The social multiplier of environmental policy : application to carbon taxation
Konc, Théo (Universitat Autònoma de Barcelona. Institut de Ciència i Tecnologia Ambientals)
Savin, Ivan (Universitat Autònoma de Barcelona. Institut de Ciència i Tecnologia Ambientals)
van den Bergh, Jeroen C. J. M. (Universitat Autònoma de Barcelona. Institut de Ciència i Tecnologia Ambientals)
Date: |
2021 |
Abstract: |
We analyze the effectiveness of environmental policy when consumers are subject to social influence. To this end, we build a model of consumption decisions driven by socially- embedded preferences formed under the influence of peers in a social network. This setting gives rise to a social multiplier of environmental policy. In an application to climate change, we derive Pigouvian and target-achieving carbon taxes under socially-embedded preferences. Under realistic assumptions the social multiplier is equal to 1. 30, allowing to reduce the effective tax by 38%. We show that the multiplier depends on four factors: strength of social influence, initial taste distribution, network topology and income distribution. The approach provides a basis for rigorously analyzing a transition to low-carbon lifestyles and identifying complementary information and network policies to maximize the effectiveness of carbon taxation. |
Grants: |
European Commission 741087
|
Note: |
Unidad de excelencia María de Maeztu CEX2019-000940-M |
Rights: |
Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades. |
Language: |
Anglès |
Document: |
Article ; recerca ; Versió sotmesa a revisió |
Subject: |
Carbon pricing ;
Climate policy ;
Externality taxation ;
Endogenous preferences ;
Social network |
Published in: |
Journal of Environmental Economics and Management, Vol. 105 (Jan. 2021) , art. 102396, ISSN 0095-0696 |
DOI: 10.1016/j.jeem.2020.102396
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Record created 2020-12-22, last modified 2022-07-30