# Taxing Carbon, Framing Responsibility: How Framing, Licensing and Beliefs Shape Individual Responsibility under Carbon Taxes

Mathieu Guigourez

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Taxing Carbon, Framing Responsibility: How Framing, Licensing and Beliefs Shape Individual Responsibility under Carbon Taxes

Mathieu GUIGOUREZ

2026.03
# Taxing Carbon, Framing Responsibility: How Framing, Licensing, and Beliefs Shape Individual Responsibility under Carbon Taxes

Mathieu Guigourez *†

January 2026

## Abstract

This paper challenges the Pigouvian framing of carbon taxation as a neutral corrective tool, arguing that carbon pricing also reshapes how individuals understand their responsibility in the climate crisis. The paper synthesises four critiques – moral licensing, framing distortions, dampening effects, and endogenous preferences – showing how carbon pricing can displace or erode moral responsibility. In response, it introduces a distinction between accordant responsibility, defined as behavioural alignment with external incentives, and procedural responsibility, grounded in moral reflection and autonomous commitment. It challenges the view that price signals alone can engineer moral agency and argues for policies that sustain ethical commitments.

## Introduction

As climate policy increasingly relies on carbon pricing to steer individual behaviour, the relationship between fiscal instruments and moral agency demands closer scrutiny. Do carbon taxes merely correct market failures, or do they reshape how people understand their role in the climate crisis? The common justification for carbon taxation frames carbon emissions as a paradigmatic market failure, and more specifically, a negative externality that must be internalised. In the Pigouvian framework (Pigou, 1920), it is not the absolute level of pollution that matters, but whether the polluter faces a price that reflects the full social cost of their emissions. That cost (commonly quantified as the social cost of carbon and implemented as a carbon tax (Nordhaus, 2019, p.2000-2001)) serves as a corrective signal to align private incentives with social welfare. According to this logic, carbon taxes are not only corrective tools, but also efficiency-enhancing devices. They are often presented as one of the most rational and cost-effective instruments for tackling

<footnote>*CONTACT: mathieu.guigourez@univ-paris1.fr</footnote>

<footnote>†Université Paris 1 Panthéon-Sorbonne, Centre d'Économie de la Sorbonne, France</footnote>
climate change (Heal and Schlenker, 2019; Blanchard et al., 2023).<fnref n="1" />

While the public opinion may heavily reject the introduction of a carbon tax – consider, for example, the backlash in France by the ‘Gilets Jaunes’ (Douenne and Fabre, 2022) – other critics have argued that such a carbon tax could paradoxically increase the consumption of polluting goods (Bazin et al., 2004; Hartmann et al., 2023) as it can contribute to a crowding-out effect of individual commitments (Bazin et al., 2004), moral licensing (Hartmann et al., 2023) or may yield suboptimal results depending on how preferences are modelled (Mattauch et al., 2022). Carbon taxation has, thus, been conceptualised in total opposition to individual responsibility understood as voluntary individual commitments to reduce one’s emission levels (Bazin et al., 2004; Ballet et al., 2005, 2007). More specifically, I argue that the introduction of a carbon tax always implies a conceptualisation of individual responsibility for environmental issues, whether this is explicitly stated or not. Traditionally, the responsibility for correctly – and *optimally* – valuing the social damage was borne by the economist (whether carbon emissions are conceived as negative externalities (Pigou, 1920) or as a depleting stock (Hotelling, 1931)), leaving aside the responsibility of the agent. In other words, in a Pigouvian framework, the notion of responsibility is understood as a causal inference, done by the economist, between a level of social damage and a level of individual or aggregate consumption. The introduction of a carbon tax, thus, aims at operating such causal inference to make the polluter pay. In this framework, the moral agency of the individual is clearly understated.<fnref n="2" /> As such, this paper proposes to delve into this literature to examine the interplay of carbon taxes with individual responsibility.

Therefore, this paper presents new perspectives on the standard Pigouvian framework by examining how individuals interpret, internalise or resist carbon taxes. In principle, along an optimal path, a carbon tax equivalent to the marginal social cost of emissions would align private incentives with social welfare, providing an efficient and morally neutral policy instrument (Nordhaus, 2019). Yet, this view is based on strong assumptions about rational behaviour, fixed preferences, and a stable relationship between price signals and moral responsibility. Drawing on recent work in ecological economics, behavioural economics and climate ethics, I show that real-world carbon taxes interact with individuals’ beliefs, values, and perceptions in ways that systematically distort or undermine their intended effects. Salient taxes can license harmful consumption (Blanken et al., 2014, 2015; Hartmann et al., 2023); feedback effects can dampen moral motivation (Savin et al., 2020; Farhi and Gabaix, 2020; Kaufmann et al., 2024); and consumption levels are shaped by how norms are framed and implemented in the design of fiscal instruments (Dasgupta et al., 2016; Ulph and Ulph, 2021). Taken together, these arguments converge on a common focal point: the need for a broader and

<footnote n="1">¹For a historical overview of carbon tax policies since the 1970s, see Timilsina (2022).</footnote>

<footnote n="2">²In this paper, I understand moral agency as the individual capacity to ground their behaviours upon ethical and moral reflections.</footnote>
more nuanced understanding of the normative assumptions embedded in carbon tax design, attentive to the multiple ways environmental responsibility is shaped, signalled, or undermined.<fnref n="3" /> What is often treated as a neutral instrument for internalising externalities may, in practice, recalibrate the ethical terrain on which responsibility is ascribed and assumed. This paper addresses this blind spot in the framework by distinguishing between two conceptions of environmental responsibility: *accordant responsibility*, which aligns with behavioural adaptation to policy signals, and *procedural responsibility*, which rests on moral deliberation and self-ascribed obligation. This distinction offers a novel perspective through which to evaluate the interaction between climate instruments and the moral agency of economic actors. The central question this article addresses is whether carbon pricing instruments should be refined to better integrate these insights by deepening our theoretical understanding of responsibility – conceived as the *accordance* of individual behaviour with policy objectives – or whether these critiques instead call for a more fundamental rethinking of the paradigms underlying climate policy, grounded in what I term *procedural responsibility*.

Our method is to compare four different arguments analytically, each challenging one aspect of the traditional Pigouvian framework when addressing climate-related issues and individual responsibility, namely:

i. carbon taxes induce a moral licensing process, which risks crowding out individual commitments;

ii. tax salience launders moral responsibility;

iii. in a competitive equilibrium, market feedback may dampen the efforts of responsible consumers;

iv. when preferences are endogenous, the level of taxation must be adjusted if the carbon price crowds-out or crowds-in pro-environmental behaviours.

To analyse each of these arguments, I selected several articles that best represent or conceptualise these foundational critiques of the standard Pigouvian framework. From this analysis, I argue that effective and ethically coherent climate policy must recognise these dynamics and take into account the fragile structure of individual moral responsibility when designing carbon taxes, rather than bypassing it. As such, the paper offers a critical synthesis of recent theoretical and empirical challenges to the Pigouvian framework and argues that effective climate instruments must be designed not merely as mechanisms for internalising externalities, but as institutions that shape, sustain, or potentially erode the moral responsibilities of individuals engaged in collective ecological action. By foregrounding the interaction between pricing, responsibility, and institutional design, this paper contributes to both the philosophy of economics and environmental economics, bridging insights from climate ethics, behavioural science, social psychology, and public policy.

