Study finds limited evidence that carbon tax rebates have increased public support for carbon pricing
In a study published in Nature Climate Change, an international research team reports finding limited evidence that individual or household rebates have increased public support for carbon taxes in Canada and Switzerland.
The researchers from UC Santa Barbara, Université de Montréal, University of British Columbia and University of Bern used survey data from Canada and Switzerland—the only countries with climate rebate programs—to show low public awareness and substantial underestimation of climate rebate amounts in both countries.
Information was obtained using a five-wave panel survey that tracked public attitudes before, during and after implementation of Canada’s 2019 carbon tax and dividend policy and a large-scale survey of Swiss residents.
Experimental provision of individualized information about true rebate amounts had modest impacts on public support in Switzerland but potentially deleterious effects on support in Canada, especially among Conservative voters. In both countries, we find that perceptions of climate rebates are structured less by informed assessments of economic interest than by partisan identities. These results suggest limited effects of existing rebate programmes, to date, in reshaping the politics of carbon taxation.—Mildenberger et al.
Based on the results, the researchers suggested messages for policymakers:
Rebates do not offer a panacea to public opposition to carbon taxation. Taxpayers often remain unaware of the rebate’s existence or underestimate the rebate’s value.
Public support for carbon pricing remains structured by partisanship and ideology, even when individuals or households receive material benefits.
In the presence of partisan and interest group conflict over carbon taxes, when the costs of carbon taxation are salient, policymakers should not assume that voters’ support for carbon pricing will automatically increase with rebate inclusion.
Efforts to increase the political efficacy of dividends must focus on ensuring that citizens understand this policy instrument and must test whether increasing dividend visibility can increase support.
Background. Carbon taxation is proposed as a cost-effective climate policy that will deliver emissions reductions and spur investment in technological innovation.
However, because of voter antipathy to the visible costs of a carbon tax, which they can perceive as costly, ineffective and unfair, governments have been reluctant to introduce carbon taxes, proposals have been rejected by citizens in referenda and, even when adopted, carbon taxes have sometimes been reversed.
In response, some academics and environmental organizations have called for a tax-and-rebate policy, in which carbon tax revenue is recycled back to individuals or households as a rebate or dividend. The assumption is that carbon pricing with revenue recycling maintains the theoretical benefits of carbon pricing but may also strengthen public support for a cost-effective climate policy.
Mildenberger, M., Lachapelle, E., Harrison, K. et al. (2022) “Limited impacts of carbon tax rebate programmes on public support for carbon pricing.” Nat. Clim. Chang. 12, 141–147 doi: 10.1038/s41558-021-01268-3