What makes climate policy acceptable in middle income countries?

What makes climate policy acceptable in middle income countries? Novel evidence on the role of compensation and information Just transitions aim at making deep green transformations fair and socially just. This is both intrinsically important, as well as instrumental; in fact, it has been found that fairness is a critical factor of climate policy acceptance by citizens. Carbon fiscal reforms have, in the past, often met strong political opposition, as witnessed with the Witness the French “yellow vests” protests and subsidy reforms in low and middle income countries (Klenert et al., 2018). One way of making climate policy fair is to use social protection instruments to compensate potential losers from climate policy. Despite the recent surge in the use of simulations to understand the incidence of carbon pricing also for lower income countries, the issue of preference and acceptability of carbon ricing and revenue recycling has been explored mainly for advanced economies (Maestre-Andrés, Drews, Savin, & van den Bergh, 2021). This is important as low- and middle-income countries will also need to implement green transformations; and because in those countries social goals, such as poverty eradication, my still be the most important ones. Social protection is also critical in the context of the COVID-19 crisis. To start addressing this gap, we conduct survey experiments in three countries across three different continents: Ghana, Philippines and Peru. In each country, we survey 900 middle class households in urban areas. More specifically, we explore factors that may increase the public acceptance of policy packages. We first focus on the role of the framing and information given; in fact, acceptability is also strongly linked to perceived fairness and knowledge. We then explore two types of revenue recycling options with differing degrees of direct cost or compensation to the participant: social protection programs and real donations to environmental projects. Using existing social protection programs could increase the saliency of revenue recycling and acceptability of carbon pricing overall and especially for prosocial, altruistic individuals. Revenue recycling to environmental projects via donations is likely to work well for people with high environmental concern and low trust in government. The results will shed light on the policy mix that maximizes acceptability by citizens. This is in turn important for policy implementation, as public acceptance is a crucial determinant of the political feasibility of climate policies. In particular, given the importance of justice and inclusion, it is critical to understand the available design options of carbon fiscal reforms, and especially of the social protection component, that best serve this goal. By having a comparative study design, we will also try to shed light not just at addressing the research gap in terms of low and middle income countries, but look at what other structural factor is important.