Abstract:
Use of carbon tax revenues has been identified as affecting public acceptability. It remains unclear, though, which particular revenue use is most apt, and which perceptions of policy effectiveness and fairness can explain this. Here we report a survey experiment testing how distinct revenue uses affect tax perceptions and acceptability. This involves assessing the role of existing knowledge and information provision about carbon taxation in moderating the public preferences towards particular revenue uses. While previous research focused on single revenue uses, we also consider mixed ones. We find that spending revenues on climate projects, rather than compensating low-income households or mixed revenue uses, increases acceptability the most, while generally being perceived as fair and effective. However, when we asked respondents to allocate tax revenues, more than half of the sample preferred a mix. Providing information about the functioning of a carbon tax increases acceptability depending on its revenue use.
