Webinar – Yellow Vests, Carbon Tax Aversion, and Biased Beliefs

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”.

Speaker: Adrien Fabre, Paris School of Economics, Université Paris 1 Panthéon-Sorbonne. Presentation available here.
Moderator: Johannes Emmerling, RFF‐CMCC European Institute on Economics and the Environment (EIEE), Centro Euro‐Mediterraneo sui Cambiamenti Climatici, Italy