Carbon Tax Saliency: The Case of B.C. Diesel Demand

Bernard, Jean-Thomas; Kichian, Maral

doi:10.2139/ssrn.3100567

Cited by 3 publications

(1 citation statement)

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“…Andersson (2019) estimates tax-elasticities to be about three times larger than price-elasticities in the case of gasoline in Sweden. Both Rivers and Schaufele (2015) and Bernard and Kichian (2018) find that British Columbia's carbon tax had a larger impact on gasoline demand than an equivalent increase in price. Li et al (2014) in the USA and Baranzini and Weber (2013) in Switzerland get similar results for gasoline taxes, which suggests taxes on fossil motor fuels are likely to display salience and therefore command larger responses than market price variations of similar magnitudes.…”

Section: Introductionmentioning

confidence: 99%

How effective is carbon taxation on residential heating demand? A household-level analysis

Ott

Weber

2022

Energy Policy

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This paper investigates the impact of the Swiss CO 2 levy on households' heating demand. Using a difference-indifferences approach combined with inverse probability of treatment weighting, we test whether the 2016 and 2018 carbon tax rate increases had a short-run impact on Swiss households' heating and hot water expenditures-i.e. a proxy for heating consumption. Micro-level data from the Swiss Household Energy Demand Survey are used to estimate the models. Our regression analysis shows that heating consumption decreases with time for all households, but it does not detect any clear short-run impact of the CO 2 levy on fossil fuel users in comparison to non-fossil fuel users. We nevertheless find that many factors significantly affect heating consumption, such as setting the thermostat at a lower temperature. Even though further research is needed regarding possible long-run impacts, our findings challenge the relevance of this policy instrument under its current form to lower households' CO 2 emissions. Considering that its rate is regularly increased based on shortrun emission targets, households may have too little time to adapt. The tax design might thus need to be revised to take into account the slow reaction time.

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