Public acceptance and willingness to pay cost-effective taxes on red meat and city traffic in Norway

ABSTRACT

The Norwegian Green Tax Commission proposes inter alia cost-effective taxes on red meat and city traffic to reduce greenhouse gas emissions and local air pollution. Implementation requires public support, but the acceptance of and willingness to pay (WTP) such taxes are not known. We conducted a national survey of the public's acceptance of and WTP the two taxes. The survey instrument showed the reduction in emissions/pollution dynamically for each tax level chosen. Despite survey information about the purpose of the taxes, only 25%, on average, were in favour of their introduction, the rest did not know, had zero WTP, or opposed the taxes. In this respect, preferences for the two taxes are similar. However, on average people are WTP approximately 90% of the cost-effective tax level for red meat, but only about 25%–35% of the tax on city traffic, depending on fuel type. The most important concern in designing environmental policy was to avoid increased economic inequality. Earmarking the tax revenue for environmentally friendly technology increased acceptable tax level for red meat. Earmarking tax revenues for reduced income tax did not increase the acceptability of proposed taxes on neither red meat nor city traffic.”

KEYWORDS:

• Environmental taxes
• red meat
• city traffic
• acceptance
• willingness to pay

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 One relevant valuation study is Malone and Lusk (2018), though its main purpose is to investigate respondent inattention to meat tax attributes in a SP choice experiment, not estimating WTP and tax acceptance per se.

2 The Green Tax Commission did not state whether the tax should be on production or consumption of red meat. This study considers a consumption tax on red meat, which is also considered in Caro et al. (2017) for Denmark.

3 The tax was based on emissions per kilo of red meat in Norwegian agricultural production, and a general GHG tax of NOK 420 per ton of CO₂ equivalent as proposed in the Green Tax Commission (NOU 2015, 15).

4 Note that the standard approach in e.g. contingent valuation studies is that respondents are asked their WTP for a given scenario of environmental improvement, and this would be the same for all respondents. In our case, the environmental improvement would depend on the stated level of tax that people choose, and respondents would see this change as they move the cursor on the tax scale.

5 Other external costs of driving a car were not included in these calculations.

6 20 NOK * 5 passes * (52/12) weeks/month = NOK 433.33 per month

7 In the survey it was assumed that an average trip with a toll passing would be 20 km inside the city/the cordon.

8 The tax level on petrol or electric cars could equally well have been used. We chose diesel cars since they contribute the most to local air pollution in cities.

Additional information

Funding

The paper is based on research funded by the Norwegian Research Council (grant numbers 235560 and 280393).