Event Information
The next EEU Seminar will be held on Monday the 16nd of December at 12:10 – 13:00 in B44.
The seminar will be held by our own Jens Ewald, he is a PhD candidate in his final year, at the Department of Economics at the University of Gothenburg. Ewald will present his job market paper Shocking Electricity Prices and Carbon Tax Aversion. His research interests lie primarily within the fields of environmental economics, political economy, and applied microeconomics more generally.
When: Monday, December 16nd at 12:10-13:00
Location: B44 or via Zoom.
Speaker: Jens Ewald
Title: Shocking Electricity Prices and Carbon Tax Aversion
Abstract: I investigate the political economy implications of high energy prices, focusing on how price shifts influence public beliefs and acceptance of carbon taxation. Rising fossil fuel prices are inevitable on any path towards a sustainable economy, making it essential to understand how energy prices affect the feasibility of implementing effective climate policies, such as carbon pricing. Using a targeted survey and a quasi-experimental regression discontinuity design in Sweden, where households near electricity zone borders experience different price levels, I explore how exposure to higher electricity prices shapes beliefs about carbon taxation. The analysis centers on four key beliefs often linked to opposition to carbon taxes: perceived household costs, environmental efficacy, and the tax's impact on poor as well as rural households. The findings show that higher electricity prices lead to more pessimistic beliefs about the cost and progressivity of carbon taxation, and also directly lower carbon tax acceptance, particularly among groups already skeptical of carbon taxation. Moreover, the study employs an instrumental variable approach, for which I introduce information treatments in the survey to serve as instruments, allowing for the estimation of the causal effect of these beliefs on carbon tax acceptance. These information treatments provide participants with specific facts to influence their beliefs independently of other factors. Results indicate that beliefs about increased household costs and the environmental effectiveness of the tax strongly influence acceptance, whereas concerns about its impact on poor and rural households reduce it to a moderate degree. Finally, I note that the changes in beliefs about household costs and the progressivity of the tax, driven by fluctuations in electricity prices, account for a substantial portion of the observed variation in carbon tax acceptance resulting from these price changes.
Hope to see you there!