricing ( [[#Büchs--2013|Büchs and Schnepf 2013]] ; [[#Douenne--2019|Douenne and Fabre 2019]] ; [[#Maestre-Andrés--2019|Maestre-Andrés et al. 2019]] ), even if higher carbon prices can be made progressive by suitable use of revenues ( [[#Rausch--2011|Rausch et al. 2011]] ; [[#Williams--2015|Williams et al. 2015]] ; [[#Klenert--2016|Klenert and Mattauch 2016]] ). There are also non-economic properties of policy instruments that matter for public support: Calling a carbon price a ‘CO 2 levy’ alleviates solution aversion ( [[#Kallbekken--2011|Kallbekken et al. 2011]] ; [[#Carattini--2017|Carattini et al. 2017]] ). It may be that the word ‘tax’ evokes a feeling of distrust in government and fears of high costs, low benefits and distributional effects ( [[#Strand--2020|Strand 2020]] ). Trust in politicians is negatively correlated with higher carbon prices ( [[#Hammar--2006|Hammar and Jagers 2006]] ; [[#Rafaty--2018|Rafaty 2018]] ) and political campaigns for a carbon tax can lower public support for them ( [[#Anderson--2019|Anderson et al. 2019]] ). Few developing countries have adopted carbon taxes, probably due to high costs, relatively low benefits, and distributional effects ( [[#Strand--2020|Strand 2020]] ).

To address these realities regarding support for carbon pricing, some studies have examined whether specific uses of the revenue can increase public support for higher carbon prices ( [[#Carattini--2017|Carattini et al. 2017]] ; [[#Beiser-McGrath--2019|Beiser-McGrath and Bernauer 2019]] ). Doubt about the environmental effectiveness of carbon pricing may be alleviated if revenue from carbon pricing is earmarked for specific uses ( [[#Kallbekken--2011|Kallbekken et al. 2011]] ; [[#Carattini--2017|Carattini et al. 2017]] ) and higher carbon prices may then be supported ( [[#Beiser-McGrath--2019|Beiser-McGrath and Bernauer 2019]] ). This is especially the case for using the proceeds on ‘green investment’ in infrastructure or energy efficiency programmes ( [[#Kotchen--2017|Kotchen et al. 2017]] ). Further, returning the revenues to individuals in a salient manner may increase public support and alleviate fairness proposals, given sufficient information ( [[#Carattini--2017|Carattini et al. 2017]] ; [[#Klenert--2018|Klenert et al. 2018]] ). Perceived fairness is one of the strongest predictors of policy support ( [[#Jagers--2010|Jagers et al. 2010]] ; [[#Whittle--2019|Whittle et al. 2019]] ).

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