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Explaining the Willingness to Pay Higher Prices and Taxes to Combat Climate Change

Author

Listed:
  • Toker Doganoglu

    (University of Wuerzburg)

  • Lukasz Grzybowski

    (University of Warsaw, Faculty of Economic Sciences)

  • Joanna Rachubik

    (University of Warsaw, Faculty of Economic Sciences)

Abstract

In this paper, we analyze the determinants of individual’s willingness to pay higher prices and taxes and to reduce their standard of living to support environmental protection. Using data from the 2020 International Social Survey Programme (ISSP), Environment IV module from 26 countries on about 29,000 individuals, we investigate the influence of socio-demographic factors, consumer behavior, environmental beliefs, opinions, and attitudes. The findings reveal significant variations in willingness to bear financial burdens for environmental protection across different countries and socio-economic groups. Our analysis highlights the critical role of education, religion, political affiliation, and trust in institutions in shaping environmental attitudes and behaviors. Moreover, after controlling for individual characteristics, significant international disparities persist, with countries like India showing exceptionally high willingness across all measures, while many European countries, despite their progressive environmental policies, show lower willingness for higher taxes due to possibly already high tax burdens. These findings underscore the importance of tailoring policy communications to different socio-economic groups, emphasizing both the immediate and long-term benefits of environmental protection to enhance acceptance among various demographic segments.

Suggested Citation

  • Toker Doganoglu & Lukasz Grzybowski & Joanna Rachubik, 2024. "Explaining the Willingness to Pay Higher Prices and Taxes to Combat Climate Change," Working Papers 2024-24, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2024-24
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    References listed on IDEAS

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    1. Andrea Baranzini & Stefano Carattini, 2017. "Effectiveness, earmarking and labeling: testing the acceptability of carbon taxes with survey data," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(1), pages 197-227, January.
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