PhD defence: Jens Ewald "Opposition to Carbon Pricing: Beliefs, Revenues, and Protesters"

Image

Opponent
Professor Timo Goeschl, Department of Economics, Heidelberg University, Germany.

Grading committee
Emeritus Professor Katheline Schubert, Paris School of Economics, France.
Professor Mads Greaker, Handelshøyskolen, Oslo Metropolitan University, Norway.
Professor Fredrik Carlsson, Department of Economics, School of Business, Economics and Law, University of Gothenburg, Sweden.

Chair
Professor Thomas Sterner, Department of Economics, School of Business, Economics and Law, University of Gothenburg, Sweden.

Abstract

Shocking Electricity Prices and Carbon Tax Aversion

I study the causal impact of exposure to sharply increased electricity prices on attitudes toward carbon taxation, utilizing a geographic regression discontinuity design and a targeted survey of Swedish households near electricity bidding zone borders. I find that exposure to doubled electricity prices increases opposition to carbon taxation by 20 percentage points. Additionally, this exposure leads to shifts in respondents' policy beliefs, leading to increased overestimation of the tax’s costs and reinforcing the erroneous perception that a progressive carbon tax is regressive. To quantify the role of these belief changes in explaining the observed increase in opposition, I employ an instrumental variable approach, leveraging tailored information treatments within the survey as instruments. My analysis indicates that 27% and 56% of the observed increase in opposition can be attributed to pessimistic shifts in the beliefs about the tax's affordability and progressivity, respectively.

Using Revenue to Reduce Resistance to Carbon Pricing

We study how revenue use influences public attitudes for carbon pricing. Surveying over 20,000 citizens across Germany, France, Italy, Poland, and Romania, we find that while many remain undecided, direct support does not exceed 50 percent. Using a split-sample experimental design, we show that earmarking revenues for green investments or refunding them domestically increases support by about seven percentage points compared to allocating revenues to state budgets. Directing revenues to the poorest EU citizens does not increase support. Notably, revenue use is especially influential among respondents with low trust in their government; for these individuals, progressive refunds are the most effective approach to boosting policy support. We also find comparatively high support for taxing aviation fuels.

Understanding the Resistance to Carbon Taxes: Drivers and Barriers Among the General Public and Fuel-Tax Protesters

Carbon taxes are generally well accepted in countries with significant experience thereof but there is still public resistance to raising them. We study attitudes toward carbon taxation and other environmental policy instruments in Sweden. We survey a national sample of the population as well as members of a large political movement that protests fuel taxes. Our results show that the motivations in both groups are alike: educational level, rural versus urban domicile, political orientation, and especially trust in government correlate with opinions on carbon taxes; household income does not appear to matter. Lack of trust in government and lack of belief in the Pigouvian mechanism appear as especially important motivations for protesters’ opposition. We find support for revenue refunding, but greater support, in both groups, for earmarking for climate use.

The link to the dissertation will be published shortly.