Public acceptance of carbon taxes in Australia

Carbon taxes can be a low-cost approach to reducing carbon dioxide emissions but are often constrained by public acceptability. Our study investigates public support for carbon taxes in Australia in two ways. First, we use a discrete choice experiment to quantify willingness to pay for carbon tax design features through higher electricity bills. Our results show higher utility for schemes that provide financial support to low-income households and that recycle revenues for low-carbon technologies. Survey respondents exhibit a preference against too much information and against revenues being recycled for policies to change individual behaviour. An appropriate manager of the carbon tax could be a federal government department. Second, we also examine whether there are differences in preferences for the terms ‘carbon tax’ and ‘carbon price’: in this context, the term ‘carbon tax’ does not majorly affect public acceptability. Our detailed carbon pricing scheme design and methodology can be tailored for studies of public acceptability of carbon taxes in other countries, potentially contributing to global emissions reductions.