The social acceptability of a personal carbon allowance: a discrete choice experiment in Belgium

ABSTRACT

Personal carbon allowances (PCAs) can complement current carbon pricing policies to achieve the sharp cut in emissions needed to meet the climate targets set by the Paris Agreement. While their effectiveness crucially depends on their social acceptability, there is little evidence on which specific characteristics of their design are preferred by citizens and how these preferences might differ within a society. Our study aims at eliciting preferences for a specific PCA scheme and explores their heterogeneity, using a discrete choice experiment among Belgian citizens and analyzing mixed logit and latent class models. Discrete choice experiments are a widely used tool to deliver key insights to policy design, but have rarely been used in the context of a PCA design. We find that intergenerational differences are important factors to explain citizens’ willingness to accept a PCA, with younger people strongly in favour. A PCA that includes carbon price regulations and provides tailor-made advice on how to reduce carbon emissions, is more likely to be accepted. However, purchase limits for emission thresholds beyond which a tax is imposed should be carefully introduced, as we find large heterogeneity across citizens’ willingness to accept this. These differences are correlated with current emission and income levels, and awareness about PCA. Our study is a first step in designing and developing a PCA, as investigating its social acceptability is a prerequisite before actual implementation.

Key policy insights

• Large intergenerational differences in the social acceptability of a PCA exist, with younger people strongly in favour.

• Carbon price regulations increase social acceptability, either through minimum and maximum prices or through a fixed price by experts.

• Provision of tailor-made advice to reduce personal carbon impact increases social acceptability.

• Introduction of purchase limits for emission thresholds, beyond which a tax is imposed, needs to be complemented by additional measures to ensure climate justice.

KEYWORDS:

• Personal carbon allowances (PCA)
• carbon accounting
• carbon emissions
• social acceptability
• policy instrument design
• choice experiment

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Also referred to as personal carbon trading schemes.

2 Some small-scale experiments have been implemented in e.g. Canada, Australia, China, and Finland (Guzman & Clapp, 2017; Hendry, 2019; Tan et al., 2019; Kuokkanen et al., 2020).

3 An example is the consortium of the Swedish firm Doconomy and MasterCard.

4 To our knowledge, only Bristow et al. (2010) have used a DCE to analyze the social acceptability of a PCA.

5 In theory, it is possible that citizens do not use all of their carbon units and can hence re-sell. However, in our sample this was the case for only 3.6% of the respondents.

6 ‘Nos GEStes Climat’ simulator, available on: https://nosgestesclimat.fr/.

7 The following cheap talk script was used in French: ‘Sur les six cartes suivantes, veuillez faire votre choix entre les trois options proposées. Assurez-vous de choisir tel que vous le feriez si l’option choisie devenait réelle pour vous.’

8 Given the jumps in the price levels, we also tested a model in which price was specified as a discrete variable, but this did not change the main results.

9 We estimated the model using effects coding as well and did not find a significantly different coefficient for the ASC.