<footnote n="3">³By environmental responsibility, I define the capacity of individuals to reflect on –and act upon– their contribution to environmental harms, whether guided by external incentives or internal moral commitments.</footnote>
The remainder of the article proceeds as follows. Section 1 briefly introduces the Pigouvian justification for carbon taxation and frames the central tension between carbon pricing and individual responsibility. The subsequent sections examine four strands of the literature, each centred on a key reference before extending the analysis to its policy implications. Section 2 discusses the carbon tax model of Bazin et al. (2004), which introduces crowding-out effects and shows that, beyond a certain threshold, higher carbon taxes can erode rather than enhance moral engagement, effectively licensing consumption. Section 3 turns to tax salience, drawing on the survey-experimental evidence of Hartmann et al. (2023) demonstrating that making a carbon tax explicitly visible can trigger moral licensing, whereby individuals feel morally justified in purchasing the taxed good. Section 4 analyses a competitive-equilibrium model with socially responsible consumers proposed by Kaufmann et al. (2024), in which market feedbacks generate a dampening effect: well-intentioned actions may unintentionally increase aggregate pollution. Section 5 examines the model carbon taxation with endogenous preferences in Mattauch et al. (2022), highlighting how consumption values and environmental attitudes are themselves shaped by policy and must therefore be incorporated into optimal tax design. Taken together, these four frameworks reveal that carbon taxation does not merely incentivise behaviour; it also shapes, redirects, and at times undermines the moral responsibilities individuals ascribe to themselves. Section 6 synthesises these insights and introduces our distinction between *accordant* and *procedural* responsibility to assess whether carbon pricing should be reformed within the existing paradigm or whether the tension between taxation and responsibility instead calls for a deeper conceptual shift.

# 1 Internalising the Externality: The Logic of Carbon Pricing

In standard economic theory, environmental taxation is grounded in the notion that market transactions often impose costs on third parties (i.e. negative externalities) which are not reflected in market prices. Carbon emissions are a paradigmatic case: when individuals or firms consume fossil fuels, they contribute to climate change, but do not bear the full social cost of their actions. This asymmetry results in overconsumption of carbon-intensive goods and suboptimal environmental outcomes. The first section introduces the standard Pigouvian framework of taxing carbon emissions, as well as what we frame as “the paradox of carbon taxation”.

## 1.1 The Standard Pigouvian Framework

The historically predominant solution, first formalised by Arthur C. Pigou (1920), is to internalise the externality by imposing a tax on the polluting activity equal to its marginal social damage. In the context of ideal conditions (i.e. perfect information, rational behaviour, and no market power), this Pigouvian tax
ensures that private decision-makers face the full social cost of their actions. Consequently, this tax aims to align individual incentives with collective welfare. Pigou's insight was fundamental in establishing the basis for modern environmental economics by internalising negative externalities, a concept that has been challenged and refined ever since. As such, Ronald Coase (1960) notably argued that if property rights are well-defined and transaction costs are negligible, private bargaining could, in theory, lead to efficient outcomes without the need for taxes.<fnref n="4" /> However, the Coasean solution relies on conditions that are rarely met in the context of climate change, where information is diffuse, causality is complex, and the parties involved are numerous and asymmetrically positioned.

Building on Pigou's work, Baumol (1972) emphasised the practicality of pricing mechanisms, especially when marginal damages are difficult to calculate. Rather than setting the tax equal to the exact social cost, policymakers could use taxes to target aggregate emissions goals, trusting that price signals would efficiently distribute abatement costs across agents. This pragmatic turn has been refined in recent decades. As Aldy and Stavins (2012) note, carbon pricing, especially in the form of taxes or cap-and-trade systems, has become the dominant policy instrument in climate economics, valued for its cost-effectiveness, administrative simplicity, and scalability. Numerous empirical studies now support the idea that well-calibrated carbon taxes can reduce emissions without causing major economic disruption (Aldy et al., 2010; Lanz et al., 2018). Yet, even the extended Pigouvian framework is based on a particular view of human behaviour. It assumes that individuals are price-responsive utility-maximisers with stable, exogenous (i.e. fixed) preferences. According to this view, moral considerations or normative commitments are external – if not completely irrelevant – to the economic modelling practices and policy design. While this theoretical framework has produced a powerful policy paradigm, it remains open to criticism.

## 1.2 The Paradox of Carbon Taxation and Responsibility

In this extended framework of carbon taxation, a carbon tax establishes a causal and financial link between consumption and pollution, embodying the principle that the polluter should pay. While economists may diverge on the optimal value such a carbon tax should bear, they usually agree on the bigger picture. A central paradox of carbon taxation that emerges is that, by pricing emissions (supposedly at their marginal social cost) in an effort to hold individuals *accountable* for their ecological impact, it may simultaneously disengage them from deeper forms of moral responsibility. In other words, this economic conception of accountability does not imply, and may, in fact, erode a deeper sense of moral commitment from the individual (or the polluter in our case). Specifically, by conflating responsibility with price mechanisms, agents are treated as cost-sensitive optimisers rather than reflective moral subjects. In this context, the notion of responsibility

<footnote n="4">⁴On alternative interpretations of Ronald Coase's arguments, see Medema and Samuels (1997); McCloskey (1998).</footnote>
refers, to a sense of accountability which becomes transactional rather than deliberative (the polluter pays); and, at the same time, further individual moral commitments in spite of incentive-based mechanisms. The shift from normative deliberation to priced accountability is not unique to carbon pricing, but rather reflects a broader tendency in market-based environmental policy. By translating ecological harm into a monetary value, taxation preserves the logic of utility maximisation and crowds out deeper forms of ethical valuation. This phenomenon is empirically supported by Hartmann et al. (2023), who show that when a carbon tax is made morally salient—explicitly framed as a penalty for harm—it can paradoxically license further pollution, as individuals feel they have fulfilled their duty simply by paying the tax. Similarly, Bazin et al. (2004) argue that high taxation levels can displace voluntary restraint, leading to an increase in consumption rather than its reduction. Mattauch et al. (2022) further demonstrate that such behavioural responses must be accounted for in the design of optimal taxation, notably through second-best frameworks that anticipate crowding-in or crowding-out effects.

In terms of policy implications, the more responsibility is formalised through fiscal instruments, the more it risks becoming external to the agent's moral agency. The economic agent is no longer responsible as a person, but merely as a unit of optimisation, i.e. they are held responsible through fiscal mechanisms, rather than actively taking responsibility through reflection and commitment. This disconnect lies at the heart of what I term the *Paradox of Carbon Taxation and Responsibility*: the more you hold someone accountable through fiscal mechanisms, the less they actively take responsibility in reducing their carbon impact. To move beyond this paradox, climate policy must be informed by a more differentiated understanding of individual responsibility. As such, I will now delve into four different arguments challenging the standard Pigouvian framework.

## 2 Carbon Taxes Risk Undermining Environmental Responsibility

While the Pigouvian framework treats carbon taxation as a rational mechanism for internalising environmental harm, it often fails to account for how such fiscal instruments shape the moral landscape of responsibility. By translating ecological damage into a monetary cost, carbon pricing mechanisms can unintentionally recast environmental responsibility as a matter of economic compliance rather than ethical engagement. In this context, paying a carbon tax may be perceived less as a signal to reduce one's footprint than as a licence to pollute, which the recent behavioural literature calls a form of moral licensing. To account for this underlying risk of carbon taxation, I will ground my analysis on a carbon tax which seeks to incorporate a level of environmental responsibility. This critique is at the core of Bazin et al. (2004), whose model offers a pivotal, though under-acknowledged, contribution to the literature. Bazin, Ballet, and Touahri
conceptualise carbon taxes as potentially corrosive to moral motivation. Their key theoretical move is to define what they call *environmental responsibility* as inversely related to the level of taxation. The higher the tax, the more responsibility is outsourced to the fiscal mechanism, and the less individuals feel personally compelled to act. In this framework, carbon taxation does not bolster *environmental responsibility*; it crowds it out.

