According to a 2012 study by the economists Bryan Bollinger and Kenneth Gillingham, a carbon tax that induced a family to install solar panels could be expected to stimulate a neighbor’s copycat installation within four months, on average. Let another four months pass, and each of these two will have spawned additional installations of their own, for a total of four.
At the end of just two years’ time, these figures suggest, the initial new installation will lead to 32 new installations. Contagion doesn’t stop there, either, since each of these families will have shared news about their projects with friends and family in other locations.
Behavioral contagion also has been shown to influence dietary choices. People often eat meat because they grew up with, and continue to live among, people for whom substantial meat consumption is the norm. Because meat has a large carbon footprint, a carbon tax would make it more expensive relative to plant-based foods.
The direct effect of this price change would be small. But as some people shifted the composition of their diets, others would find it easier to shift as well. In short order, these positive-feedback effects would produce more widespread shifts in eating habits. Behavioral contagion would similarly amplify initial responses to a carbon tax in virtually every other energy-intensive activity.
Even with such gains in prospect, many legislators remain unenthusiastic because they perceive a carbon tax as being unpopular with voters. Many families have been struggling to make ends meet, they might say, and the last thing they need is a stiff new tax on energy use. But this problem has a simple solution, which is to adopt what economists call a revenue-neutral design. Under one version, all revenue from the tax would be returned to consumers in the form of monthly rebate checks.
Because the wealthy consume much more energy than others, they would contribute a disproportionate share of the revenue from a carbon tax. The top 10 percent of all income recipients account for almost half of carbon emissions worldwide, an Oxfam International study has found.
Use patterns are less skewed in the United States, but here, too, the wealthy live in bigger houses, drive bigger cars and, at least when the pandemic isn’t raging, take many more trips to distant destinations. Even with equal rebates per capita, most people would get a monthly check for more than they’d paid that month in carbon taxes. Rebates could, of course, be distributed in a more progressive fashion.