Public support for carbon tax in South Korea: The role of tax design and revenue recycling

Abstract

Carbon tax is widely regarded as an effective and efficient method to reduce carbon emissions. However, the introduction of carbon tax has faced resistance from the public and interest groups. In this article, we examine the determinants of public support for carbon taxation in South Korea. While the expected cost of the carbon tax on individual citizens appears to be the most important determinant of preferences towards carbon tax, we also find that the public support changes depending on the design of the revenue recycling system. The public is more likely to support a carbon tax scheme that is earmarked to support the energy-poor population compared to one that uses tax revenues for general government expenditures. The use of carbon tax revenues to create green sector jobs appears to significantly increase the support for carbon tax compared to the use of revenue for the general environment budget. Our findings suggest that while opposition towards carbon tax exists, certain design features such as universal carbon dividends can alleviate some resistance from the public.