In this section, I first revisit their model as a conceptual point of departure for reassessing the normative limits of carbon taxation. Then I question their definition of environmental responsibility, and finally extend their insights to policy implications and a broader literature survey.

## 2.1 A Model of Carbon Tax with Responsible Agents

The central claim in Bazin et al. (2004) is that formulating a carbon price and thereby internalising an ex-ternality may only be effective up to a certain threshold, beyond which taxation becomes counter-productive, encouraging rather than restraining consumption. This result stems from what they identify as a major blind spot in the Pigouvian logic: the failure to distinguish between responsible behaviour, grounded in ethical or normative motivations, and behaviours towards taxation, driven by the structure of fiscal and political incentives (Bazin et al., 2004, p.129). The interplay between consumption and environmental responsibility is embedded in their intertemporal consumption function:

$$C_{t+1} = [1 - \alpha(m_{t+1})](1 + r_{t+1} - \delta)s_t$$

where $s_t$ is savings at time $t$, $r_{t+1}$ the interest rate, and $\delta$ the capital depreciation rate. Here, consumption in the next period is amplified not only by savings and return on capital, but also by a decline in the agent's sense of responsibility. The higher the tax, the lower $\alpha$, and the greater the incentive to consume. Bazin et al.'s model introduces a critical innovation in the economics of carbon taxation: a formal account of how fiscal instruments may undermine moral agency. They propose a stylised function, $\alpha(m_t)$, representing individual environmental responsibility as inversely related to the level of taxation. When taxes are low, individuals are assumed to take personal responsibility for their ecological impact; when taxes are high, this responsibility is effectively delegated to market feedback, and self-restraint erodes. Formally, responsibility $\alpha(m_t)$ is defined on the interval $]0, 1[$ and declines monotonically with the tax rate $m_t$, with diminishing marginal effects ($\alpha''(m_t) > 0$). This means that while moderate taxation may complement voluntary restraint, excessive taxation risks triggering a shift (i.e. a crowding out effect) in behaviour from ethical commitments to a mere regulatory compliance. In other words, while taxes directly reduce environmental degradation by discouraging consumption, they may also indirectly increase it by eroding self-imposed behavioural limits. In this framework, responsibility is not enhanced by carbon pricing mechanisms; rather, it is displaced by it. This
produces an incongruity: a policy meant to reduce consumption may, above a certain threshold, rationalise it.<fnref n="5" /> They formalise this dynamic in their environmental quality equation, which combines a positive technical effect of taxation (via depollution capacity) and a negative behavioural effect (via the erosion of responsibility, $\alpha'(m)$). In other words, if the technical (positive) effect outweighs the behavioural (negative) effect, environmental quality improves. However, if the magnitude of the behavioural response is too large, then the net effect becomes negative, and the tax worsens environmental quality, meaning that agents over-consume. When the magnitude of the latter outweighs the former, the net environmental effect of the tax becomes negative.

Rather than supporting carbon taxes as ethically neutral market corrections, Bazin et al. show that taxation implicitly frames individual moral agency. As they put it: "Since I pay, I am permitted to consume" (Bazin et al., 2004, p.131). As such, the tax becomes a moral absolution rather than a deterrent. However, the model falls short of offering a way back: while it demonstrates how responsibility is eroded, it does not consider how it could be restored or enhanced by reducing carbon taxes. In other words, while environmental responsibility may be crowded out by taxation, it remains unclear whether – or how – it would automatically be restored following a tax decrease. Essentially, in treating responsibility as a passive function of policy design, rather than a reflexive ethical process, the model invites further development, particularly from philosophical and behavioural perspectives. By highlighting the tension between institutional delegation and personal commitment, Bazin et al. offer a sharp challenge to the Pigouvian paradigm. They reveal that price signals not only steer behaviours, but also reconfigure responsibility itself. This paves the way for a closer examination of whether more nuanced policy frameworks can preserve or even strengthen ethical engagement rather than displacing it.

## 2.2 Environmental Responsibility of What?

From a normative perspective, rather than interpreting Bazin et al.'s model as a conceptualisation of 'environmental responsibility' *per se*, I argue that it reveals a more troubling dynamic: taxing carbon emissions can serve as a moral *caution* or license to pollute. That is, rather than substituting responsibility, the carbon tax appears to grant the economic agent a normative *carte blanche*, i.e. an implicit permission – an *insouciance* – to continue polluting, so long as the externality is paid for.<fnref n="6" /> To conceptualise this dynamic, I draw on William James' notion of a *moral holiday* (James, 2011, p.135), defined as the attitude of "letting the world wag in its own way, feeling that its issues are in better hands than ours and are none of our business." In the context of Bazin et al. (2004)'s model, carbon taxation may produce a similar effect: it invites the

<footnote n="5">⁵By 'rationalise', I argue that this approach reconfigures the problem within an optimisation framework, in which the goal shifts from reducing carbon emissions *per se* to identify an economically efficient –or optimal– level of pollution.</footnote>

<footnote n="6">⁶Conceiving Bazin et al.'s model as a conceptualisation of a normative *insouciance* (rather than a stable account of environmental responsibility) counters the assumption that lowering taxes would be sufficient to reactivate moral restraint.</footnote>
agent to “drop the worry of our finite responsibility” (James, 2011, p.135), trusting that the market has assumed the moral burden of their emissions. In this framing, the carbon tax is not merely a price signal; it functions as a mechanism of moral displacement. By giving the impression that the negative externality of one’s consumption is fully internalised through the market, the agent experiences a form of normative acquittal. They are no longer required to deliberate on the ethical consequences of their actions, only to comply with a priced constraint.

This analysis exposes a deeper limitation in Bazin et al. (2004)'s approach. While their model innovatively introduces a behavioural response to taxation, it reduces individual responsibility to a continuous variable inversely correlated with tax level. Though the authors cite philosophical work, notably Jonas (2013), they stop short of engaging with the ethical stakes of how responsibility is conceived and enacted. If environmental responsibility is modelled as a variable manipulated by taxation, then moral agency is effectively eroded: responsibility becomes something that agents comply with through prices, rather than something they take on themselves. Distinguishing between being *held responsible* and *taking responsibility* is critical for designing climate policies that foster commitment rather than commodifying it.

## 2.3 Policy Implications: Moral Licensing and the Limits of Price-Based Responsibility

One of the most thought-provoking insights from Bazin et al. (2004) is the claim that taxation may not only fail to bolster environmental responsibility but may actively erode it. By formalising individual responsibility as inversely correlated with tax level, their model echoes what behavioural literature would describe as *moral licensing*: the process by which individuals feel morally absolved after undertaking a pro-social action, thereby permitting themselves to act less virtuously thereafter.<fnref n="7" /> As such, Bazin et al.'s results resonate with a broader literature.

