A Tax Coming from the IPCC Carbon Prices Cannot Change Consumption: Evidence from an Experiment

Maïmouna Yokessa and Stéphan Marette ()
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Maïmouna Yokessa: UMR Économie Publique, Agroparistech, Université Paris-Saclay, 16 rue Claude Bernard, 75005 Paris, France

Sustainability, 2019, vol. 11, issue 18, 1-20

Abstract: This article compares a socially-optimal tax coming from a model integrating consumers’ preferences for various milks, with a tax directly computed from carbon emissions of milks with carbon prices given by the International Panel for Climate Change (IPCC). Regarding consumers’ preferences, we conducted an experiment in France for finding consumers’ willingness-to-pay (WTP) for different bottles coming from either cow’s milk or soy milk, under a regular or an organic process of production. This experiment shows higher WTPs for organic bottles than for regular bottles, and higher WTPs for soy milk than for cow’s milk. These WTPs were introduced into a model estimating the effects of regulatory instruments. From this model using WTPs, it was shown that, for milk coming from cows and soy, a tax on regular bottles and a subsidy on organic bottles maximized the consumers’ welfare. This tax on regular bottles was stronger than the tax that was alternatively estimated with the emissions and IPCC carbon prices. Indeed, a tax based on the IPCC carbon prices seemed too weak for efficiently changing the consumption towards sustainable products.

Keywords: consumers; lab experiment; organic premium; environmental premium; milk demand; green tax (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: A Tax Coming from the IPCC Carbon Prices Cannot Change Consumption: Evidence from an Experiment (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:18:p:4834-:d:264115

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