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Climate taxes garner support if attached to specific environmental goals

Telling people where the money will be going makes them more agreeable to the idea of increasing climate taxes, finds a study from Norway’s Center for International Climate and Environmental Research - Oslo.

Economists and politicians often avoid earmarking tax revenues because it limits their ability to prioritize discretionary spending in the longer term.

“But politicians should nonetheless consider earmarking revenues, for instance to make it easier to implement new climate measures,” said Steffen Kallbekken, who is Research Director at Cicero.

And when they do, they’ll find that while a majority of Norwegians initially feel that fuel taxes should be cut by 1 Norwegian krone ($0.18) per liter, for example, this can change of objectives behind the tax are laid out.

In a nationwide survey conducted by Cicero, it found that when consumers were told that the fuel tax would be targeted toward a specific environmental objective, most of them stated they would support raising Norwegian fuel taxes by 1 krone more.

Laboratory experiments were also conducted that showed that personal experience would make people more positive towards measures.

This was found to be the case with the introduction of Stockholm’s extra toll on rush-hour traffic with most people initially being hesitant to embrace the measure. But within a few months, after people experienced the benefits of less noise, pollution and accidents, a majority voted to make the toll permanent.

All in all, the study found a strong correlation between a measure’s lack of popularity and the degree by which it limits people’s choice. If people are given greater choice, it can lead to more support.

“The key to gaining public acceptance is ensuring that people feel they’ll get something in return. So if politicians want to muster support for climate and environmental measures, they need to use a balanced combination of carrot and stick. If people feel they are being railroaded into something, they will react negatively,” said Mr. Kallbekken.

The survey received funding from the Research Council of Norway. The project included a focus group study which showed that, compared with people in other countries, Norwegians in general are less skeptical of environmental taxes and have more confidence in authorities in this sphere.

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