Prior virtuous acts have been shown to grant individuals a form of moral credit, which can weaken subsequent ethical restraint has been widely studied in social psychology and behavioural economics (Monin and Miller, 2001; Thøgersen and Ölander, 2003; Mazar and Zhong, 2010; Truelove et al., 2014) and usually refers to a negative spill-over from a previous righteous deed to an unrighteous one. From the consumer's perspective, Khan and Dhar (2006) demonstrate how prosocial cues increase indulgent consumption, while Merritt et al. (2010) show that licensing is often tied to the alleviation of guilt, rather than to changes in moral reasoning. More broadly, Gholamzadehmir et al. (2019) introduce the concept of *moral cleansing* to describe how individuals attempt to sustain a self-conception of moral worth, often through compensatory

<footnote n="7">⁷Such a process is also called “positive/negative spill-overs” in the literature.</footnote>
behaviours. These dynamics are sector-specific: as shown by Burger et al. (2022), abstaining from air travel
may license increased meat consumption. A comprehensive meta-analysis by Blanken et al. (2015) confirms
the general robustness of moral licensing effects across settings. These findings resonate with earlier critiques
in political economy. For instance, Frey (1994) argues that rewards and sanctions may crowd out intrinsic
motivation, particularly when individuals perceive them as external impositions.<fnref n="8" /> Similarly, Hilton et al.
(2014) show that carbon taxes can undermine behavioural intentions when framed without reference to in-
trinsic values or collective goals. The broader policy implication is clear: pricing mechanisms can produce
unintended ethical spillovers. When taxes are interpreted not as signals for restraint but as licences for harm,
they risk turning responsibility into a commodity, something discharged at the point of payment rather than
sustained through ethical deliberation. From a methodological perspective, the Bazin et al. model reveals a
deeper flaw in the Pigouvian logic: responsibility is treated not as a moral reflection, but as a parameter to
optimise. From an ethical perspective, this approach reduces responsibility to behavioural compliance, which
disconnects it from the ethical self-understanding that policy should aim to promote. Meijers et al. (2019)
explore this in an environmental context, finding that green labels can backfire, particularly for individuals
with strong environmental identities.

This diagnosis aligns with more recent findings by Hartmann et al. (2023) who show, through behavioural experimentations, how the framing of carbon taxes affects moral perception. Where Bazin et al. model responsibility as being eroded by tax intensity, Hartmann et al. demonstrate how it can be reshaped by the way taxation is presented. Both approaches converge on a common insight: that fiscal instruments do not merely constrain behaviour, they co-construct the moral meanings through which agents interpret their climate actions.

3 Tax Salience Launders Responsibility

Carbon taxation is often assumed to work through salience: the clearer the price signal, the more likely
individuals are to respond. However, Hartmann et al. (2023) challenge this assumption, showing that when
carbon taxes are made morally explicit, they can paradoxically undermine the very behaviours they intend to
encourage. Their behavioural evidence reshapes the debate on tax design by suggesting that tax saliency may
displace responsibility rather than reinforce it. In this section, I delve into the framing effects of carbon taxes
and their implicit alleviation of individual responsibility. Not only do Hartmann et al. (2023)'s surveys offer
strong empirical evidence towards moral licensing; it also empirically grounds Bazin et al's results: carbon
tax may serve as a tool to enhance one's moral self image and thus a license to pollute.

<footnote n="8">⁸For further references on Motivation crowding theory, one can see Frey and Jegen (2001) who argue that monetary mechanisms (such as taxes) can undermine or bolster intrinsic motivation. For further references on intrinsic and extrinsic motivations one can see Bénabou and Tirole (2003, 2006).</footnote>
## 3.1 Moral Salience as a Behavioural Risk in Carbon Tax Design

The effectiveness of carbon taxation is usually considered in terms of price signalling: it is assumed that by supporting the cost of externalities, a tax will encourage consumers to make less carbon-intensive choices. However, this standard Pigouvian logic assumes that increasing the visibility of a tax (i.e. its salience) should necessarily enhance its behavioural impact. Hartmann et al. (2023) directly challenge this assumption. Drawing on behavioural and moral psychology, they argue that when a carbon tax is made morally salient, that is, whenever it is explicitly framed as a climate-related measure, it may provoke a counterintuitive response: rather than reducing demand, it may trigger a form of moral licensing. In establishing their framework, they define moral licensing as a process in which the individual gains more “confidence for morally questionable actions” (p.1), increases their “moral self-concept” (p.6), or reduces “consumer’s guilt concerning their carbon footprint” (p.10). Therefore, they question whether the saliency in the design of carbon taxes may implicitly play a role in alleviating individual responsibility by acting as a proxy for moral credence. Consumers who pay a salient carbon tax are more likely to see themselves as having fulfilled their moral obligation, and therefore less likely to adjust their consumption accordingly. In this context, moral salience functions as a source of moral reassurance rather than as a deterrent. To investigate this behavioural risk, Hartmann et al. (2023) conducted a series of survey experiments across representative U.S. samples. Participants were asked to indicate their willingness to purchase various products, each priced either with a salient carbon tax or a hidden one (framed as a general price increase). The results suggest that salient carbon taxes are consistently less effective in reducing demand than their hidden counterparts, particularly among participants with strong environmental concern and progressive political views.

Crucially, the study reveals that the effectiveness of carbon taxation depends not only on price elasticity, but also on how individuals morally interpret their actions in response. Those already committed to ecological values are, paradoxically, the most susceptible to moral licensing effects under salient tax regimes. This finding raises a key design question: can carbon pricing sustain moral engagement, or does its salience risk converting climate action into a mere transaction? In reframing this question, Hartmann et al. (2023) contribute more than an empirical nuance to behavioural economics: they expose a normative tension at the heart of market-based environmental policy. If individuals come to equate payment with moral discharge, the carbon tax may not simply underperform; it may actively undermine the sense of personal responsibility that long-term climate mitigation demands.

## 3.2 The Moral Licensing Evidence from Experience

The findings of Hartmann et al. (2023) offer a striking behavioural counterpoint to standard assumptions about carbon tax efficiency. Across four experimental studies, they show that when a carbon tax is made
salient (i.e. when it is explicitly framed as such at the point of purchase) it consistently fails to reduce demand. Worse, it even increases it. Figure 1 illustrates this pattern across the four studies, with purchase intentions higher under salient carbon taxes than under hidden ones, despite equivalent price signals (a 15% tax).

<figure><img src="image_2.png" /><figcaption>Fig. 1. Purchase intention by experimental group. P values in Study 1 correspond to the t-test comparing the hidden vs salient carbon tax groups. Error bars represent 95% confidence intervals.</figcaption></figure>

Figure 1: Purchase intention with hidden vs salient carbon taxes from: Hartmann et al. (2023, p.4).

These results reveal a behavioural vulnerability in the design of carbon taxes: highlighting the environmental purpose of the tax can paradoxically give consumers a sense of moral licence. Rather than feeling compelled to change their behaviour, individuals seem to interpret the tax as a kind of moral credit. Most strikingly, this is particularly evident among participants who are more environmentally conscious, suggesting that those who feel most responsible for the environment may also be most susceptible to the licensing effect.

The robustness of their results was tested in three subsequent studies, each involving slight changes. The second study directly tests this mechanism by introducing a “moral self-concept” variable, capturing how virtuous participants feel after making a purchase. In the presence of a salient carbon tax, respondents reported significantly higher moral self-regard—even when their actual behaviour (i.e. their purchase decision) remained unchanged or became more environmentally harmful. Studies 3 and 4 reinforce the robustness of this finding: neither higher tax rates (5% vs. 15%) nor the addition of carbon labelling mitigated the licensing effect.

Taken together, these results pose a direct challenge to Pigouvian logic. If the visibility of a tax can displace moral motivation rather than enhance it, then the instrumental rationality assumed by traditional models may be insufficient to capture real-world behavioural responses. Worse, the policies that aim to align self-interest with environmental goals may, in practice, erode the very moral framing upon which long-term behavioural change depends. This empirical evidence supports a broader theoretical concern: that when carbon pricing relies too heavily on salience, it risks crowding out the ethical dimensions of responsibility
and replacing them with transactional self-permission. The policy implication is clear: effective carbon taxes must be designed not only for efficiency, but for psychological and moral coherence. In other words, if agents are licensed to pollute by the very tools meant to curb emissions, then policy design must turn to more than prices and question its moral underpinnings.

