Changing prices in a changing climate: electoral competitiveness and fossil fuel taxation (LSE)

Even though economists advocate a tax on fossil fuels, many countries show reluctance to increase the price of fossil fuels. This paper examines the influence of electoral competitiveness on such policy decisions and in particular on politicians’ preferences for imposing short-term costs on voters. The paper argues that policymakers are most likely to increase taxes when competitiveness between political parties is low and when voters perceive there to be a low personal cost as a result of increases. Download the full report on the LSE website.