Carbon Pricing Policy and Public Acceptance

Carbon pricing, in the form of carbon taxes or emissions trading schemes, has emerged as a central instrument to internalise the external costs of greenhouse gas emissions and drive decarbonisation across sectors. By assigning a market value to carbon, these policies aim to incentivise firms and households to reduce fossil-fuel use, foster low-carbon innovation and generate revenue that can be recycled into green investments or social transfers. Public acceptance is critical to the political viability and durability of carbon pricing, as citizens weigh perceived fairness, effectiveness and distributional impacts. Comparative evidence reveals that transparent revenue use, compensatory measures for vulnerable groups and clear communication of environmental benefits can bolster support. Cross-country studies highlight the interplay between national context, policy design and public values, underscoring that acceptability hinges on both economic and psychological factors. As global efforts intensify to meet net-zero goals, understanding and addressing the determinants of public acceptance will be essential to scaling carbon pricing schemes and realising deep decarbonisation.

Research from Nature Portfolio

Recent systematic synthesis of ex-post evaluations employs machine-learning-assisted meta-analysis to quantify the emission reduction impacts of more than seventy carbon pricing schemes worldwide. The findings demonstrate that, despite generally modest price levels, introduced carbon prices have yielded immediate and substantial emission cuts—ranging between 4 % and 15 % after bias correction in many cases—while identifying critical evidence gaps concerning unevaluated jurisdictions and the price elasticity of emissions. Parallel meta-analytic research into public opinion examines fifteen determinants of support for climate taxes and laws across over 100 000 participants in more than thirty countries. This work finds that perceived fairness and effectiveness are the strongest predictors of acceptance, whereas demographic factors and self-enhancement values exert minimal influence. Together, these studies illuminate both the real-world performance of carbon pricing and the psychological drivers of public acceptance.

Carbon Pricing Policy and Public Acceptance publication trend

The graph below shows the total number of articles in carbon pricing policy and public acceptance across all publications each year (not limited to Nature Index journals).

Technical terms

Carbon pricing: A policy mechanism that assigns a cost to carbon emissions through taxes or emissions trading, encouraging emission reductions.

Emissions trading scheme (ETS): A cap-and-trade system that limits total emissions and allows trading of emission permits among regulated entities.

Earmarking: The allocation of tax or permit-auction revenues to specific public spending purposes, such as renewable energy or social programmes.

Meta-analysis: A statistical method for synthesising results from multiple independent studies to identify overall trends and effect sizes.

References

1. Systematic review and meta-analysis of ex-post evaluations on the effectiveness of carbon pricing. Nature Communications (2024).
2. Meta-analyses of fifteen determinants of public opinion about climate change taxes and laws. Nature Climate Change (2022).
3. Overcoming public resistance to carbon taxes. Wiley Interdisciplinary Reviews Climate Change (2018).
4. The impact of compensatory measures on public support for carbon taxation: an experimental study in Sweden. Climate Policy (2018).
5. In search of politically feasible policy-packages for sustainable passenger transport: insights from choice experiments in China, Germany, and the USA. Environmental Research Letters (2019).