At the fourth steering committee meeting, we first presented the results of the second survey aimed at examining public preferences for carbon pricing policies. The results from the combined computable general equilibrium and microsimulation models were also presented, studying the labour market impacts of different realistic climate tax shift options.
The second survey, which focused on a discrete choice experiment incorporating the estimated financial impact of various carbon pricing packages, provided further insight into public acceptability of these climate policy packages. The findings show that public preferences depend strongly on revenue recycling, and to a lesser extent on information-based interventions. The different revenue recycling options were ranked according to their acceptability to citizens. The heterogeneity among respondents was also highlighted through a hybrid latent class analysis, identifying five subgroups of respondents according to their policy preferences and climate attitudes.
On the modelling side, the soft and iterative link between the CGE model and the microsimulation was presented. The combined use of the two models made it possible to quantify the effects of five different recycling schemes on real household income. The results are broken down by quintiles of household disposable income, but also by employment status – providing insight into wage polarisation phenomenon, with a relative decrease of the medium-skilled position on the labor market. From the analyzed revenue recycling designs, only the expansion of the “work bonus” has the ability to overturn the wage polarisation result.
The aim of scoring climate tax shifts according to efficiency, equity and acceptability criteria was discussed and will constitute the final important stage of the E4BEL project.
The meeting was held at the Federal Planning Bureau.