CO₂ taxes are intended to encourage consumers to opt for more climate-friendly products more often. However, a large-scale randomised online study shows that their impact can be more complex. Whilst higher taxes generally reduce demand for CO₂-intensive products, Compared with an import tax of the same amount, however, a CO₂ tax has the opposite effect: if the tax is merely announced but not levied, demand for CO₂-intensive products falls. As soon as a positive CO₂ tax is actually levied, however, demand for such products is relatively higher than it would be with an import tax of the same price. This difference is particularly evident among consumers who are especially concerned about the climate. The results suggest that CO₂ taxes can partially offset the influence of climate concerns on individual consumption decisions.
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