Carbon Tax acceptability: A comparative experimental analysis

Abstract

Greenhouse gases (GHG) emissions are rising worldwide. Despite the efforts made both at the national and at the international level, new policies are needed in order to effectively reduce the GHG emissions. Command-and-control policies have been frequently adopted, but proved not to suffice to reverse the phenomenon. A carbon tax could make the case, but it is seldom implemented due to its assumed political unpopularity. A contingent valuation experiment is performed in USA and in Italy to analyze this issue. The results show that the policy acceptability is very high and that the median WTP ranges between a minimum of $161 and a maximum of $246, and varies according to the tax revenue use, the respondents’ nationality, the respondents’ beliefs and knowledge about climate change, and some sociodemographic characteristics. Policy implications of the results obtained are further described in the paper.