Ed Dolan's Econ Blog

Still Looking for a Free Lunch: Opinion Polls Bring Good News and Bad for Success of Paris Climate Talks

The latest polls of US public opinion bring both good news and bad for the success of the COP21 climate talks now underway in Paris.

On the positive side, a new New York Times/CBS News poll finds that two-thirds of Americans think their country should join an international treaty requiring it to reduce emissions in an effort to fight global warming. That includes a slim majority of Republicans. When pollsters pointed out that such a treaty is likely to involve tradeoffs between stimulating the economy and protecting the environment, respondents favored protecting the environment by 54 to 34 percent.

Those numbers suggest the kind of strong public backing that US negotiators would need to achieve a treaty with real teeth in it. To most economists, whether conservative, progressive, or libertarian, “real teeth” can only mean carbon taxes or some other mechanism to subject frontline decision makers in households, businesses, and governments to the grinding, day-to-day pressure of market prices. Are you going to drive your Prius instead of your SUV to the store today? Are you going to serve a smaller steak for dinner? Are you going to diversify your giant energy company away from fossil fuels before it goes the way of Kodak? Probably not, if failing to act costs you nothing.

There’s a lot of support for carbon taxes in Paris. Elon Musk, who makes Tesla electric cars, is all for a carbon tax. No surprise, you say? Then what about Exxon Mobil, which also backs a carbon tax? What about the IMF and the World Bank? What about a long list of political officials, from Angela Merkel to Jerry Brown?

But before you get the your hopes up, let’s take a closer look at those opinion polls. US public support for strong action on climate change may be broad, but there are indications that it is also shallow and fragile.

Consider this result from a different New York Times poll, conducted together with Stanford University earlier in the year. The NYT/Stanford poll asked respondents what they considered to be the most important problem facing the country today. The environment ranked eighteenth on the list, after jobs, the recession, terrorism, crime, inequality, the threat of socialism, the influence of lobbyists, health insurance, poverty, illegal immigrants, teacher pay, race relations, and the national debt. Just 2 percent of Americans think the environment is the country’s most pressing problem.

More worrisome still, the polls suggest that Americans are still looking for a free lunch. They want strong action on climate change, but only as long as it doesn’t threaten their pocket book, doesn’t take the SUV out of the driveway, and doesn’t require the hassle of replacing all those old Edison-era 100-watt incandescent bulbs that still reside, out of sight, out of mind, in their desk lamps and ceiling fixtures.

Whose job do people think it is to fix the climate? Some 57 percent of participants in the NYT/Stanford poll thought that government should be doing “a great deal” or “quite a bit.” They were even more enthusiastic about imposing the obligation on business. Fifty-four percent thought that US business was doing “only a little” or “nothing” about global warming. Seventy-one percent thought US business should do more.

In the abstract, poll participants were willing to place some of the load on “average people,” too. Only 4 percent thought average people were already doing a great deal or quite a bit to combat global warming. Two-thirds thought they should do more. But what, exactly?

The NYT/CBS poll asked people whether they would be willing to pay higher gasoline taxes, so that they would drive less or buy cars that used less fuel. Only 36 percent expressed even mild support for the idea. Even fewer supported the idea of a tax on electricity: 19 percent in favor vs. 79 percent opposed, including 60 percent strongly opposed. By comparison, 63 percent favored limiting carbon emissions from power plants, and a slim plurality of 49 percent favored limiting oil and gas exploration on public lands—as long as the question was phrased in a way that did not suggest that those actions might lead to higher retail energy prices.

It is true that some polls have shown majority support for a carbon tax, but only if the idea is framed very carefully. A National Survey on Energy and the Environment conducted by researchers from the University of Michigan and Muhlenberg College makes the point. Only 34 percent of those polled responded “Yes” to an abstractly phrased question of whether they supported “a policy to reduce greenhouse gases by taxing carbon-based fuels such as coal, oil, and natural gas at the federal level.” Support was only 15 percent among Republicans, and even Democrats were split right down the middle. When the pollsters added that the tax would increase monthly energy bills by 10 percent, support dropped to 29 percent overall and just 41 percent even among Democrats.

Attitudes toward a carbon tax shifted significantly, however, when the NSEE rephrased the question to emphasize a specific use of the tax revenues. A revenue-neutral tax that returned every dollar to the public in the form of a rebate check received 56 percent support. One that earmarked taxes to fund research and development for renewable energy fared even better, with 60 percent overall approval and 51 percent approval even among Republicans.

Interestingly, though, the NYT/Stanford poll suggests that the use of revenue may not be the key element that determines how people view a carbon tax. Instead, their perception of who pays the tax appears to be more important.

