Affordability and credibility in climate policy: Willingness to pay for climate action in 25 post-communist countries

Abstract

Climate policies that ask households to bear costs, such as carbon pricing and energy-price reforms, remain politically feasible only if citizens accept those costs. Citizens may be aware of the impacts of climate change and still ask whether they can afford to contribute and whether they trust the state to use their taxes well. We examine how these two conditions are associated with willingness to pay (WTP) for climate action in 25 post-communist countries, 12 of them former Soviet republics, where institutional trust has long been low. Using the 2010 and 2022--2023 waves of the Life in Transition Survey (31,582 respondents), we measure WTP as willingness to give part of one's income or pay higher taxes to combat climate change. A stylized choice model of valuation, affordability, and institutional credibility guides the interpretation of linear probability models with wave interactions. Household expenditure and institutional trust are both positively associated with WTP. Between 2010 and 2023, the pooled income gradient fell from 2.0 to 1.0 percentage points per log unit and the trust gradient rose from 4.1 to 6.1 percentage points per scale point, but these changes differ across institutional trajectories. They are concentrated in the post-Soviet, Baltic, and Balkan countries and absent among the EU members of Central and Eastern Europe, and formal tests reject equal changes across country groups. The divergence in the trust gradient is robust to country-by-wave fixed effects and to inference clustered by country, whereas the pooled changes are estimated less precisely. Our evidence is associational and does not identify the events behind these shifts.