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|Title:||The social multiplier of environmental policy: Application to carbon taxation|
van den Bergh, J. C. J. M.
|Publisher:||Academic Press Inc.|
|Citation:||Konc T. The social multiplier of environmental policy: Application to carbon taxation / T. Konc, I. Savin, J. C. J. M. van den Bergh. — DOI 10.1016/j.jeem.2020.102396 // Journal of Environmental Economics and Management. — 2021. — Vol. 105. — 102396.|
|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. © 2020 Elsevier Inc.|
ECONOMIC AND SOCIAL EFFECTS
|metadata.dc.description.sponsorship:||This work was supported by an ERC Advanced Grant under the European Union's Horizon 2020 research and innovation program [grant agreement Nr. 741087 ]. I.S. acknowledges support from the Russian Science Foundation [RSF grant number 19-18-00262 ]. We have greatly benefited from comments by Stefano Carattini, Diego d’Andria, Rick van der Ploeg and Cees Withagen on an earlier version of the manuscript. We thank the three anonymous reviewers and the editor whose suggestions helped improve and clarify this manuscript. We also thank the participants of the INET Oxford Visitor Seminar and a seminar at the Mercator Research Institute on Global Commons and Climate Change. The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.|
|RSCF project card:||19-18-00262|
|CORDIS project card:||741087|
|Appears in Collections:||Научные публикации, проиндексированные в SCOPUS и WoS CC|
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