ATLANTA—There is a consistently high level of public support across nations for a global carbon tax if the tax policy is carefully designed, according to a survey of people in the United States, India, the United Kingdom, South Africa and Australia.
The research was published in Nature.
“Imposing a cost on carbon is the most economically efficient way to reduce greenhouse gas emissions,” said economist and lead author Stefano Carattini, an assistant professor in Georgia State University’s Andrew Young School of Policy Studies. “Our research shows that a system of harmonized carbon taxes, in which countries agree on the tax rate but maintain control over tax revenues, would be the easiest way to achieve a global carbon price.”
In the survey, 5,000 respondents from the five countries were asked their opinions on different carbon tax designs and whether they would support a carbon tax to be implemented in their country in 2020, if this was also done in all other countries.
The majority of the respondents—from 60 percent in the United States to above 80 percent in India—supported carbon taxes in scenarios where revenues are given back to people or spent on climate projects.
“The high level of public support suggests a major rethinking of how we approach carbon taxes and international cooperation,” said co-author Steffen Kallbekken, research director at the CICERO Center for International Climate Research in Oslo, Norway.
Carattini, Kallbekken and co-author Anton Orlov, a senior researcher at CICERO, simulated the effects of the carbon tax in an economic model to capture the economic and environmental effects of a global carbon tax, simulating different levels of tax rates and uses of revenues. They found a worldwide carbon tax would not disrupt the global economy.
“Our economic simulations show the economic impact would be modest in countries with a clean energy supply, but greater in countries that rely on fossil fuels, especially coal,” said Carattini. “We found this impact true even without taking into account the large benefits from avoided climate damages.”
The most feasible option would be a global system of harmonized carbon taxes because countries do not have to agree on the use of the revenues and can choose the option that is most appropriate domestically, the study found.
“Understanding peoples’ tax preferences is essential for designing policies to set a global carbon price. Knowing this, researchers should continue to evaluate the best use of revenues and ways to distribute them,” said Kallbekken.
NOTE: A group of 45 renowned economists from around the globe, including Nobel Prize recipients Michael Spence and Richard Thaler, four former Federal Reserve chairs, two former Treasury secretaries and former chairs of the president’s Council of Economic Advisors, have written a policy letter favoring a carbon tax, “Economists’ Statement on Carbon Dividends: Bipartisan agreement on how to combat climate change,” that published in the Wall Street Journal on the same date as the Nature article.
To cite the study: “How to win public support for a global carbon tax” by Stefano Carattini, Steffen Kallbekken and Anton Orlov in Nature 565, 289-291. For further comments, contact Stefano Carattini at Georgia State University, 203-999-9553, [email protected].
Department of Economics
Stefano Carattini is an Assistant Professor in Economics in the Andrew Young School of Policy Studies at Georgia State University. He is also affiliated with the London School of Economics and Political Science. He studies energy and environmental policy, behavioral economics, public economics, and political economy. His research combines policy evaluation, to examine how policies work, with empirical analyses of their political economy.