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CLIMATE POLICY

Limited evidence that carbon tax rebates have increased public support for carbon pricing

We find limited evidence that individual or household rebates (also called dividends) have increased public support for carbon taxes in Canada and Switzerland. In the presence of partisan and interest group conflict over climate policy, policymakers should not assume that voter support for carbon pricing will automatically increase with the inclusion of rebates.

Messages for policy

  • 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.

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Fig. 1: Support for carbon pricing among different Canadian groups in 2019–2020.

References

Further reading

  • Akerlof, G. et al. Economists statement on carbon dividends. The Wall Street Journal (17 January 2019); https://clcouncil.org/economists-statement/. Statement by over 3,600 economists, including 28 Nobel laureates, calling for a carbon tax, with the revenue returned via equal dividends.

  • Klenert, D. et al. Making carbon pricing work for citizens. Nat. Clim. Change 8, 669–677 (2018). The authors summarize the existing literature on carbon pricing and theorize that per capita tax rebates may ameliorate public opposition.

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  • Mildenberger, M. Carbon Captured: How Labor and Business Control Climate Politics (MIT Press, 2020). Mildenberger analyses the political challenges of carbon pricing in Australia, the United States and Norway.

  • Rabe, B. G. Can we Price Carbon? (MIT Press, 2018). Rabe examines the politics of carbon pricing in the United States.

  • Carattini, S., Kallbekken, S. & Orlov, A. How to win public support for a global carbon tax. Nature 565, 289–291 (2019). Carattini, Kallbekken and Orlov summarize evidence from public opinion surveys that rebates could potentially boost carbon pricing support.

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  • Harrison, K. The comparative politics of carbon taxation. Ann. Rev. Law Soc. Sci. 6, 507–529 (2010). Harrison surveys the politics of carbon pricing around the world.

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Acknowledgements

The authors acknowledge financial support from a Social Science and Humanities Research Council Partnership Grant; the Economic and Environmental Policy Research Network of Canada, the Centre for International Governance Innovation; the Institute for Social, Economic, and Behavioral research at the University of California, Santa Barbara; and the Hellman Fellows Fund.

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Correspondence to Matto Mildenberger.

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The authors declare no competing interests.

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Mildenberger, M., Lachapelle, E., Harrison, K. et al. Limited evidence that carbon tax rebates have increased public support for carbon pricing. Nat. Clim. Chang. 12, 121–122 (2022). https://doi.org/10.1038/s41558-021-01270-9

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