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Cost perceptions and the support for carbon pricing

Author

Listed:
  • Jan Behringer

    (Macroeconomic Policy Institute (IMK))

  • Lukas Endres

    (Macroeconomic Policy Institute (IMK))

  • Maike Korsinnek

    (Macroeconomic Policy Institute (IMK))

Abstract

We examine how perceptions about the costs of carbon pricing affect policy acceptance. Using a representative sample of the German population, we conduct experiments that provide randomly selected respondents with personalized information about their costs at the current carbon price or a higher future price. Participants tend to overestimate their current costs and increase their carbon price acceptance when receiving cost information. In contrast, respondents underestimate future costs and reduce their support once they learn about actual costs. This underscores the importance of personalized information in fostering current support for carbon pricing, while cautioning against potential backlash as prices rise.

Suggested Citation

  • Jan Behringer & Lukas Endres & Maike Korsinnek, 2025. "Cost perceptions and the support for carbon pricing," IMK Working Paper 226-2025, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:wpaper:226-2025
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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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