Umeå Economic Studies, Department of Economics, Umeå University
No 802:
Tax or no tax? Preferences for climate policy attributes
Runar Brännlund ()
and Lars Persson ()
Abstract: Today, many countries around the world respond to the
global warming and its consequences with various policy instruments such as
e.g. taxes, subsidies, emission permit trading, regulations and information
campaigns. In the economic literature, policy instruments have typically
been analyzed with respect to efficiency, while little effort has been put
on public preferences for these instruments. In this paper, an
Internet-based choice experiment is conducted where respondents are asked
to choose between two alternative policy instruments that both reduce the
emissions of CO2 by the same amount. The policy instruments are
characterized by a number of attributes; a technology-effect, an
awareness-effect, cost distribution, geographic distribution and private
cost (presented in more detail in the paper). By varying the levels of each
of the attributes, respondents indirectly reveal their preferences for
these attributes. Half of the respondents are faced with instruments
labeled by ‘tax’ and ‘other’, whereas the other half are faced with
unlabeled instruments. As for the label, the results show that people
dislike the ‘tax’. The results also show that people prefer instruments
with a positive effect on environmentally-friendly technology and climate
awareness. A progressive-like cost distribution is preferred to a
regressive cost distribution, and the private cost is negatively related to
the choice. Finally, the results indicate that Swedes want the reduction to
take place in Europe but not necessarily in Sweden.
Keywords: preferences; climate policy measures; choice experiment; web-survey; (follow links to similar papers)
JEL-Codes: H20; H31; Q48; Q50; (follow links to similar papers)
22 pages, April 6, 2010
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