Can revenue recycling make fossil fuel subsidy reform and carbon tax socially acceptable? A survey experiment in Colombia

Carbon pricing needs to be a cornerstone policy to reach the Paris Climate Agreement. A common concern for introducing even moderate adjustments to prices is related to the possible adverse (or regressive) impacts on poverty and inequality. Colombia is in the process of phasing out fossil fuel subsidies and has also introduced a carbon tax. Since these types of policies can generate public revenue, experts suggest to design pricing policies that include revenue recycling schemes. The underlying question we aim to answer is what type of revenue recycling scheme significantly increases public support for fossil fuel subsidy reduction (FFSR) and/or carbon tax in Colombia. We intend to carry out a country representative survey experiment (N=2000 households) to test for different revenue recycling schemes and whether additional information could further increase support. The results and analysis will highlight viable entry points for the development of climate policies and related communication campaigns in Colombia. Keywords: Carbon tax; fossil fuel subsidy reform; revenue recycling; public support; survey experiment; Colombia