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

Alice Pizzo, Christina Gravert, Jan M. Bauer and Lucia Reisch
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Alice Pizzo: Copenhagen Business School
Jan M. Bauer: Copenhagen Business School
Lucia Reisch: University of Cambridge, Judge Business School

No 24-16, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)

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 shows 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; Experiment; Moral licensing. (search for similar items in EconPapers)
JEL-codes: C90 D03 D90 Q50 Q51 Q58 (search for similar items in EconPapers)
Pages: 35
Date: 2024-11-13
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env, nep-exp, nep-pub and nep-res
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