Almost three quarters of German citizens would support a carbon pricing model that distributes equal up front payments to all citizens.
Researchers at LMU Munich looking at how support for carbon pricing can be increased found that 73% of respondents supported a ‘Climate Premium’ model involving equal dividends paid out immediately based on expected carbon revenues.
The next most popular model was the ‘Redistribute All’ model, where participants receive an equal share of actual revenue (without knowing exactly how much that will be when they make their decision).
“Carbon pricing is the sharpest blade in our economic toolkit against climate change,” said Professor Klaus M. Schmidt, Chair of Economic Theory at LMU and co-author of the study. “The climate premium makes it very transparent how much money goes straight back into the pockets of citizens from the revenues generated by carbon pricing.”
The least popular approach to recycling carbon pricing revenue – and the only model supported by fewer than half of respondents – was to put the money into the budget of the federal government.
Carbon pricing is widely considered to be an effective policy instrument for reducing emissions. For example, a recent study found that around one third of emissions reductions between 1991-2015 in Sweden could be attributed to carbon pricing.
