RFF-CMCC-NAVIGATE Webinar: Yellow Vests, Carbon Tax Aversion and Biased Beliefs

Thursday 6 February 2020
h. 12.00 pm – 1.00 pm CET
Language: English
Presenter: Adrien Fabre, Paris School of Economics, Université Paris 1 Panthéon-Sorbonne
Moderator: Johannes Emmerling, RFF‐CMCC European Institute on Economics and the Environment (EIEE), Centro Euro‐Mediterraneo sui Cambiamenti Climatici, Italy

How do our beliefs take form? The work presented in this webinar explores the creation of beliefs and their influence on our attitude towards policies. The investigation analyses the case of carbon taxation in France in the context of the Yellow Vests movement that was born against it. Results obtained include that French citizens would largely reject a carbon tax whose revenues are redistributed uniformly to each adult. However, they also overestimate the negative impact of the scheme on their purchasing power, wrongly think it is regressive, and do not perceive it as environmentally effective. The econometric analysis carried out in this study shows that correcting these three biases would be enough to generate majority approval. However, people’s beliefs are persistent and their revisions are biased towards pessimism so that only a small minority can be convinced. If overly pessimistic beliefs cause tax rejection, they also result from it through motivated reasoning, which manifests what we define as “tax aversion”.

This is the first one of the NAVIGATE Webinar Series organized by the NAVIGATE project (and hosted by RFF-CMCC EIEE) to improve current generation of IAMs, providing insight into how long-term climate goals can translate into short-term policy action, and how countries and sectors can work in concert to implement the Paris Agreement.  NAVIGATE will organize webinars hosting scientists and outstanding experts who are happy to share their knowledge about some important topics for the project. NAVIGATE is a project funded by the European Union’s Horizon 2020 programme (Grant Agreement N. 821124) and carried out by a consortium of 15 European organisations and two others BRIC countries organizations (Brazil and China). It aims to develop the Next generation of AdVanced InteGrated Assessment modelling to support climaTE policy making. It will critically improve the capability of Integrated Assessment Models (IAMs) to inform the design and evaluation of climate policies by targeting major advancements in two areas: describing transformative change in the economy, in technology and in consumer goods and services, and describing distributional impacts of climate change and climate policy.