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Morals and the Political Economy of Corrective Taxes

Author

Listed:
  • Felix Bierbrauer
  • Mattias Polborn
  • Marten Ritterrath
  • Georg Weizsäcker

Abstract

We study the political economy of carbon taxes when neoclassical consumers take all other agents' emissions as given and socially responsible consumers internalize damages in a group-rule-utilitarian way, taking neoclassical consumers' behavior as given. We characterize political equilibrium taxes with a focus on deviations from first-best Pigouvian taxation. Welfare falls further if arguments on moral obligations to reduce carbon footprints polarize the debate in society. Finally, we present survey evidence that supports our theory: social responsibility correlates with lower consumption of brown goods, higher preferred carbon taxes, and support for moral arguments.

Suggested Citation

  • Felix Bierbrauer & Mattias Polborn & Marten Ritterrath & Georg Weizsäcker, 2026. "Morals and the Political Economy of Corrective Taxes," CESifo Working Paper Series 12758, CESifo.
    • Handle: RePEc:ces:ceswps:_12758
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    References listed on IDEAS

    as
    1. Bierbrauer, Felix & Netzer, Nick, 2016. "Mechanism design and intentions," Journal of Economic Theory, Elsevier, vol. 163(C), pages 557-603.
    2. Capraro, Valerio & Rand, David G., 2018. "Do the Right Thing: Experimental evidence that preferences for moral behavior, rather than equity or efficiency per se, drive human prosociality," Judgment and Decision Making, Cambridge University Press, vol. 13(1), pages 99-111, January.
    3. Nicola Gennaioli & Guido Tabellini, 2025. "Reply to: Comments on “Presidential Address: Identity Politics”," Econometrica, Econometric Society, vol. 93(6), pages 1977-1980, November.
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    8. Felix Bierbrauer & Aleh Tsyvinski & Nicolas Werquin, 2022. "Taxes and Turnout: When the Decisive Voter Stays at Home," American Economic Review, American Economic Association, vol. 112(2), pages 689-719, February.
    9. Adrien Fabre & Thomas Douenne & Linus Mattauch, 2025. "Majority support for global redistributive and climate policies," Nature Human Behaviour, Nature, vol. 9(8), pages 1583-1594, August.
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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