Carbon tax has been shown to generate revenue and contribute to greenhouse gas reduction in several parts of the world. Yet, the lack of public support has continued undermining its implementation in Africa. There are concerns that a carbon tax could have an adverse effect on poverty and inequality, particularly for low-income households. However, studies show that if all countries return the carbon revenues to their citizens on an equal per capita basis through carefully designed policies, reaching a 2°C target as well as alleviating poverty can be attained (Budolfson et al., 2021). This study aims to determine the effect of information provision and distributive preferences of revenues on household acceptance of carbon tax in Nigeria.
Using an experimental design, a total of 720 households will be selected and assigned randomly to two groups, treatment (N = 360) and control (N = 360). The treatment group will be provided with information on the workings of the carbon tax and four revenue-use options to allocate tax revenues. Baseline and end-line data will be collected with a structured questionnaire. The probit model and double-difference estimation technique will be applied in data analysis. The outcome of this study will highlight factors that can facilitate public acceptance of carbon tax as well as inform policies and actions for attaining Nigeria’s Nationally Determined Contribution targets.
This study is, therefore, relevant for reducing poverty because carbon pricing can create opportunities for redistribution of revenue to benefit the poor. Also, if the carbon tax policy is successful, it will help reduce the adverse effects of climate change. Policy support for carbon tax is, therefore, critical in achieving Sustainable Development Goal (SDG) 13.
