Arbeitspapier
Willingness to Pay for Carbon Mitigation: Field Evidence from the Market for Carbon Offsets
What do markets for voluntary climate protection imply about people's valuations of en- vironmental protection? I study this question in a large-scale field experiment (N=255,000) with a delivery service, where customers are offered carbon offsets that compensate for emissions. To estimate demand for carbon mitigation, I randomize whether the delivery service subsidizes the price of the offset or matches the offset's impact on carbon mitigation. I find that consumers are price-elastic but fully impact-inelastic. This would imply that consumers buy offsets but their willingness to pay (WTP) for the carbon it mitigates is zero. However, I show that consumers can be made sensitive to impact through a simple information treatment that increases the salience of subsidies and matches. Salient information increases average WTP for carbon mitigation from zero to 16 EUR/tCO2. Two complementary surveys reveal that consumers have a limited comprehension of the carbon-mitigating attribute of offsets and, as a result, appear indifferent to impact variations in the absence of information. Finally, I show that the widely-used contingent valuation approach poorly captures revealed preferences: Average hypothetical WTP in a survey is 200 EUR/tCO2, i.e., 1,150% above the revealed preference estimate.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 15939
- Klassifikation
-
Wirtschaft
Allocative Efficiency; Cost-Benefit Analysis
Asymmetric and Private Information; Mechanism Design
Taxation and Subsidies: Efficiency; Optimal Taxation
Valuation of Environmental Effects
Environmental Economics: Government Policy
- Thema
-
climate change
carbon mitigation
willingness to pay
carbon offsets
contingent valuation
nudging
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Rodemeier, Matthias
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute of Labor Economics (IZA)
- (wo)
-
Bonn
- (wann)
-
2023
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Rodemeier, Matthias
- Institute of Labor Economics (IZA)
Entstanden
- 2023
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