Experimental Design Details
Sampling procedure: The study will be carried out in Nigeria. A combination of purposive and simple random sampling will be applied in the selection of households for the study. Enugu, Lagos and Abuja FCT will be purposively selected from the Eastern, Southern and Northern parts of Nigeria. From each of the three States, 20 enumeration areas (EAs) as designated by the National Population Commission and NBS will be randomly selected, giving a total of 60 EAs. Finally, from each of the 20 EAs, 10 households will be randomly selected giving a total sample size of 600 respondents for the study. Experimental procedure: The sampled households will be assigned randomly to three groups, treatment I (N = 200), treatment II (N = 200) and control (N = 200). To ensure similarity among the groups, we will use quotas on age, gender and educational level. Outcome variable for the study is the acceptability of carbon tax, and a dichotomous response of 1 = accept or 0 = otherwise will be used. At the baseline, the knowledge of the households on carbon tax and their acceptability will be collected using a validated questionnaire. Participants will be asked to rank their knowledge about a carbon tax using a 4-point scale of 1 = excellent, 2 = Good, 3 = fair, 4 = poor. First objective: To test how information provision on carbon taxation influences acceptability, the survey will follow a guide by PMR & CPLC (2018) on communicating carbon pricing, by providing a short text explaining how a carbon tax works in comprehensible terms for different audiences; urban and rural. Treatment group I will only receive this information while the control will not receive any information. Second objective: To test the preferred use of carbon tax revenues by households that will maximize their acceptability, the treatment group II will receive both information on carbon tax and will be asked to allocate a percentage of the total carbon tax revenues (100%) to each of the five proposed revenue-use options
(funding of environmental projects; revenue transfers only to low-income households; equal revenue transfers to all households as compensation; use half of the revenues to fund environmental projects and the other half to compensate low-income households; and use half of the revenues to fund environmental projects and the other half as equal transfers to compensate all households) as if it was their decision. At the end line, that is after six months, we will retest the acceptability using the same questionnaire. The knowledge of the households about a carbon tax will be reassessed. The survey will ask participants if they would accept a carbon tax if revenues were to be distributed according to their preferred allocation option.
Analytical models: The effect will be estimated using a double-difference (DD) impact estimation procedure (Khandker et al., 2010). In DD, the treatment and comparison groups (first difference) are compared before and after an intervention (second difference) rather than comparing it at one point in time.