A Cross-National Study on Carbon Tax Resistance: Mitigating the Impact of Job Risk Beliefs through Policy Packaging with Worker Compensation

• In Event: Economic and Political Dynamics in Shaping Trade, Energy, and Climate Policies: A Global Perspective

Abstract

Carbon taxation is a cost-effective climate policy, yet it remains broadly unpopular, particularly due to concerns about potential job losses. The claim that carbon taxes destroy jobs—leveraged by the opposition—lacks strong empirical support. Nevertheless, this narrative persists, resonating both with workers who genuinely fear job displacement and with individuals who adopt it as a seemingly rational justification for ideological opposition. This study investigates how job risk beliefs and ideological motivations drive resistance to carbon taxation in four countries with varying degrees of fossil fuel dependence and social welfare spending: Germany, Sweden, Switzerland, and the United States. Using an information provision experiment embedded in online surveys, we inform individual workers on the objective, policy-induced transition risks they face, and assess their tendency to overestimate and update their job risk beliefs based on ideological predispositions. This approach allows us to identify the causal effects of job risk perception gaps on public resistance to carbon taxation. In doing so, we provide insights how misleading narratives shape public opinion in climate policy. We further investigate cross-national differences in the extent to which climate policy risk exposure influences public opinion. Finally, using a conjoint experiment, we assess whether specific policy designs mitigate public resistance to climate taxation, focusing on policy packages that include targeted worker compensation schemes such as retraining programs, income tax relief, early retirement options, and commuting cost subsidies. We also examine public preferences for financing these labor market programs through carbon tax revenues compared to alternative earmarking types, such as climate protection.

Authors

• Manuel Ebner, University of Basel

• Simon Andres Montfort, University of Bern

• Aya Kachi, University of Basel / KAPSARC School of Public Policy