Carbon Taxes Crowd Out Climate Concern: Experimental Evidence from Sustainable Consumer Choices

Alice Pizzo, Christina Gravert, Jan M. Bauer and Lucia Reisch

No 11719, CESifo Working Paper Series from CESifo

Abstract: We examine the impact of a carbon tax on consumer choices via a large-scale online randomized controlled trial. Higher taxes generally reduce the demand for high-carbon goods. Compared to an import tax, a carbon tax reduces demand when the tax is zero (i.e., announced but not levied) but leads to relatively higher demand for high-carbon goods when a positive tax is introduced. This contradiction of basic price theory is entirely driven by climate-concerned consumers. Our findings suggest that carbon taxes can crowd out climate concerns, leading to important implications for policy.

Keywords: behavioral response; carbon pricing; climate change; climate policy; experiment; moral licensing (search for similar items in EconPapers)
JEL-codes: C90 D03 D90 Q50 Q51 Q58 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11719

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