Understanding public intention to pay carbon tax to reduce greenhouse gas emissions in Malaysia

The idea of introducing tax on environmental externalities has been promoted for decades and can be traced back to the development of Pigouvian tax — a levy imposed on companies who caused harm to the environment or public health. This approach aims to internalise the cost of externalities to polluters and address climate change. Subsequently, the international community took a significant step towards combatting climate change by introducing carbon pricing mechanisms. The adoption of carbon pricing mechanisms has gain traction as a key climate policy tool to reduce greenhouse gas (GHG) emissions. Following this global trend, the Malaysian Government also plans to introduce a carbon tax to achieve its carbon-neutrality target by 2050. The idea of carbon tax has since sparked widespread discussion in Malaysia. Its implementation, however, requires extensive research to understand public behavioural intentions, enabling policymakers to design carbon tax policies that are both accepted and complied with by the public. This study aimed to understand Malaysians’ perception of paying a carbon tax and determine the potential factors that enhance their acceptance of such a policy. To achieve this, a well-established psychological theory known as the Theory of Planned Behaviour (TPB) was employed to investigate the complex psychological factors influencing public intention to pay carbon tax in Malaysia. This study extended the standard TPB model by adding a new variable which is environmental concern since it is recognised as a pivotal factor in pro- environmental decision-making processes and is hypothesised to significantly impact attitudes, social norms and perceived behavioural control. A structured questionnaire was developed for pilot study and subsequently refined for use in the final survey. The data was collected through online to reach out to potential respondents who are hard-to-reach from various location and face-to-face interview. A total of 404 responses collected between November 2023 and February 2024. Using Structural Equation Modelling (SEM) to gain a comprehensive path analysis, this study revealed that attitude, subjective norms and perceived behavioural control have significant positive relation with intention to pay carbon tax. The findings also suggested that environmental concern has a significant influence on the three TPB predictor which then led to a positive intention outcome. Among the three main TPB constructs, PBC emerged as the strongest predictor of intention to pay (β = 0.425, p < 0.01). This result suggested more transparency in the carbon taxation system and data that is publicly available which could empower public to pay carbon tax. The findings in this study provide an insight on public behavioural intention with regards to paying carbon tax in Malaysia and this can be a reference for policy makers to design a fair and acceptable carbon tax policy.

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