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The perception paradox: understanding risk is key to selling the carbon tax

Julia Gillard can sell the tax better if she puts it in terms of the natural wonders we are buying back. AAP

Science is strengthening its view that business-as-usual emissions of greenhouse gases will result in serious risks while the Australian public’s perception of climate change as a risk erodes.

A recent Lowy Institute Poll shows the proportion of the public who say “until we are sure global warming is really a problem, we should not take any steps that would have economic effects” has risen from 7 to 19% between 2006 and 2011.

81% believe climate change to be a problem, but support for a serious/gradual response has shifted from 68%/24% to 41%/40%.

75% think the federal government has done a somewhat to very poor job of addressing climate change. And in current political polling, a majority of Australians are opposed to a “carbon tax”.

This shows an increasing gap between the calculated and perceived risks of climate change, although a majority remained concerned.

It also shows a gap between the perceived risks of climate policy and benefits of implementing that policy.

Understanding how emotionally-driven processes affect decision making has become a critical task. Cultural theory positions how analytical and emotional thought processes influence personal assessments of risk.

For example, egalitarians seek what they regard as fair and equitable solutions whereas individualists seek alternatives that maximise personal freedom. One American survey found the majority considered climate change a moderate risk. But the majority were also opposed to potential tax measures to manage that risk. These results are consistent with Australian attitudes summarised above.

The study found that support for tax depended strongly on the following factors:

Egalitarianism was the single most powerful predictor of support. The second-most powerful predictor was political ideology, followed by holistic negative affect. Naysayers, individualism, hierarchism, education, and whites remained significant, though weaker predictors in the full model. Thus, values and affect were stronger predictors of support for tax policies than the socio-demographic variables, with the exception of political ideology.

The politicisation of climate change science has accentuated the divide in attitudes to climate change in the US and Australia. Opinions on carbon pricing fall strongly along political lines.

A clue to how the carbon price is currently being received can be seen in the Lowy Poll. Between 2009 and 2011 those not prepared to pay anything on their electricity bills rose from 21% to 39%. Those willing to pay $21 or more per month rose from 19% to 22%.

In that time, the price of utilities has roughly doubled, showing a strong associational affect on willingness to pay. The issue is magnified by uncertainty about the national and global economy, despite Australia’s strong position, which strongly depends on fossil fuels.

The risk perception paradox occurs when the majority of people identify climate change as a risk but also oppose measures that directly affect them as individuals.

Climate change is seen as remote whereas the perceived effect of a tax on income or job security is immediate. People are unsure of the benefits of a price on carbon, how it affects them, their jobs and the economy.

Personal support for a carbon price is more likely if people know how they will be affected; they are in control of the transaction and can see a direct benefit from it.

Let’s boil it down to a straightforward purchase. We have a package (a carbon price) that we buy from a shop-keeper (Julia Gillard) in return for a long-term benefit (reduced risks from climate change).

A recent report in the Sydney Morning Herald suggested that people had lost trust in the shopkeeper.

If the “seller” has credibility issues, then the product is suspect, particularly if the benefit from the purchase is not immediate.

This is how the benefits are being sold in the Clean Energy Plan:

Taking action on climate change is in our national interest. Australia faces acute risks from climate change. Faced with the serious negative consequences for our natural systems (including national icons like the Great Barrier Reef and Kakadu), our economy and our way of life, it would be irresponsible not to play our part in international action on climate change. Taking action sooner rather than later means that the transition to a clean energy future can be more gradual, manageable and affordable. Treasury modelling shows that, for economies like Australia, deferring action will only lead to higher long-term costs.

This is too abstract. Research is needed to clearly articulate the returns of a carbon price in terms of avoided damages. These returns need to directly address people’s framing of value.

For example, one year’s emissions of CO₂by Australia leads to about 5,000 to 10,000 hectares of the Great Barrier Reef being critically bleached by 2030.

These are sunk costs.

A 5% reduction in those emissions returns 250 to 500 hectares as a functioning reef ecosystem. And that’s just a potential measure of Australia’s efforts. Add reduced heat stress (lives saved, higher productivity), ecosystem health, water extremes, storm intensity and so on. Even the language of selling the package compared to buying its benefits invites a different psychological response.

By quantifying the benefits of Australian and associated international action, research can give the ordinary person a better idea of what’s in the package.

And that could make them more willing to take it off the shelf.

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