Can social protection programs reduce opposition to carbon taxes? Evidence from a conjoint experiment in Sweden

Carbon taxation is widely embraced as an effective tool for reducing emissions, yet it is economically regressive, disproportionately affecting economically vulnerable groups. Hence, it is no surprise that carbon taxes often are perceived as unfair, and if implemented without consideration of distributive effects, they risk generating polarization and climate policy setbacks, as well as increasing existing inequalities. We provide the first causal analysis of how and to what extent existing social protection programs could be used to reduce opposition to carbon taxes. We employ a conjoint experiment targeting 5,188 respondents from Sweden to assess the causal effect of increased generosity in pensions, sickness insurance, unemployment insurance, and child benefits, benchmarked against the effect of monthly monetary handouts. Our findings suggest that increasing benefit generosity within each of the four examined social protection programs reduces opposition to carbon taxation. Most importantly, increased old age pension generosity have a substantial and significant impact across various demographic groups, regardless of the respondents’ political affiliation. This effect is more potent than other compensatory measures, a critical insight in the search for socially acceptable climate policy strategies that avoid increasing inequalities.