## 3.3 Policy Implications: Designing Taxes Without Undermining Responsibility

The policy implications of Hartmann et al. (2023) are both unsettling and instructive. Contrary to standard expectations, increasing the salience of carbon taxes, by framing them explicitly as climate-related, may diminish their effectiveness. Their internal meta-analysis, shown in Figure 2, confirms this behavioural pattern across all four studies: products with a salient carbon tax consistently trigger higher purchase intentions than those with a hidden one, despite identical price increases.

<table><caption>Purchase intention (PI) means and mean differences (ΔPI) across studies and conditions.</caption><thead><tr><th>Study</th><th>PI hidden tax</th><th>PI salient tax</th><th>ΔPI</th><th>P-value</th><th>Cohen's d</th></tr></thead><tbody><tr><td>Study 1</td><td>2.55 (2.44, 2.66)</td><td>2.85 (2.73, 2.98)</td><td>0.31 (0.14, 0.47)</td><td>&lt;0.001</td><td>0.23 (0.10, 0.35)</td></tr><tr><td>Study 2</td><td>2.70 (2.55, 2.85)</td><td>3.05 (2.89, 3.21)</td><td>0.35 (0.11, 0.57)</td><td>&lt;0.001</td><td>0.25 (0.09, 0.42)</td></tr><tr><td>Study 3</td><td>2.68 (2.59, 2.78)</td><td>3.34 (3.24, 3.43)</td><td>0.66 (0.52, 0.79)</td><td>&lt;0.001</td><td>0.48 (0.38, 0.58)</td></tr><tr><td>Study 4</td><td>2.53 (2.42, 2.63)</td><td>2.86 (2.75, 2.96)</td><td>0.33 (0.18, 0.48)</td><td>&lt;0.001</td><td>0.25 (0.14, 0.36)</td></tr></tbody></table>

Note. P-values test for the difference between hidden and salient carbon tax experimental groups. Effects size (Cohen's d) provides a standardized metric of the magnitude of differences between conditions. 95% confidence intervals are provided in parentheses. Results were computed controlling for different products.

Figure 2: Meta-analysis of the four studies reported in Hartmann et al. (2023, p.9). Salient carbon taxes consistently yielded higher purchase intention than hidden taxes.

This finding redefines the normative role of tax salience in environmental economics. While traditional economic theory assumes that more visible price signals steer behaviour that aligns with social goals, Hartmann et al. (2023) show that salience can instead distort one's perception of responsibility. When agents feel that they have *done their part* simply by paying the tax, they may be licensed to emit more, particularly if they already identify as environmentally conscious. Thus, salience does not only fail to increase tax efficacy but also actively distorts the moral landscape in which climate choices are made.

These results resonate with broader findings in behavioural economics and psychology. For instance,
Chetty et al. (2009) and Gabaix and Laibson (2006) analyse the impact of salience of commodity taxation on behaviours, arguing in favour of “shrouded attributes”, i.e. consumers often under-react to non-salient taxes. However, Hartmann et al. (2023) reveal the opposite danger: consumers overreact in the wrong direction when taxes are too morally explicit. Similar dynamics are observed by Nakano and Yamagishi (2021) in Japan and Rivers and Schaufele (2015) in North America, who show that sectoral variation and agent perception mediate the success of carbon pricing. In addition, work in environmental psychology reinforces the idea that climate policy cannot rely on instrumental incentives alone. Maestre-Andrés et al. (2019) show that individuals’ beliefs about fairness, impact, and moral identity significantly shape the acceptability and efficacy of carbon taxes. In particular, if revenue use is perceived as fair (e.g., directed toward environmental projects rather than redistribution) support tends to increase. Taken altogether, these findings converge on a crucial lesson: carbon pricing must be understood not only as an economic signal, but as a moral and behavioural intervention. The framing of a tax is never neutral; it co-produces the very behaviours and self-conceptions it seeks to influence. A policy that signals virtue through payment risks shifting responsibility away from the individuals involved, turning climate action into a priced transaction. For environmental taxes to support lasting behavioural change, they must do more than send efficient signals; they must also preserve the moral agency of those they target. This raises broader questions explored in the next section: can responsibility be fostered without being reduced to a price mechanism? What kind of ecological agency should policy aim to cultivate?

# 4 Socially Responsible Consumers and Carbon Taxes

How do responsible consumers act and what are their impact in a competitive equilibrium setting? In a further challenge to the standard Pigouvian framework, Kaufmann et al. (2024) shift the focus from price incentives to the structural constraints of market equilibria. Their work introduces a novel conceptual and analytical lens: the figure of the ‘socially responsible consumer’, defined as an agent willing to modify their consumption to mitigate the externalities it generates (Kaufmann et al., 2024, pp.1997–1998). This move enables them to ask a deceptively simple but normatively charged question: can individual moral restraints (i.e., what Bazin et al. (2004) called environmental responsibility) result in collective environmental benefits in competitive markets? To answer this question, the authors develop a general equilibrium model in which socially responsible consumers are fully aware of their impact. They also conduct a behavioural survey investigating beliefs about the effectiveness of individual consumption choices. Their central finding is that responsible consumption can systematically dampen social optima by distorting price signals and unintentionally encouraging overconsumption by others. Such a result poses a serious dilemma for market-based
environmental policy. This contribution complements and extends previous critiques by Bazin et al. (2004) and Hartmann et al. (2023), not by emphasising psychological or normative dissonance, but by illuminating the structural dynamics through which well-intentioned behaviour may backfire under standard market conditions. The section that follows critically reconstructs their framework and assesses its implications for the design of responsibility-sensitive climate policy.

## 4.1 Dampening Effects and Competitive Equilibrium

Kaufmann et al. develop a general equilibrium framework that foregrounds a neglected dimension in standard Pigouvian reasoning: the endogenous response of market prices to individual responsible behaviours. Their key insight is that socially responsible consumers (i.e. individuals who reduce their consumption in response to the harm it causes) may unintentionally trigger systemic interactions that negate the very effects they intend to achieve. In their model, a reduction in demand for a polluting product lowers its price, which can encourage others to consume more. Similarly, a willingness to pay a premium for a cleaner product increases its price, which discourages further uptake. Consequently, even when agents act with full information and sincere environmental concern, their moral efforts are partially offset by market dynamics. Kaufmann et al. label this phenomenon the *dampening effect*, and demonstrate that it results in overconsumption compared to the social optimum, even in markets consisting of ethically motivated agents. This result challenges the assumption, implicit in many Pigouvian models, that internalising externalities at the individual level suffices to generate socially desirable outcomes. Instead, Kaufmann et al. demonstrate that moral motivation is not enough: the institutional structure of the market can systematically erode its effectiveness. By formalising how price mechanisms redistribute the effects of individual restraint, they shift the focus from behavioural failure to equilibrium failure, offering a powerful critique of the belief that markets and morality are naturally aligned.

## 4.2 A New Type of Market Failures

The core insight of Kaufmann et al.'s model is as striking as it is counterintuitive: even when consumers fully internalise the externalities of their choices, competitive markets may still generate socially suboptimal outcomes. As they put it, “when each person's consumption contributes to an externality she does care about, markets still perform poorly” (Kaufmann et al., 2024, p.2003). In contrast to Pigouvian logic, which assumes that individual internalisation leads to collective optimality, their framework demonstrates that responsibility, when filtered through price mechanisms, can be structurally undermined.

