Fairness and the support of redistributive environmental policies

Mark Andor, Andreas Lange and Stephan Sommer

No 944, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Exemptions from costly policy measures are frequently applied to alleviate financial burdens to specific market participants. Using a stated-choice experiment with around 6,000 German household heads, we test how exemptions for low-income households and energy-intensive companies influence the political acceptability of additional cost for the promotion of renewable energies. We find that the support for the policy 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; exemptions renewable energy; political acceptance; behavioral economics; discrete choice experiment (search for similar items in EconPapers)
JEL-codes: D03 D12 H41 Q20 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-eur
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:944

DOI: 10.4419/96973105

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