Knowledge for better food systems

Nudging out support for a carbon tax

Image: Pxhere, USA America money, CC0 Public domain

According to this paper, survey participants were less likely to support implementing carbon taxes if they were also given the option of implementing a “green nudge” policy (making renewable energy plans the default option for residential consumers, but not compulsory).

In the first survey, 70% of participants support a carbon tax when it is the only option. When a green nudge is available, however, only 55% of participants support implementing either the tax alone or the tax plus the nudge.

In a replication survey, 72% supported the tax when it was the only option, compared to 63% when a green nudge was available. When the tax was framed as being “painful”, i.e. that it would increase the cost of transport and heating, 46% support the tax when it is the only option, versus 38% when a green nudge is available (a difference that is not statistically significant).

In other words, considering the option of the green nudge can “crowd out” support for the more effective (according to the paper) carbon tax.

Another survey tested whether the “crowding out” of support for the carbon tax was due to aversion to implementing more than one policy. In this survey, the related “green nudge” did crowd out support for the (painfully framed) carbon tax (support for the carbon tax was 45% and 26%, respectively, in the presence or absence of the green nudge), but an unrelated nudge policy (related to retirement savings) saw no significant change in support for the carbon tax (support was 44% in both cases).

The paper also finds a similar crowding out effect when support for two different retirement policies is tested, suggesting that the effect may apply to different domains, not just climate change.

The study finds that providing information on the relatively small impact of the nudge policy, or framing the tax as less costly (by pointing out that tax revenue can offset other costs), both reduce the crowding out effect.

 

Abstract

A carbon tax is widely accepted as the most effective policy for curbing carbon emissions but is controversial because it imposes costs on consumers. An alternative, ‘nudge,’ approach promises smaller benefits but with much lower costs. However, nudges aimed at reducing carbon emissions could have a pernicious indirect effect if they offer the promise of a ‘quick fix’ and thereby undermine support for policies of greater impact. Across six experiments, including one conducted with individuals involved in policymaking, we show that introducing a green energy default nudge diminishes support for a carbon tax. We propose that nudges decrease support for substantive policies by providing false hope that problems can be tackled without imposing considerable costs. Consistent with this account, we show that by minimizing the perceived economic cost of the tax and disclosing the small impact of the nudge, eliminates crowding-out without diminishing support for the nudge.

 

Reference

Hagmann, D., Ho, E. H. and Loewenstein, G. (2019). Nudging out support for a carbon tax. Nature Climate Change​.

Read the full paper here (PDF link). See also the Foodsource resource How far could socio-economic change reduce GHG emissions? and the FCRN report Policies and actions to shift eating patterns: What works?

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North America is the northern subcontinent of the Americas covering about 16.5% of the Earth's land area. This large continent has a range of climates spanning Greenland’s permanent ice sheet and the dry deserts of Arizona. Both Canada and the USA are major food producers and some of the largest food exporters in the world. Industrial farms are the norm in North America, with high yields relative to other regions and only 2% of the population involved in agriculture.

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