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How much are individuals willing to pay to offset their carbon footprint? The role of information disclosure and social norms

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  • Schleich, Joachim
  • Alsheimer, Sven

Abstract

This paper examines individuals' willingness to pay (WTP) to offset their carbon footprint in response to receiving information about (i) the size of their own carbon footprint, and (ii) further receiving in addition information about the difference between their carbon footprint and the target footprint, i.e. per-capita GHG emissions compatible with the 1.5êC target. The analysis employs a demographically representative survey among the adult population in Germany, which includes a comprehensive online carbon footprint calculator and randomized information treatments. The findings from estimating double hurdle models suggest that disclosing information about the size of the individual carbon footprint increases average WTP by about one third. Providing this information appears to affect the intensive margin but not the extensive margin. In comparison, providing information about the size of their carbon footprint together with information about the difference between their carbon footprint and the target footprint does not appear to affect individuals' WTP. Further, the WTP is related with income, gender, age, education, carbon literacy, the belief that carbon offsetting is effective, and with environmental preferences. In comparison, the findings provide no statistically significant evidence that the WTP is associated with the size of the individual carbon footprint, and whether participants consider their carbon footprint to be higher or lower than the carbon footprint of the average adult in the population.

Suggested Citation

  • Schleich, Joachim & Alsheimer, Sven, 2022. "How much are individuals willing to pay to offset their carbon footprint? The role of information disclosure and social norms," Working Papers "Sustainability and Innovation" S10/2022, Fraunhofer Institute for Systems and Innovation Research (ISI).
    • Handle: RePEc:zbw:fisisi:s102022
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    More about this item

    Keywords

    carbon footprint; willingness to pay; social norms; information disclosure;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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