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Fairness and the support of redistributive environmental policies

Mark Andor, Andreas Lange and Stephan Sommer

Journal of Environmental Economics and Management, 2022, vol. 114, issue C

Abstract: Exemptions from costly policy measures are frequently applied to alleviate financial burdens on specific market participants. Using a stated-choice experiment with around 6000 German household heads, we test how exemptions for low-income households and energy-intensive companies influence the political feasibility of additional cost for the promotion of renewable energies. We find that the policy support is substantially higher when low-income households are exempt rather than the industry. Introducing exemptions for low-income households on top of existing exemptions for the industry increases the acceptability of the policy. We show that the support for exemptions as one example of distributional policy design is associated with individual behavioral measures like inequality aversion and fairness perceptions.

Keywords: Fairness; Distributional effects; Environmental policy; Political feasibility; Behavioral economics; Single-binary choice experiment (search for similar items in EconPapers)
JEL-codes: D03 D12 H41 Q20 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:114:y:2022:i:c:s0095069622000535

DOI: 10.1016/j.jeem.2022.102682

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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