The model is formally built on a four-part equilibrium structure. Consumers maximise utility over goods that generate externalities, producers respond to aggregate demand via an upward-sloping supply curve, and
individual agents form beliefs about how their own consumption influences market outcomes. Equilibrium is reached when these beliefs are consistent with systemic responses. However, even when consumers attach private costs equal to the external harms of their consumption, dampening through price adjustments prevents the first-best outcome from being achieved. This result holds especially in multi-good economies, where shifting demand from one good to another introduces cross-price effects. The responsible consumer becomes entangled in a system where their own restraint triggers offsetting behaviour in others. What emerges is a new type of market failure: not one caused by ignorance or selfishness, but by the endogenous redistribution of moral effort through prices. Thus, Kaufmann et al. (2024) provide a decisive theoretical result: they demonstrate that even ethically motivated behaviour is insufficient if policy fails to prevent moral effort from being neutralised at the systemic level.

## 4.3 Responsibility of What? Reassessing the Moral Agent in Strategic Models

One of the most conceptually revealing limitations of Kaufmann et al. (2024) lies in their constricted definition of the “socially responsible consumer.” Despite positioning their model as an exploration of moral agency in competitive markets with externalities, responsibility is ultimately reduced to a technical function: the rational anticipation of one’s marginal impact on aggregate outcomes. Their socially responsible agent is one who internalises the externality at stake, not as a moral imperative, but as a strategic adjustment in utility calculation. In short, responsibility becomes indistinguishable from a slightly enhanced definition of self-interest. This thin conception is made explicit in their formal framework, where moral concern is modelled as a modified preference structure within a Nash equilibrium logic. The “responsible” consumer is a Nash optimiser, they still remain a consequentialist and optimising unit with a pro-environmental parameter. What is notably absent is any account of the ethical substance or motivational grounding of that responsibility. As a result, moral agency is collapsed into outcome-sensitivity, with no regard for the process by which agents deliberate, reflect, or come to identify with climate goals. This limitation is well illustrated by Sen (2000, p.491), who distinguishes between “culmination outcomes” and “comprehensive outcomes.” While the former considers only the final result of an action, the latter includes the processes, principles, and commitments that may inform one’s choice. Kaufmann et al. (2024) operate squarely within the former category (culmination outcomes): their responsible agents care about outcomes, but not about how or why they come to care. In doing so, they omit what is arguably the core of moral responsibility, i.e. its procedural and normative dimension. What matters is not only whether the agent anticipates their impact correctly, but whether they regard themselves as the kind of person for whom acting responsibly matters, regardless of the effectiveness of their individual actions.

This omission does not invalidate their technical findings, which remain significant for understanding equilibrium effects in markets with strategic externalities. However, it does circumscribe their normative
scope. Responsibility, in their model, is not deliberated, fostered, or institutionally mediated, it is simply assumed as a behavioural trait, measurable in terms of belief accuracy. Such an assumption fails to engage with the richer ethical and behavioural literature on how moral identities are formed, how values shift in response to institutions, or how norms evolve in political communities (Bowles, 1998, 2016; Mattauch and Hepburn, 2016; Dasgupta et al., 2016; Ulph and Ulph, 2021). What is needed is not simply a more accurate model of responsible consumers if they are just slightly altered optimisers, but a deeper theorisation of what it means to act responsibly in a climate-constrained world.

## 4.4 Policy Implications

The dampening effect identified by Kaufmann et al. (2024) has direct and significant implications for the design of climate policy instruments. If moral motivation is systematically diluted by market feedback, then carbon taxes and quantity caps, however well calibrated, must be evaluated not only for their incentive effects but also for their potential to preserve the moral and behavioural agency of economic agents. Kaufmann et al. (2024) show that unit taxes, for instance, may outperform fixed caps in attenuating dampening effects in certain market contexts (Kaufmann et al., 2024, p.2008). However, in international settings (where domestic restraint may be offset by foreign producers with higher elasticities or dirtier inputs) the calculus shifts, and caps may prove more effective (Kaufmann et al., 2024, p.2010). Their model thus highlights the geopolitical complexity of assigning responsibility in open economies, where policy instruments interact not only with incentives but with global supply structures.

These findings echo a broader literature concerned with the behavioural and institutional foundations of effective environmental policy. For example, Farhi and Gabaix (2020) propose a model of optimal taxation for behavioural agents – individuals whose actions are influenced by incentives, framing and cognitive bias, and who are, thus, susceptible to nudging. Similarly, Hilton et al. (2014) show that public responsiveness to carbon pricing is strongly mediated by perceived legitimacy and trust in governing institutions. Savin et al. (2020) examine how fairness perceptions affect the political acceptability of climate taxes in Spain, while Giesler and Veresiu (2014) offer a sociological perspective, arguing that responsible consumption emerges not from individual calculation but from what they call “moralistic governance regimes”: institutional contexts that shape consumer subjectivity itself. Taken together, the works of Bazin et al. (2004), Hartmann et al. (2023), and Kaufmann et al. (2024) converge on a common insight: that carbon pricing is never a neutral act of internalisation, but a framing device that interacts with agents’ self-understanding, norms, and beliefs. Whether through crowding out, moral licensing, or dampening, each model challenges the assumption that preferences are stable and exogenous. Instead, they suggest that preferences – and by extension, responsibility – are shaped by the very policies meant to respond to them. It is precisely this insight that animates the work of Mattauch et al. (2022), who move beyond these critiques by endogenising preferences within a formal
model of carbon taxation. In their framework, responsibility is not crowded out by policy, but co-evolves with it. This shift, from seeing preferences as fixed sets to viewing them as policy-responsive variables, marks a normative reorientation: one in which climate policy is not only about correcting market failures, but about cultivating the ethical conditions under which low-carbon futures become possible.

# 5 Carbon Taxes with Endogenous Preferences

Lastly, encompassing and expanding on these critiques, Mattauch et al. (2022) offer a decisive challenge to the standard Pigouvian logic by modelling preferences as endogenous, that is, shaped, over time, by the policy itself. Their contribution is not only technical but conceptual: they propose that carbon taxation should be evaluated not merely as an incentive mechanism but as a comprehensive tool co-evolving with the environmental behaviours it steers. In doing so, they reposition public policy as a co-producer of ecological norms, rather than a passive corrector of market failure. Their model thus reconciles, at least partially, the tension highlighted by Bazin et al. (2004) between fiscal instruments and moral responsibility. Whereas Bazin et al. treat responsibility as crowded out by taxation, Mattauch et al. ask how policy might crowd it in by shifting people's preferences rather than substituting for them. Although they do not explicitly theorise responsibility, their framework allows for its emergence via the dynamic adaptation of tastes, beliefs, and behavioural norms in response to climate policy.

## 5.1 Modelling Carbon Taxation When Preferences Are Adaptable

The central ambition of Mattauch et al. (2022) is to challenge the assumption that preferences are fixed inputs to economic analysis and to question their climate policy implications. Standard models of carbon taxation rely on a static conception of agents' values, treating them as stable determinants of demand. Yet, as Mattauch et al. (2022) argue, preferences are themselves shaped (intentionally or not) by the policies designed to act upon them. Therefore, their model seeks to incorporate preference formation within a general framework of carbon taxation. This shift in modelling perspective has significant normative and policy implications. This shift in modelling perspective has significant normative and policy implications. This recognises that individuals' choices depend, in part, on what they value. Rather than viewing preference change as a cognitive bias or market failure, it reframes it as a legitimate object of public policy. When fiscal instruments and regulatory design influence the values and habits of citizens, these feedback loops must be recognised as part of the intended or foreseeable consequences of the policy.

