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Behavioural Economics and Public Support for Carbon Pricing: A Revenue Recycling Scheme to Address the Political Economy of Carbon Taxation

Published online by Cambridge University Press:  27 August 2019

At the time when this article was written, Goran Dominioni was working as Consultant at the Macroeconomics, Trade and Investment Global Practice, World Bank. The article carries the name of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this article are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organisations, or those of the Executive Directors of the World Bank or the governments they represent.
Dirk Heine is an Economist at the Macroeconomics, Trade and Investment Global Practice, World Bank Group, and an Associate Fellow at the Hoover Chair for Economic and Social Ethics, Université catholique de Louvain.
Corresponding author:


Even though carbon pricing is widely accepted as the most efficient policy instrument for climate change mitigation, it has been severely held back by a lack of public support. Building on research in behavioural sciences, we propose a revenue recycling scheme that aims to foster public support for carbon taxes. The scheme has two main strengths: (i) it may allow the implementatin of carbon taxes with higher tax rates than those currently prevailing in most jurisdictions; (ii) it relies on a number of accessible technologies, and thus it can be implemented in a wide variety of settings, both in urban and rural areas of developing and developed countries.

© Cambridge University Press 2019 

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