Researchers by economists find a global tax on carbon may be feasible

22 Jan 2019


There is a consistently high level of public support across nations for a global carbon tax if the tax policy is carefully designed, according to a survey of people in the United States, India, the United Kingdom, South Africa and Australia.

The research was published in Nature.
"Imposing a cost on carbon is the most economically efficient way to reduce greenhouse gas emissions," says economist and lead author Stefano Carattini, an assistant professor in Georgia State University's Andrew Young School of Policy Studies. "Our research shows that a system of harmonized carbon taxes, in which countries agree on the tax rate but maintain control over tax revenues, would be the easiest way to achieve a global carbon price."
In the survey, 5,000 respondents from the five countries were asked their opinions on different carbon tax designs and whether they would support a carbon tax to be implemented in their country in 2020, if this was also done in all other countries.
The majority of the respondents — from 60 per cent in the United States to above 80 per cent in India — supported carbon taxes in scenarios where revenues are given back to people or spent on climate projects.
"The high level of public support suggests a major rethinking of how we approach carbon taxes and international cooperation," says co-author Steffen Kallbekken, research director at the CICERO Center for International Climate Research in Oslo, Norway.
Carattini, Kallbekken and co-author Anton Orlov, a senior researcher at CICERO, simulated the effects of the carbon tax in an economic model to capture the economic and environmental effects of a global carbon tax, simulating different levels of tax rates and uses of revenues. They found a worldwide carbon tax would not disrupt the global economy.
"Our economic simulations show the economic impact would be modest in countries with a clean energy supply, but greater in countries that rely on fossil fuels, especially coal," said Carattini. "We found this impact true even without taking into account the large benefits from avoided climate damages."
The most feasible option would be a global system of harmonised carbon taxes because countries do not have to agree on the use of the revenues and can choose the option that is most appropriate domestically, the study found.
"Understanding peoples' tax preferences is essential for designing policies to set a global carbon price. Knowing this, researchers should continue to evaluate the best use of revenues and ways to distribute them," said Kallbekken.

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