When the NYT/Stanford survey asked, “Do you think the federal government should or should not require companies to pay a tax to the government for every ton of greenhouse gases the companies put out?” the answers were 61 percent positive. Apparently, there was some magical thinking going on to suppress the possibility that companies would pass the tax along to their customers in the form of higher prices. Adding the qualifier, “All this tax money would be given to all Americans equally by reducing the amount of income taxes they pay” increased the positive share of responses by only 6 percentage points.

Clearly, there is a hierarchy of reactions here:

  • When pollsters ask whether consumers should pay a tax on electricity or gasoline for the express purpose of getting them to use less, their reaction is overwhelmingly negative.
  • When the NSEE asks neutrally about “taxing carbon-based fuels at the federal level,” without specifying who pays the tax, responses are not quite so negative, but they are still 2 to 1 against.
  • When the NYT/Stanford survey asks about “requiring companies to pay a tax,” the response swings to 61 percent in favor.
  • When respondents are promised that companies will pay and that the proceeds will be rebated to households, the response is more favorable still.

The bottom line seems to be that people care about climate change, but not very much. They would like to see the government do something about it, but only if it is done at someone else’s expense, preferably that of big corporations.

It seems likely that the shallowness and fragility of US public support for measures to counteract climate change will have an effect on the outcome of the Paris conference. It is already certain that any agreement reached will fall short of the economists’ gold standard, which would be a binding treaty imposing a global carbon tax. What we will get instead, if we get anything, is likely to be some promises of increased funding for research, some general emission targets to be met with an mix of regulations and subsidies to be chosen piecemeal by each national government, and perhaps some pledges from rich countries to aid clean energy projects in developing nations.

It is unlikely that the sum of these components will be enough to prevent breaching the two-degree threshold widely regarded as the benchmark for success of the conference. If COP21 agrees on anything that slows the approach to the 2 degree threshold by even a few years, that is all to the good, because it will give more time for adapting to a warmer planet. But the path forward still appears to entail a lot of adaptation and only a little mitigation.



2 Responses to “Still Looking for a Free Lunch: Opinion Polls Bring Good News and Bad for Success of Paris Climate Talks”

Bryan WillmanDecember 7th, 2015 at 3:13 pm

Other reasons to cast doubt on "climate change mitigation"
1. A carbon tax can certainly make money go in circles, but if the oil company pays it and then rebates it to me, what is the point? Worse, if I have no practical alternative, why will it have any effect? The *hope* is of course that low-carbon solutions to needs will win in the market due to lower tax burden – but that only applies if they actually exist and are applicable, AND if their total cost to the consumer isn't dominated by high-carbon activities (such as transportation.)
I am personally very skeptical that a carbon tax will do anything but grow government.
2. There are over time a steady stream of reports on the limits of powers of governments to fully tax things. Whether it's Chinese officials having to use dyanmite to close down some plants, to various machiniations w.r.t. the US tax code, there would be huge incentives to "game the tax" and large parts of the world where it couldn't be collected anyway. (You really think you're going to collect a carbon tax on wood burning camp stoves in Africa? On land clearing fires in South America and South East Asia?)
3. If my understanding of issues is correct (possible technical error) even if CO2 emissions fell to zero tomorrow, the "inertia" would cause amount of drama for some time. And in particular, it strikes me as likely that the low level islands in the Pacific will in fact be covered in water, regardless of what the rest of the world does.

You once called my view a "consoul of dispair" and I've been thinking on that, and have to agree to some extent.

It's going to get hot, we'd better focus on getting ready.

Ed Dolan EdDolanDecember 7th, 2015 at 6:18 pm

Thanks for your comments. Here are some point-by-point replies–

1. When people advocate that the tax be rebated, they mean a fixed per capita payment, not one proportional to use. At the margin, such a tax makes fuel more expensive. Economists would say they have a substitution effect (because of the price increase) but no income effect (because of the rebate). And no, we don't have to have substitutes "on the shelf" to implement such a tax. The whole point is that we don't *know* what the winning substitutes will be. That is why a tax is better than selective subsidies or credits that, by definition, can go to alternatives we already know about.

2. You are right that it would not be possible to tax all sources of climate change. I think we would have to be satisfied with a tax on internationally traded fossil fuels. That would be a little easier to implement.

3. My understanding of the scientific issues is the same as yours. There is a good deal of momentum in the system, especially in sea level rise. As far as I know, even if we went to net-zero tomorrow on carbon emissions, we would get substantial additional sea level increase. The advantage of doing something (even a little) is that the longer we spread out the cost of adaptation, the more technology can advance and the more successfully we can adapt.

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