Monday, November 05, 2007

Several billion join the Pigou Club

The BBC World Service reports that a majority of people in most countries favor higher energy taxes if the tax revenue is either rebated by lowering other taxes or used to finance energy-related government programs:

Reactions are mixed on whether people would favour the raising of taxes on energy sources that contribute to climate change. Overall, only 50 percent are in favour and 44 percent opposed. Urban Chinese have the largest majority (85%) who would support raising taxes on the fuels that contribute most to climate change....

The poll then tested the relative influence of two different design options for an energy tax by asking those who initially did not support a higher energy tax whether they would favour this tax under one of two different conditions: if the revenues were "devoted only to increasing energy efficiency and developing energy sources that do not produce climate change" and if at "the same time as your other taxes were reduced by the same amount, keeping your total taxes at the current level."

Combined with those who initially supported an energy tax, the percentage who change their position under each condition produces a large majority in every country ready to favour an energy tax.

Thanks to Christian Zimmermann for the pointer.