Electricity prices and preferences for climate and energy policy

Abstract

We analyse the impact of high electricity prices on individual preferences and attitudes toward climate and energy policy in Sweden. Our identification strategy leverages key features of the data and study design. First, consumers are distributed across four electricity price areas, each characterized by varying and often divergent electricity prices. Second, surveys were conducted in four distinct waves. Notably, between the second and third waves, electricity prices were nearly identical across price areas, whereas after the third wave, significant price differences emerged. Using multiple estimators that exploit these features, we find that higher electricity prices: (1) reduce acceptance of a carbon tax, (2) increase support for nuclear power, (3) diminish concerns about climate change, and (4) have no significant impact on other political attitudes or food consumption preferences.