Removing fossil fuel subsidies is important for mitigation and making carbon pricing polices effective. We find that removing subsidies on fossil fuels may not generate more public resistance (or support) than introducing a carbon tax, and by specifying alternatives for revenue recycling, the level of acceptability may increase.
Recommendations for policy
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The results concerning policy attitudes imply that removing subsidies on fossil fuels may not present much more of a political challenge than introducing carbon taxation.
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Specifying alternatives for revenue recycling — where public funds currently used for subsidies are instead directed toward other public investments — might increase the level of acceptability of carbon pricing and subsidy removal.
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Fossil fuel subsidy removal frees public funds for investing in social and economic development, which would be of great value and use in many developing countries.
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Before deciding on removing existing fossil fuel subsidies, careful country-specific investigations should be done to determine the preferred options for revenue recycling among the public.
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Further reading
Support for Fossil Fuels Almost doubled in 2021, Slowing Progress Toward International Climate Goals, According to New Analysis from OECD and IEA (IEA & OECD, 2022); https://go.nature.com/3e9jdixThis report provides the most recent data on fossil fuel subsidies globally.
Bergquist, M., Nilsson, A., Harring, N. & Jagers, S. C. Meta-analyses of fifteen determinants of public opinion about climate change taxes and laws. Nat. Clim. Change 12, 235–240 (2022). This study determines which variables are most strongly associated with public support for climate policy instruments.
Mildenberger, M., Lachapelle, E., Harrison, K. & Stadelmann-Steffen, I. Limited impacts of carbon tax rebate programmes on public support for carbon pricing. Nat. Clim. Change 12, 141–147 (2022). This study explores how carbon tax rebate programmes in Switzerland and Canada affect public support for carbon taxes.
Mundaca, G. How much can CO2 emissions be reduced if fossil fuel subsidies are removed? Energy Econ. 64, 91–104 (2017). This study investigates the price elasticities for fossil fuels and the effects of fossil fuel subsidy removal on climate emissions.
Acknowledgements
We are grateful for financial support from FORMAS — the Swedish research council for Sustainable Development 2019-00916; 2019-02005, The Swedish Research Council: 2016-03058, The Swedish Energy Agency: 2019-006655.
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Harring, N., Jönsson, E., Matti, S. et al. Public acceptance of fossil fuel subsidy removal can be reinforced with revenue recycling. Nat. Clim. Chang. 13, 214–215 (2023). https://doi.org/10.1038/s41558-023-01609-4
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DOI: https://doi.org/10.1038/s41558-023-01609-4
