From Opposition to Opportunity: Enhancing the Acceptance of Carbon Taxes Through Effective Policy Design

An increasing number of countries are considering implementing domestic carbon taxes to achieve the carbon-reduction targets set in the Paris Agreement. However, introducing such taxes presents significant challenges for policymakers worldwide. Despite their effectiveness, carbon taxes remain the least popular policy instrument. Furthermore, few studies focus on public support for carbon taxation in low- and middle-income countries, a crucial area of research given the global significance of their emissions. Therefore, we conducted a pre-registered full factorial survey experiment involving more than 13,000 evaluations of policy designs in China, Germany, India, and the UK to address the most prevalent barriers to the popularity of carbon taxes, as discussed in academic research, policy analysis, and public discourse: perceived effectiveness, average household costs, the types of revenue recycling schemes implemented, and the extent of international cooperation. Our findings revealed striking differences in how the countries responded to carbon tax policies. The key findings included the following: cost transparency unexpectedly reduced support, whereas communicating the effectiveness of the policy increased it; preferences for revenue recycling schemes varied significantly across the four countries, highlighting the need for tailored approaches; and, surprisingly, international cooperation increased support only in Germany, challenging assumptions about global climate policy. These findings have profound implications for policymakers, suggesting that an effective carbon tax design must be carefully calibrated in the national context. This study provides a roadmap for designing carbon tax policies that are environmentally effective and politically viable for diverse global economies.