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Attitudes to the Green Transition and Willingness to Pay in Emerging Markets: Concerned but Not Paying

Author

Listed:
  • Pablo Garcia Guzman

    (European Bank for Reconstruction and Development)

  • Zsoka Koczan

    (European Bank for Reconstruction and Development)

Abstract

While individuals in emerging markets are concerned about climate change, such concerns do not necessarily translate into a willingness to pay for environmental policies. Using rich data for 37 economies, mostly from emerging markets in Europe, the Caucasus, Central Asia and parts of North Africa and the Middle East, we empirically examine correlations with willingness to pay for environmental policies. We show that, beyond ability to pay, people who expect to be better off in the future, who are more patient and who trust the government are all more likely to be willing to pay for policies that mitigate climate change. Our results thus suggest that measures that increase people's incomes, build trust in government, reduce corruption and increase the transparency and efficiency of government spending could help boost support for green policies. Policies may also receive greater support if they take the form of subsidies, where the costs in terms of higher taxes are less salient.

Suggested Citation

  • Pablo Garcia Guzman & Zsoka Koczan, 2025. "Attitudes to the Green Transition and Willingness to Pay in Emerging Markets: Concerned but Not Paying," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 24(1), pages 5-28.
  • Handle: RePEc:mnb:finrev:v:24:y:2025:i:1:p:5-28
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    References listed on IDEAS

    as
    1. Veronesi, Marcella & Chawla, Fabienne & Maurer, Max & Lienert, Judit, 2014. "Climate change and the willingness to pay to reduce ecological and health risks from wastewater flooding in urban centers and the environment," Ecological Economics, Elsevier, vol. 98(C), pages 1-10.
    2. Ms. Era Dabla-Norris & Mr. Thomas Helbling & Salma Khalid & Hibah Khan & Giacomo Magistretti & Alexandre Sollaci & Mr. Krishna Srinivasan, 2023. "Public Perceptions of Climate Mitigation Policies: Evidence from Cross-Country Surveys," IMF Staff Discussion Notes 2023/002, International Monetary Fund.
    3. Peter Andre & Teodora Boneva & Felix Chopra & Armin Falk, 2024. "Globally representative evidence on the actual and perceived support for climate action," Nature Climate Change, Nature, vol. 14(3), pages 253-259, March.
    4. David Klenert & Linus Mattauch & Emmanuel Combet & Ottmar Edenhofer & Cameron Hepburn & Ryan Rafaty & Nicholas Stern, 2018. "Making carbon pricing work for citizens," Nature Climate Change, Nature, vol. 8(8), pages 669-677, August.
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    More about this item

    Keywords

    climate change; willingness to pay; trust; discount rate;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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