To ground their argument, they examine three empirical domains in which preferences demonstrably adapt to institutional context: first, how carbon pricing can reinforce low-carbon consumption norms; second, how
urban infrastructure influences mobility preferences; and third, how public health interventions shape dietary choices. In each case, preferences are shown to be responsive to structural conditions, not just price signals. This undermines the standard view that policy must work *around* preferences; instead, it suggests that the policy *shapes* the very terrain on which decisions are made. In modelling terms, this opens the door to a richer understanding of policy effectiveness, including not only elasticity of demand but also the adaptability of values. A carbon tax that shifts preferences toward sustainable practices may require a lower rate to achieve the same long-run impact, while a tax that alienates or demoralises may need to be steeper to overcome behavioural resistance. The implication is clear: economic efficiency cannot be separated from the ethics of policy design. How preferences are formed, sustained, or eroded must be treated as a core feature of environmental policy analysis, not as an afterthought.

## 5.2 A Second-Best Tax with Behavioural Insights

Standard models treat the optimal tax as a function of fixed preferences and known externalities. But when values themselves shift in response to policy, the optimal tax rate must adjust accordingly. In this dynamic framework, carbon taxation is not merely a means of encouraging behavioural change; it becomes a tool that shapes the way preferences are formed over time. Their core result is conceptually compelling: the optimal level of a carbon tax depends on whether it crowds in or crowds out pro-environmental preferences. If taxation strengthens an individual's appreciation of clean consumption through norm reinforcement, moral salience or infrastructural feedback, then lower tax rates may suffice to achieve climate targets. Conversely, if it induces resentment, disengagement or moral licensing, higher rates are required to counterbalance behavioural resistance. In both cases, the tax is no longer a static parameter that optimises marginal damage; rather, it is an integral component within an evolving system of norms, behaviours, and policy instruments.

Assuming that preferences co-evolve with public policy, Mattauch et al. (2022) offer a behavioural extension of the second-best carbon tax. Specifically, the authors introduce an “appreciation parameter” $\alpha(\tau)$ into the utility function, which captures the weight an agent assigns to clean goods. This parameter is influenced endogenously by climate policies, particularly through the carbon tax $\tau$, and reflects the evolving normative commitment to sustainable choices. Three key conclusions follow: (1) when preferences are endogenous, the second-best tax diverges from the Pigouvian optimum; (2) crowding-in of environmental appreciation allows for a lower tax to achieve the same environmental outcome; (3) there exists a unique level of behavioural responsiveness for which the second-best tax converges with the first-best (Pigouvian) level (Mattauch et al., 2022, p.9).

This insight reframes taxation as a normative cue as much as an economic tool. This suggests a change in
environmental economics: the normative underpinnings of preferences are now active elements in the success or failure of climate policies, rather than passive inputs. Far from being neutral, the act of pricing carbon emissions becomes a formative intervention into how individuals understand their role in climate mitigation. As such, the design of climate policy must be evaluated not only in terms of efficiency or cost-effectiveness, but in its capacity to bolster durable norms of responsibility and collective climate actions. Their broader conclusion is that policy must be assessed not only by its efficiency, but by its capacity to generate stable ecological norms.

## 5.3 Policy Implications: From Incentives to Normative Feedback

This model has implications that extend beyond the design of policy tools. It challenges core assumptions about rational behaviour, optimisation and the neutrality of market-based interventions. As Bowles (1998, 2008) argues, economists often operate within a narrow Humean model of the individual—as a self-interested “knave” whose preferences are fixed and whose morality is exogenous. From this perspective, policy is limited to adjusting incentives. However, if preferences evolve alongside policies, then the design of policies and institutions becomes an ethical undertaking. This view finds further support in an earlier work of Mattauch and Hepburn (2016), who argue that preference change should be viewed not as a behavioural anomaly but as a desirable outcome of climate policy. Preferences may shift slowly, but they can amplify the effectiveness and legitimacy of otherwise unpopular instruments. A policy rejected *ex ante* may gain acceptance *ex post* as citizens adjust their values and expectations. Similarly, O’Hara and Stagl (2002) observe in the context of community-supported agriculture that agents often enter such schemes for pragmatic reasons (*e.g.* over health concerns), but later develop new ethical and prosocial preferences (*e.g.* supporting local ecosystems). For policymakers, designing effective taxes involves more than setting the right tax rate; it also requires anticipating the social and normative feedback that taxation generates. In this context, Mattauch et al. (2022) shift the focus from instrument optimisation to a broader question: what kind of economic agents is a given policy trying to shape?

This question leads directly to the final section of the article. If pricing carbon shapes responsibility, the task is not only to design efficient instruments, but also to consider the types of responsibility that these instruments presuppose and encourage. The next section builds on this insight by distinguishing two conceptions of environmental responsibility: one that reflects behavioural compliance (“*accordant responsibility*”), and one that stems from rational moral commitment (“*procedural responsibility*”). Together, these conceptions offer competing visions of what it means to act responsibly in the context of a climate crisis.
# 6 What Responsibility?

Taken together, these four arguments converge into one main argument: carbon taxes may undermine the moral responsibility required for long-term collective environmental action. This highlights the need for a more in-depth examination of the concept of responsibility involved. I propose a distinction between two conceptions. First, what I term *accordant responsibility*, which refers to behavioural compliance with policy goals, often shaped by incentives or social norms. Second, *procedural responsibility*, which involves moral deliberation, normative awareness, and the autonomous adoption of ecological commitments. This distinction is not merely semantic; it has concrete implications for how carbon pricing instruments are framed, justified, and received by economic agents.

## 6.1 Working with Individual Responsibility through Incentives: an *Accordant Responsibility*

In the context of global warming, the scope of climate policies extends beyond reallocating resources efficiently to transforming the very values and habits that drive consumption. The literature on endogenous preferences responds by demonstrating that individuals do adapt their tastes over time in response to policy, infrastructure, and evolving social norms. This dynamic has been captured in a growing corpus of work (von Weizsäcker, 1971, 2005; Gintis, 1974; O'Hara and Stagl, 2002; Daube and Ulph, 2016; van den Bijgaart, 2018; Mattauch et al., 2022). Under environmental constraints, agents revise their preferences to lower their carbon footprints, revealing that responsibility can be understood as a dynamic process of accordance with policy goals.

Yet this conceptualisation of individual responsibility sustains the same critical tension: although preferences evolve, responsibility remains anchored to fiscal and political incentives. The result is that the onus is put on policymakers to ensure accountability, rather than on the agents themselves to act ethically. Carbon taxes and other price-based instruments thus operate principally as signals of social cost and as levers for preference formation. In the second-best analysis of Mattauch et al. (2022), for example, policy-induced “crowding-in” of environmental appreciation actually reduces the optimal tax rate, since individuals become more intrinsically motivated. Paradoxically, as agents grow more committed, less external incentive is required. Whether motivation is explicit or the product of subtle nudges, the economist’s task remains confined to adjusting price signals, not cultivating the agent’s ethical self-understanding.

I label this conceptualisation *accordant responsibility*, i.e. compliance driven by external incentives rather than by autonomous judgment (and, thus, being subject to nudges as in Giesler and Veresiu (2014); Farhi and Gabaix (2020)). While it acknowledges behavioural complexity, accordant responsibility still operates within
the Pigouvian logic of internalising externalities via taxation. It seeks to adapt our policy tools to account for
the morally complex interplay between endogenous preferences and carbon taxes. Yet, it creates a structural
gap between the efficiency goals of price-based instruments and the deeper aim of fostering genuine ecological
commitment. In the next section, I turn to an alternative conception—*procedural responsibility*—which shifts
the focus from adaptive preferences to the processes through which individuals come to deliberate and embrace
their environmental obligations. In a similar spirit, Hukkinen (2016); DesRoches et al. (2023) contend that
“green nudges” are ethically justified only when the environmental benefits achieved exceed the normative
costs imposed by the intervention. The analysis in Mattauch et al. (2022) highlights that, even when judged
by conventional normative benchmarks (such as Paretian optimality and Pigouvian internalisation) effective
climate policy must integrate individual responsibility to achieve collective optima. For a policy-maker, from
a normative perspective, working with *accordant* responsibility is

* Instrumentally valuable: it accounts for moral agency without compromising large-scale – yet short term – policy tools, such as carbon taxation.

