Why does climate action fall short despite widespread worry? Here's the role economic anxiety and other concerns play in decision-making

Climate change poses a monumental challenge to our planet, affecting every aspect of our environments, economies and societies. Our planet is at a tipping point. Increasing temperatures, rising sea levels and extreme weather events signal an urgent need for action. But the response from governments, industries and individuals often seems lacking.

As a researcher at Harvard and founder of the Social Economics Lab, I’ve been intrigued by a critical question: Despite the growing awareness and concern among citizens about climate change, why don’t we see more effective action against it?

This paradox lies at the heart of one of our recent studies across 20 countries conducted with researchers from the OECD and other universities. We delved into the complexities of public opinion on climate policies in these countries, seeking to understand the underlying reasons behind the support or opposition to these initiatives.

We found several reasons for people’s support (or not) of climate policies (or lack thereof). Unsurprisingly, perhaps, people are more likely to support policies they believe will make a real difference in mitigating climate change.

However, there is a clear gap in understanding the environmental impact of these policies. For instance, by how much would carbon emissions decline if we imposed a 5% tax on fuel prices? What is the impact on pollution of banning cars from city centres? This understanding gap is unsurprising given how complex these impacts can be, even for climate scientists. But it often leads to skepticism and reluctance to endorse climate policies.

We also found people are concerned about the personal financial impact of climate policies. Many fear such policies might lead to increased living costs or taxes, affecting their day-to-day life. This economic anxiety is a significant barrier to gaining widespread support for necessary climate actions, especially among lower-income households or those constrained by where they live and what modes of transport or energy are available to them.

But perhaps our most interesting finding was that people are not just driven by self-interest. There is a strong concern with how climate policies affect the less well-off in society. The potential impact on inequality, especially the burden on poorer communities, is crucial in shaping public opinion on climate policy. People are more likely to support policies they perceive as progressive, in other words, those that assign more of the financial burden to high-income households.

This creates three important implications for policymakers seeking to act against climate change.

1) The design of climate policies must lean towards progressiveness

Carbon taxes are often met with resistance, for instance. But their popularity significantly improves when their revenues are allocated towards progressive causes. When the funds are used to make direct cash transfers to low-income or vulnerable households, for example, or are earmarked for green investments, these taxes garner much more public support than if they were used for equal transfers to all or absorbed into general government revenues.

2) People tend to prefer regulations over taxes

For instance, many of the respondents to our study favour outright bans on polluting vehicles in dense urban areas over imposing taxes on such vehicles. While economists might find this approach less efficient than corrective taxes or subsidies, it resonates with people’s desire for equitable solutions. Allowing wealthier individuals to “pay to pollute” is unpalatable to many people, who instead support rules applicable to everyone. This also reflects a deep concern for equity and fairness in environmental policy.

3) Targeted information is crucial

People are already worried about climate change, so it’s not a lack of knowledge about the consequences of climate change that stops them from taking or supporting action. What truly makes a difference is explaining how specific policies will not only reduce emissions but also be progressive in nature. Assurances that policies will not disproportionately harm low-income individuals, or that there will be adequate compensation for affected poor households, can dramatically increase public support for these initiatives.

This leads to a broader lesson about the value of transparent and focused policy communication. Providing citizens with clear, relevant information about the climate policies affecting their lives is fundamental. But it is not just about informing; it’s about addressing specific concerns and demonstrating how policies are crafted with fairness and effectiveness in mind.

Our study offers some cause for cautious optimism. It shows we can refine our approach to climate policy to make it more effective and widely supported. By creating progressive policies and equitable regulations, and explaining them properly to the general public, governments can encourage a stronger collective commitment to tackling climate change.

The author is a member of the World Economic Forum's Global Future Council on the Future of Growth, part of the Future of Growth Initiative. The initiative aims to support policymakers in balancing growth, innovation, inclusion, sustainability and resilience goals while managing the trade-offs and leveraging their synergies. For more information or to get involved, please contact cnes@weforum.org.