University of Michigan Gateway Ford School

Residential Utility Rates’ Effect on Americans’ Support and Willingness-To-Pay for Carbon-Pricing Policies

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October 2017

Jacob Podell

Abstract

Climate change mitigation policies are often politically challenging to implement; this is especially true in the U.S. where carbon-pricing mechanisms are a political non-starter across both federal and sub-federal levels of government. While previous work has found that designing the policy so that it is somehow “linked” to energy (e.g., a revenue recycling scheme in the form of rebate checks to ratepayers) does increase the public’s support, less attention has been paid to other ways the public’s interactions with energy affect support for these policies. Using a census of residential electrical utility rates in the U.S. and survey data on Americans’ support and willingness-to-pay for carbon-pricing policies, this article finds that the price one pays for electricity does not affect their overall support for these policies. The findings suggest that the concern that a given mitigation policy will result in higher electricity prices need not be a limiting factor when designing these kinds of policies from a political standpoint.

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