Carbon Tax

The biggest barrier to carbon tax implementation islack of public support (Deroubaix and Lévèque, 2006;Jakobsson,et al. 2000; Steg, et al. 2006). A small body of researchhas demonstrated that people's evaluations of carbontaxesare influenced by behavioural biases such as framing(Baranzini and Carattini, 2017; Hardisty, et al.2019).RQ1:In addition to the framing effect, what otherbehavioural biases influence people's evaluationsof carbon tax?Research question 1 will be addressed by conductingan online randomised controlled experiment. The dependentvariable will be a quantitative measure of people'swillingness to pay (WTP) carbon tax. Participantswill be randomlyallocated into one of several treatment conditionsor the control group. Participants will be presentedwith ahypothetical policy scenario which will assess theirWTP carbon tax; they will have the option to rejectthe tax orchoose a WTP amount from a predetermined list. Thosein the treatment group will receive a message priortoanswering this question and those in the control groupwill not. Participants in the treatment group willreceive one ofseveral messages designed to leverage a bias. An in-depthreview of the literature will determine which biasestopursue. Ordinary least squares regression will beemployed to estimate the average treatment effectand establishwhether there is a significant difference in WTP betweenthe groups.I will then test whether these messages yield differentresults depending on who receives the message. Ana-prioriliterature review shows that climate-change beliefsand political trust are correlated with support forenvironmentalpolicies (Fairbrother, et al. 2019). Income is correlatedwith WTP carbon tax (Kotchen, et al. 2017). Thesevariableswill be included as interaction terms in the regressionsand will discern which messages are most appropriateforpublic communication and reveal any unintentionalnegative consequences of the messages.RQ2:If the responsibility of paying carbon tax isshared between individuals and corporations willthis influencepeople's willingness to pay carbon tax?Equity theory suggests that if the costs of a behaviourare not fairly distributed throughout society thisreduces thelikelihood of an individual engaging in that behaviour(Fehr & Fischbacher, 2004). Hardisty, et al. (2019)demonstratethat people would prefer to tax fossil-fuel producersas opposed to individuals. However, it is not clearwhetherpeople's WTP would change if the responsibility ofpaying carbon tax were to be shared between bothgroups. Essay2 will seek to determine whether people's WTP carbontax is influenced by the knowledge that fossil-fuelproducersare also being taxed. An online randomised controlledexperiment will be utilised and will mimic a purchasingscenario. The experiment will test whether people'sWTP will decrease once they realise corporationsare beingtaxed or whether it will increase when they are madeto feel that the responsibility of paying carbontax is shared.RQ3:Will the efficacy of the aforementioned messagessurvive when tested in the field?The UK government recently introduced "Clean Air Zones"in areas which are deemed to be toxic from transportemissions. Drivers of the most polluting vehicleswill be charged up to £100 per day to enter thesezones. There isthe potential to design a field experiment in conjunctionwith this policy that is informed by essays 1 and2. Essays 1and 2 will shed light on the types of messages thatmost significantly impact people's WTP carbon tax.Essay 3 wouldseek to determine whether the efficacy of messagessurvives when tested in the field. The experimentwould involvemanipulating the type of message on the letter thataccompanies the fine. Ordinary least squares regressionwouldbe used to test whether these messages have an impacton time taken to pay the fine and the number of excursionsinto the clean air zone post fine.