How to design welfare systems to increase popular support to climate policy

The project, headed by Joakim Palme, aims to examine if specific forms of redistribution via welfare systems can increase public support for climate policies in countries with the largest carbon dioxide emissions.

Climate action is necessary to prevent irreparable damage to global ecosystems, but the most powerful climate policy instruments tend to foment opposition and conflict.

Carbon taxes are considered one of the most effective climate policy strategies to reduce greenhouse gas emissions. However, they are economically regressive and tend to be unpopular with the broader public. In particular, people with slim financial margins tend to be hard hit by price rises, which has caused many people see carbon taxes as unfair. If taxes of this kind are introduced without broad public support, the result may be increased polarization and social unrest, and ultimately failure to implement vital climate reforms. The emergence of protest movements such as the Yellow Vest Protests in France and Bränsleupproret (“the Fuel Revolt”) in Sweden are clear examples of this. This risk is especially prevalent in times of political and economic unrest.

The project examines attitudes to policy packages, which are designed to mitigate the economic impacts of carbon dioxide taxes for the most economically vulnerable households. The researchers will be studying and comparing some of the countries responsible for the largest carbon dioxide emissions. A growing body of research has examined how various compensatory measures influence public acceptance of carbon taxes. Yet, there has been no causal analysis of how and to what extent various welfare programs could be tailored to increase such acceptance, particularly not in terms of cross-country comparisons. There is therefore a need to ascertain whether welfare measures can help to reduce opposition to carbon dioxide taxation and counter the risk of polarization, social unrest and a political stalemate. One key question is whether welfare initiatives intended to compensate for climate action can be designed in the same way in all countries, or whether specific institutional solutions must be developed for use in differing political and societal contexts.

The researchers aim to draw up specific policy recommendations for decision makers, on how carbon dioxide emissions can be reduced while also combating polarization and inequality. Knowledge of this kind is vital, both to drive the research field forward, and to show that countries in different circumstances can be part of a common approach to achieve a fossil-free future.