* Politically valuable: compromising moral agency with climate goals is the most cost-efficient approach, as demonstrated by green nudges.

* Yet there may be miscalibrations with imperfect knowledge in behavioural responses from the individuals, the level of taxation or of nudges may not be perfectly optimal.

6.2 Shifting the Paradigm: Developing the Moral Sense of Rational Agents

The preceding models – whether focused on crowding-out, moral licensing, or dampening effects – share a common assumption: responsibility is either shaped by or subordinated to policy instruments. In contrast, this final perspective reorients the discussion by treating environmental responsibility not as a behavioural reaction, but as a normative commitment. This is what I term *procedural responsibility*: a conception of responsibility grounded in ethical reflection, formed through deliberation, and exercised independently of material incentives or sanctions. This approach draws on a long-standing critique of Rational Choice Theory (RCT), most notably articulated by Amartya Sen.

Sen argues that equating rationality solely with preference maximisation overlooks a crucial dimension of human motivation: the agency to commit to moral or social principles that may conflict with self-interest or yield a lower level of personal welfare (Sen, 1973, 1977, 1985, 2005). In his account, rational agents often act upon a broader array of motivations and may recognise a sense of duty or commitment to a particular issue (such as fighting against injustice, for instance, or sustaining a form of environmental responsibility). The main argument of Sen's account of commitments is the dissociation of personal choice with personal
welfare (Sen, 1977, p.329). Rather than being rational fools, committed agents are individuals whose moral deliberations lead them to constrain their consumption, not in response to a monetary incentive, but because they deem it the right thing to do. To meaningfully extend the normative foundations of rational choice, we must consider economic agents not as rational fools, but as units capable of moral agency.

This shift has profound implications for climate policy. From a procedural perspective, environmental responsibility cannot be reduced to adaptive alignment with price signals; it must also account for the agent's capacity for self-imposed ethical commitments. One may choose to reduce their ecological footprint not because it coincides with their self-interest, but because they judge it to be ethically meaningful, even when their marginal impact is negligible (Guigourez, 2025). In a collective action framework, as Combet and Pottier (2024) show, the failure of France's carbon tax was not just based on economic factors, but also on normative grounds: it lacked legitimacy because it failed to embed citizens within a shared framework of collective responsibility. Their proposal for a *new ecological social contract* reclaims this deliberative foundation, who argue that climate responsibility must be institutionally enabled through participatory processes and reflective civic engagement. Such a framework acknowledges that responsibility can be cultivated collectively through deliberative and institutional arrangements (Cervesato and Guigourez, 2025). This echoes the argument made by Bowles (1998, 2008), who contend that economic models must abandon the view of individuals as fixed-interest maximisers—as “knaves”—and instead recognise that policies shape not only choices, but character.

Procedural responsibility, thus, expands the ethical foundation of climate economics. It does not reject the economic logic of incentives, but insists that such logic is incomplete. Behavioural compliance may shift consumption patterns, but only ethical commitment transforms agency. This perspective challenges purely instrumental views of climate policy and reclaims responsibility as a dynamic and deliberative dimension of rational action. Climate policy must therefore be judged not only by its efficiency, but by the kind of citizen it calls into being. At stake is not just the design of fiscal tools, but also the development of moral capacities: the ability to deliberate, commit and take responsibility in a shared yet constrained world. This conception of *procedural responsibility* has clear policy implications. If responsibility is not merely reactive but procedurally formed, then policy must attend not only to behavioural incentives but to the *normative framing* and *institutional context* in which agents deliberate and identify with climate goals. Designing carbon taxes in isolation from these ethical dynamics risks undermining the very forms of motivation that a just and durable transition requires. A procedural approach thus calls for integrating deliberative mechanisms, ethical education, and participatory governance into the fabric of climate policy. In this regard, procedural responsibility does not stand outside the economic framework, but rather extends its normative foundations.
It enriches the theoretical landscape by challenging the implicit consequentialism that underpins much of climate economics and climate policies. More than a behavioural alternative, it also constitutes a normative critique of how we conceive the economic agent, and of how economists frame the boundaries of responsibility in both the public and academic debates. For a policy-maker, working with *procedural* responsibility is:

* Instrumentally valuable: it aims to foster durable and long-term – albeit more marginal – pro-environmental behaviours as well as individuals’ moral agency.

* Intrinsically valuable: it respects the moral autonomy of economic agents while enabling new forms of collective ecological commitments.

* Yet, less immediate and cost-efficient

# 7 Conclusion

This article has interrogated the normative and behavioural underpinnings of carbon taxation through four distinct yet converging frameworks: *crowding-out*, *moral licensing*, *framing*, and *dampening* effects. While traditional economic theory considers carbon taxes to be neutral instruments that internalise externalities through price signals, our analysis has shown that these instruments frequently operate within a deeper ethical and behavioural terrain. As such, they do not only influence consumption, but they also shape (explicitly or implicitly) the very structure of individual responsibility. Through a critical reading of two carbon tax models (Bazin et al., 2004; Mattauch et al., 2022), one formal behavioural study (Hartmann et al., 2023), and a market-theoretic model of belief-sensitive responsibility (Kaufmann et al., 2024), we have illustrated how policy instruments interact with moral agency. These analyses expose a common blind spot in conventional environmental and climate economics: the assumption that responsibility can be externally engineered through incentives, without attending to how individuals come to see themselves as morally accountable agents.

In response, this paper proposes a conceptual distinction between two forms of environmental responsibility. *Accordant responsibility* refers to behaviour that aligns with policy instruments–either through preference adaptation or responsiveness to incentives. This conception remains within the Pigouvian logic in seeking to adapt our policy tools, but risks collapse if incentives are misaligned or perceived as illegitimate. In contrast, *procedural responsibility* foregrounds ethical reflection, autonomy, and commitment. It resists reduction to a narrow definition of rationality and instead calls for policies that support moral deliberation and collective identification with ecological goals. This distinction is not merely theoretical. When policy instruments displace procedural responsibility (by translating ethical duties into priced permissions or framing virtue as
compliance), they may erode the very capacities that sustained climate engagements require. If climate policy aims not only to reduce emissions, but also to bolster environmental responsibility, it must be attentive to the moral subject it presupposes and the one it seeks to produce.

This analysis finally challenges the foundational model of the economic agent in environmental policy, making it highly relevant for policymakers. If responsibility is not accounted for in the design of carbon taxes, policymakers may enforce sub-optimal or socially illegitimate tax levels, which may backfire and fuel even more consumption. Conversely, if responsibility is accounted for in such designs, the policy-maker should consider which conception of responsibility is being pursued. By focusing on an *accordant* responsibility, a policymaker may be tempted to enforce carbon taxes and green nudges, that is, large-scale policy tools taking into account how preferences may adapt to the implementation of such policies. By focusing on a *procedural* responsibility, a policymaker may be tempted to promote institutional designs that seek to encourage new covenantal reasoning, such as the French Citizens' Convention on the Climate. We do not have to adjudicate between the two conceptions of responsibility, as both can be complementary. However, by clarifying the normative underpinnings of responsibility in relation to carbon taxes, this paper argues for an integrative framework in which preferences, norms, and moral commitments co-evolve alongside policy. This has broader implications for carbon tax models, offset markets, and downstream responsibility: designing effective climate policy requires more than behavioural steering. It also calls for policies that engage, sustain, and foster the ethical foundations of environmental responsibility.
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