Conference Agenda

Agriculture is a major source of greenhouse gas emissions but has largely remained outside stringent climate policies, often due to concerns about resistance from the sector. With Denmark introducing the world’s first CO2e (CO2-equivalent) tax on agricultural emissions, this paper provides representative evidence on farmers’ beliefs about its impacts and examines whether expert information can causally influence these beliefs and the acceptance of the tax. Using a randomized survey experiment with 981 Danish farmers, we find widespread overestimation of the tax’s impacts on production, employment, and land values, with 94-97% of farmers expecting impacts up to three times larger than expert estimates. Providing expert information reduces these perception gaps, through the effect varies with the tax’s stringency, the size of belief gaps, and farm characteristics, and can even sometimes trigger a backfire effect. We also find that the belief revisions can translate into acceptance of the tax, though this remains conditional on the same factors. Our findings underscore that designing acceptable climate policies for agriculture may require not only expert information but also targeted communication and complementary measures that account for farmers’ diverse characteristics and perceptions.