How to Prevent Yellow Vests? Evaluating Preferences for a Carbon Tax with a Discrete Choice Experiment.

27 April 2023

An ambitious climate policy can trigger tensions in societies with low trust and deep social divisions. We examine public preferences for policies to achieve energy security and climate change mitigation goals in the context of the energy crisis caused by Russia’s invasion of Ukraine. We conducted a discrete choice experiment, using a willingness-to-pay approach, on a representative sample of 10,000 people in Poland, a country heavily reliant on fossil fuels in transport and domestic heating. We found a strong aversion to a carbon tax among citizens, which is only slightly mitigated by redistribution policies. Income and age shape preferences for climate and energy policies. People with lower incomes (bottom quartile) place lower value on achieving climate change mitigation (15%) and energy security (10%) goals than the general population (17% and 14% willingness to pay, respectively). Younger individuals (aged 18-34) are willing to forego a greater share of their income to mitigate climate change than those aged 55 or older (28% vs. 12%) but a lower share (11% vs. 16%) to reduce fuel imports from Russia. Finally, we quantify the heterogeneity of preferences regarding redistribution measures and evaluate their efficiency. Households with low incomes prefer cash transfers as a redistribution measure, while people with high incomes prefer subsidies for green technology investments. Given the strong aversion of people with low incomes to a carbon tax, policymakers should prioritise efficient redistribution measures for them.

analysis of how to conduct climate policy fairly and avoid social protests when introducing carbon tax
keywords: carbon tax, redistribution, climate change, discrete choice experiment, willingness to pay
JEL codes: 
publication year: 2023
language: english
Publications category: 
publishing series: IBS Working Paper
publication number: 03/2023
ISSN: 2451-4373
Additional information:

We thank Katarzyna Lipowska, Karol Madoń, Joanna Mazurkiewicz and Mateusz Smoter for their insightful comments. The European Climate Foundation financially supported this paper. The usual disclaimers apply. All errors are ours.

Projects related to this publication:

Institute for Structural Research (IBS), University of Warsaw

Institute for Structural Research (IBS)

Institute for Structural Research (IBS), Institute of Philosophy and Sociology Polish Academy of Sciences

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