Research News

A Name Makes All the Difference, Suggests CRED Research

2009-08-04

Can climate change policy be advanced by changing one little “dirty word”? A survey by the Center for Research on Environmental Decisions (CRED), based at the Earth Institute, Columbia University, and the Institute for Social and Economic Research and Policy, Columbia University, suggests that Americans are more willing to pay an added amount to mitigate carbon-dioxide emissions when it is referred to as a carbon “offset” rather than as a carbon “tax.”

The study results will be published soon in an article titled “A Dirty Word or a Dirty World? Attribute Framing, Political Affiliation, and Query Theory,” in the journal Psychological Science. The article was co-authored by David Hardisty, a Ph.D. candidate in Psychology working with CRED; Elke Weber, the Jerome A. Chazen Professor of International Business at Columbia Business School, professor of psychology and co-director of CRED and the affiliated Center for Decision Sciences; and Eric Johnson, the Norman Eig Professor of Business at Columbia Business School.

For the present study, 898 participants of various political affiliations considered choices between products and services (such as airline tickets and electricity providers) that were identical in every respect except that one option included a small fee earmarked for canceling the emitted carbon dioxide. Participants who self-identified as Republicans and Independents were likely to prefer paying the 2 percent fee when labeled as a “carbon offset” but were largely unwilling to pay it if it was called a “carbon tax.” Participants who identified themselves as Democrats were likely to pay the carbon fee regardless of its designation.

The difference in labeling also affected support for regulation. On average, participants from all political backgrounds supported a mandatory national "carbon offset" program, while primarily Republicans strongly opposed a mandatory "carbon tax" program with the same details. For both the tax and the offset, participants were told that the revenue from the cost increase would be used to fund alternative energies and carbon sequestration.

“Attribute framing, or the way in which a feature like the carbon surcharge is being described as either a tax or an offset, can influence what we choose because the frame influences the order in which we consider our choice options,” says Weber.  “Query Theory, a model of how we figure out what we want, developed by Eric Johnson and myself, tells us that options that are considered first are more likely selected.  When an environmentally friendly option comes with label that puts us off (the dirty word “tax”), we immediately look at what else there is to choose from and are more likely to end up selecting those other options.”

In the social sciences, the term framing refers to the selection of words and phrases to encourage certain interpretations. The CRED study finding is intriguing because it implies that it is the framing—in this case negative associations with the word tax—rather than the concept of a carbon tax that is repellent to people who consider themselves to be on the conservative side of the political spectrum and demonstrates that interpretation of a frame differs based upon characteristics of the audience (e.g., political affiliation).

Many economists, and even a study by the Congressional Budget Office, argue that a carbon tax is a more straightforward and effective structure for mitigating carbon emissions than a cap-and-trade policy, in which total carbon emissions are capped and companies can sell and trade carbon credits. But since a carbon tax has failed to gain wide support, cap-and-trade is the system written into the version of the American Clean Energy and Security Act (ACES) that narrowly passed in the House of Representatives in June and is currently moving through the Senate. Paradoxically, the carbon offset industry, in which the buyer of a service or product voluntarily pays an extra fee to finance alternative energy projects, plant trees or otherwise balance out the impact of carbon emissions produced by the purchase, continues to grow in popularity.

"A lot of people working on environmental policy may not realize the importance of the word tax to conservative individuals," says Hardisty. "What might seem like a trivial semantic difference to one person can have a large impact on someone else."

One of CRED’s key goals is to reach out to policy and decision makers and disseminate social science-based knowledge related to climate variability and climate change. To find out more about CRED research, training and education, contact CRED’s associate director, Sabine Marx.