Carbon pricing has long been described as one of the most powerful tools we have to fight climate change, yet the actual prices governments put on carbon emissions remain stubbornly low compared with what climate models say is necessary. Why? It is not simply that transition is expensive or that technology is not ready. The deeper obstacle may be what ordinary people believe about climate change itself. Most economic models used to guide policy assume that citizens roughly understand the real risks of a warming planet. In reality, that assumption is often wrong. Over decades, disinformation campaigns, political spin, and confused media narratives have systematically downplayed the dangers of greenhouse gas emissions, and these distorted beliefs have made it harder for governments to act. A new study published in the journal Risk Sciences takes that mismatch seriously. Rather than assuming away public misperception, researchers from University College Dublin and the ILaVita Foundation built a model in which the public is divided into two groups: those who are “informed” and understand the true scale of climate damage, and those who are “misinformed” and consistently underestimate it. The balance between these groups changes over time, shaped by learning, sudden disinformation shocks, and the visible harm that climate disasters bring. The result is a more honest picture of how carbon pricing actually works, and why it often fails to live up to our expectations.
The model the researchers developed is not a static snapshot but a dynamic, living system. At any moment, the share of informed citizens can rise as people learn from peer networks, scientific reports, and firsthand experience of floods or heatwaves. It can also fall sharply when a coordinated disinformation shock floods the media with misleading claims. The authors then asked a simple but crucial question: if a society is split in this way, how should a carbon tax be set? They compared two very different approaches. In the first, a politically constrained planner—think of a technocratic agency or central authority—understands the true climate damages perfectly, but cannot simply impose whatever policy it wants. Whenever it tries to push a carbon price higher than what public opinion is willing to accept, it pays a political cost. It can act ahead of public support, but only at a price. In the second approach, policy is decided by majority voting. Here, the carbon tax reflects the preferences of the median voter, and tax changes happen slowly, because real-world legislation takes time, debates must happen, and institutions are full of inertia. By putting these two systems side by side, the model reveals something surprising about how democracy and expertise interact in the fight against climate change.
The most unexpected finding is that, at least in the early phases of transition, democracy can out-perform a well-meaning but constrained planner. It is easy to assume that a central agency with deep scientific knowledge would always set a more ambitious carbon price than a messy, short-sighted democratic process. But the model shows that if informed voters happen to form a clear majority, the median voter will actually support a very strong carbon tax. In that situation, majority voting can generate a carbon price that rises quickly and stays high, producing stronger early emission cuts and a lower peak in global warming than the planner can achieve. This “democratic advantage” is fragile, but it is real. The reason is that the planner, even though it knows the true damage, has to worry about public backlash at every step. It nudges policy upward cautiously, careful not to provoke too much resistance. Democratic voting, by contrast, can leap forward as long as ordinary citizens are convinced. When people are informed, they do not need to be dragged; they drag the policy forward themselves. But the same mechanism that gives democracy this early strength also makes it vulnerable. If the informed majority starts to shrink, the entire political target shifts. The study describes this as a cliff-edge dynamic: once disinformation erodes enough of the informed population, the democratic carbon tax does not decline gradually—it falls off a cliff.
The contrast between the two systems becomes even clearer when disinformation arrives or persists over time. Under majority voting, a sudden shock of false information can dramatically reverse the public mood, and because tax rates are tied to the median voter, policy collapses quickly. The scientifically ambitious carbon price that once seemed inevitable becomes politically impossible almost overnight. The planner, on the other hand, weakens more smoothly. It sees public support fading, but it is insulated from the immediate swings in opinion, so it can hold on to a moderately high carbon price for longer. The authors found that the timing of disinformation matters enormously. If false narratives arrive early, before strong climate policy is locked in, voters may never support an ambitious carbon price in the first place. But if disinformation arrives late, or persists over years, it can be even more damaging. At that point, society has already begun the transition to a low-carbon economy, but the political foundations are still fragile. A late shock undermines support just as the costs of transition are becoming visible, and both the democratic and the planner-based systems can slide toward what the researchers call “hothouse” warming trajectories—paths that lead to far higher temperatures than the Paris Agreement goals. In other words, one well-timed disinformation campaign can undo a decade of policy progress and send the entire world down a much hotter path.
Encouragingly, the study also points to a way out. The researchers tested what happens when a sufficiently strong counter-disinformation intervention is launched, one that actively pushes back against false narratives with scientific facts, transparent communication, and perhaps the promotion of trusted voices. They found that such an intervention can almost completely offset an early disinformation shock. If the counter-messaging is strong enough, outcomes return close to the no-disinformation benchmark, with ambitious carbon pricing and temperatures staying well below the most dangerous thresholds. But the intervention has to be strong and well-timed; half-hearted responses simply are not enough. This leads the authors to a powerful conclusion: preserving the integrity of the information environment is not just a matter of public discourse or democratic quality. It is a macroeconomic factor in its own right. Just as a country might invest in roads, grids, or ports to enable economic activity, it must invest in the informational conditions that make climate policy possible. A society cannot tax carbon effectively if its citizens do not believe carbon is a problem. So information policy is not merely complementary to carbon policy; it is a prerequisite for it. Without a shared understanding of the risks, the political will to keep carbon prices high simply evaporates.
The broader message of this study is that climate policy cannot be divorced from the battle over human attention and belief. Economists have often treated misinformation as an annoying side issue, something vague that should be handled separately from carbon taxes. But this research shows that disinformation is a direct economic variable, one that can flip the outcome of entire policy regimes. For governments, this suggests a need to design climate policy with psychological and informational resilience in mind. It may not be enough to appoint expert bodies or create carbon markets; that the public remains on board, and that falsehoods are met with fast, credible, and persistent rebuttal. For ordinary citizens, the study is a reminder that being skeptical of wishful narratives, paying attention to where information comes from, and supporting institutions that prioritize truth are themselves climate actions. The model gives hope because it shows that good information is not a weak soft power; it is the very foundation on which strong carbon pricing can survive. In a world of deepening climate disasters and ever more sophisticated disinformation, the fight to keep facts credible is as urgent as the fight to reduce emissions. Indeed, the two fights are inseparable. If we want carbon pricing to be the cornerstone of a livable climate, we must also defend the shared understanding of reality that makes it possible.