Combining Taxes and Moral Suasion for Resolving the Energy-Climate Nexus: Experimental Evidence of a Conflict
نویسندگان
چکیده
Many countries are using a mix of two policy instruments to induce consumers to reduce their energy use: On the one hand, they rely on moral suasion in order to seed and nourish ’green’ motives. On the other, there is the use of regulatory instruments such as energy taxes and command-and-control to affect behavior using external incentives. While conventional theory would assume motives and incentives to be independent, this has recently been questioned both by evidence and cognitive theories of motivation crowding. We contribute to this emerging literature by adding another dimension to the ’prices versus quantities’ debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-off between real CO2 emissions and private monetary payoffs to both a price and a quantity instrument are tested. We find evidence that taxes crowd out intrinsic motivation while emission standards are neutral. Crowding is short term persistent and not well explained by established cognitive theories of motivational crowding. JEL codes: H23, H41, Q58, C91
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