Department of Management, Society and Communication

Berlingske interview with MSC researcher Alice Pizzo about carbon taxes

In a front page interview in Berlingske Business from late November, Postdoc Alice Pizzo is interviewed about her research on carbon taxes and consumer behavior. In the interview, she outlines both expected and unexpected findings relating to consumer responses to CO2 taxes imposed to control consumption.

The findings are presented in the paper “Carbon Taxes Crowd Out Climate Concern: Experimental Evidence from Sustainable Consumer Choices”, authored by Alice Pizzo with MSC colleagues Jan Bauer and Lucia Reisch, and Christina Gravert from the University of Copenhagen.

Key findings
The paper dives into how carbon taxes influence consumer behavior in relation to their price effect. While carbon taxes generally reduce demand for high-carbon goods, they can also unexpectedly crowd out the intrinsic motivation driven by climate concerns, especially among those who are already concerned for the climate. Key findings include:

• A higher carbon tax does lower demand for high-carbon products. However, when no actual tax is applied, but consumers are explicitly made aware which product would be taxed, they avoid high-carbon options more than when a similar import tax is applied.
• When positive taxes are applied (20% to 60%), this relationship flips: consumers show a relatively higher willingness to pay for high-carbon goods under a carbon tax compared to a comparable import tax.
• For highly climate-concerned individuals, the tax seems to “license” them to feel they’ve done their part, resulting in a willingness to indulge in high-carbon options.
• A sufficiently high tax level is needed for the price effect to overcome this licensing effect.

Implications for Policy
These findings carry a cautionary tale for policymakers. A salient but insufficient carbon tax might dampen intrinsic motivations, potentially weakening climate efforts if climate-concerned individuals are to license their behaviors. Specifically, introducing too low prices on carbon could even increase aggregate demand if the crowding out exceeds the price effect. This underscores the importance of finely calibrating carbon tax policies to avoid counterproductive effects.

The study is funded by Novo Nordisk Foundation, as part of BEACON Behavioural Insights for a Circular Society project, which investigates consumer behavior to address critical challenges to reach a sustainable lifestyle to support the building of a Circular Society.

Read more
Find the interview in Berlingske here: De klimabevidstes aflad. Studie om CO₂-afgifter kaster overraskende nyt lys på forbrugernes adfærd (27 November, 2024)
Find the working paper here: Alice Pizzo, Christina Gravert, Jan M. Bauer, Lucia Reisch, “Carbon Taxes Crowd Out Climate Concern: Experimental Evidence from Sustainable Consumer Choices”, CEBI Working Paper Series, working paper 16/24.

For more information, contact Alice Pizzo, ap.msc@cbs.dk.

Externally funded Retreat for CBS BLC students and MSC teachers

In October, the language teachers of CBS’ Business, Language, and Culture programme, along with over 90 students, participated in a two-day ‘language retreat’ north of Copenhagen. This retreat brought together students from various language tracks (French, German, and Spanish) and different cohorts, including both bachelor’s and master’s programmes, fostering a sense of community among language students at CBS.

During the retreat, students participated in various joint workshops. They learned from alumni who shared how they apply the language skills and cultural knowledge acquired during their BSc and MSc studies in the BLC programme in their professional lives. This event provided a unique opportunity to strengthen and expand the community of language students, allowing for an immersive two-day experience focused on language practice and reflection on intercultural competences.

The retreat was made possible thanks to the extraordinary funding received from the Sprogløft initiative, supported by the Danish government and political parties in the Danish Parliament.

Thomas Kirkevang from European Energy speaks at the retreat about sustainability, language skills, and personal competencies – and encourages the students to dare be the ’black sheep’ (photo Cristina Riera).

As Thomas Kirkevang put it: “when you are in a different culture you are seen as the black sheep/the one who does not belong. You must not only get used to this but integrate that part of being an “outsider” in order to be successful. By letting go of this reality and accepting it as part of your person in the culture you are in, it becomes a competitive value again” (translation Carsten Humlebæk).

The Sprogløft funds have also been used to develop extracurricular intensive language courses aimed at enhancing students’ written, oral, and social skills in their respective languages. Additionally, the BLC programme has organized several professional-cultural events, where students have had the opportunity to interact with guests from outside the university, including representatives from NGOs, embassies, and the business world.

For further information, please contact María Emilia Casco Flores, mecf.msc@cbs.dk.

The Department of Management, Society and Communication

The department came into existence on 1 January 2017 as a result of the merger of the Department of Intercultural Communication and Management and the Department of International Business Communication. Read about MSC's research profile here and about it's research-based education here.

MSC is located in the Dalgas Have part of the CBS campus. As one of CBS' largest departments, it occupies most of the second floor of the building.