Conference Agenda

Carbon pricing has emerged as a prominent policy tool to mitigate climate change due to its proclaimed high efficiency and effectiveness. However, the successful and sustainable implementation also depends on the public acceptability of such policies. In this study I investigate how revenue recycling shapes public attitudes towards carbon pricing. I conducted a systematic literature review to screen the literature extensively and identified 45 relevant studies from 2004 to March 2023. Using qualitative content analysis I identify relevant factors and construct a typology of revenue recycling options. Subsequently, a consensus ordinal ranking of revenue recycling options, based on the empirical findings of the reviewed studies, synthesizes current knowledge. The results reveal that revenue recycling has a crucial impact on public acceptability. While environmental earmarking ranks highest, and allocating the revenues to the general government budget is the least preferred option, numerous other revenue recycling options lie between these two options. Moreover, the literature presents divergent findings regarding the level of public acceptability of specific revenue recycling options. The diversity of research contexts and designs introduces inherent limitations that may explain variations in rankings observed across different studies. Notably, I identify political trust related to and salience of revenue recycling as important factors affecting public acceptability of carbon pricing. Finally, this research offers a framework for policymakers seeking to design revenue recycling strategies that align with public preferences to implement carbon pricing.

Mitigating emissions from the food system, which constitute about one-third of global greenhouse gas emissions, is a vital goal for research and policy. This study empirically tests the effectiveness of different policy interventions to reduce the carbon footprint of food choices on food-delivery apps, using an incentive-compatible online randomised controlled trial with 4,008 participants. The experiment used an interactive web platform that mimics popular online food delivery platforms (such as Uber Eats) and included three treatment conditions: a sign-posted meat tax, a carbon footprint label, and a choice architecture intervention, which changed the order of the menu so that the lowest carbon-impact restaurants and dishes were presented first. Results show that only the choice architecture nudge significantly reduced the average meal carbon footprint by 0.3 Kg/CO2 per order (12%), driven by a 5.6 percentage point (13%) reduction in high-carbon meal choices. Moreover, we find evidence of significant health and well-being co-benefits. Menu repositioning resulted in the average meal order being of greater nutritional value and containing fewer calories, whilst significantly increasing self-reported satisfaction with the meal choice. Simple back-of-the-envelope calculations suggest that menu repositioning would be a highly cost-effective policy instrument if implemented at scale, with the return on investment expected to be in the range of £1.28 to £3.85 per metric ton of avoided CO2 emissions, depending on implementation costs.

This study addresses the role of strategic uncertainty in explaining previous pessimistic results for collective risk social dilemmas. Experimental evidence in Gross and De Dreu, 2019 and Gross et al., 2020 suggests that when groups face a common threat, individuals resort to private protection over collective avoidance of the threat, if given the opportunity. We show that a large proportion of this overwhelming self-reliance can be attributed to strategic uncertainty about others’ behavior rather than selfishness. We expand the collective risk social dilemma to incorporate a subgroup ("outsiders") who are affected by the collective risk but do not have the capacity to protect against it. A second subgroup ("insiders") can invest into an individual solution (protecting only themselves) and a collective solution (protecting all group members through a threshold public good), as introduced in Gross and De Dreu, 2019. Across four treatment conditions we systematically vary strategic uncertainty: i) a baseline scenario with passive outsiders, ii) proportional arrangements where outsiders can send donations to insiders, changing the Nash equilibrium, iii) pledges allowing for nonbinding commitments among both subgroups, and iv) reducing the problem to a single insider and a single outsider. Our findings show that reducing strategic uncertainty leads to more collective solutions, with more outsiders protected and fewer resources lost. Moreover, we show that compared to a setting with passive outsiders, institutions involving proportional transfers to the group of public good providers can increase the likelihood of avoiding collective damages to the same extent as removing strategic uncertainty with a single public good provider and a single outsider.

Mekong Delta is one of the world’s most vulnerable regions to climate change and extreme weather events including sea-level rise, salinity intrusion, drought, and floods. In response to these complex and evolving challenges, alternative land use (e.g., the transition from rice to rice-shrimp) or alternative labor use (e.g., off-farm activities and out-migration) are among adaptation strategies to improve farmers’ livelihood in the region. Nonetheless, conflicts might emerge, exemplified by tensions between those advocating for innovative adaptation and those seeking to maintain traditional farming practices. Our study examines this issue through a series of behavioral games involving 360 rice/shrimp farmers in the Mekong Delta. We focus on the role of decision-making power (agency) in land use transitions and its influence on farmer conflict. The result suggests that farmers without agency are more likely to exhibit spiteful behaviors. The effect is stronger and more significant for farmers with higher opportunity costs, who faced a larger trade-off in the first game. Our research highlights the importance of empowering farmers to make informed decisions about their land use practices, ultimately fostering sustainable peace and collective resilience within the context of a changing climate and an increasingly complex world

Perceptions of air pollution should play a crucial role in shaping individual avoidance behaviors, yet their accuracy and formation remain underexplored. This paper studies how individuals perceive NO2 pollution and evaluates the impact of these perceptions on short-term avoidance behaviors and willingness to pay for defensive measures. Drawing on data from a survey experiment involving 3,000 participants in the Greater London Area, the study uncovers substantial misperceptions in individuals' understanding of local NO2 pollution levels. Participants, assigned to different treatment conditions, received varying information about actual NO2 pollution levels and related health risks. This approach allows for an analysis of the impact of information interventions on misperceptions and subsequent avoidance behaviour.

For retail investors, the service of financial advisors is a distinct type of credence goods. Individuals, even after purchasing the investment products, are not sure about the quality of the advice and to what extent the required fee charges are necessary. Indeed, the new dimension of “sustainability” in investments introduces wiggle room for advisors to charge more to investors who show preferences for sustainable investments, a charge not justifiable by their skills, efforts, or the associated costs (Laudi et al. 2023).

In this paper, I focus on the advice-taking side of the story. Using an incentivised online experiment with n=1,973 UK residents, I explore if investors allocate a larger share to sustainable funds based on advice before and after fees of the sustainable funds are increased. Moreover, I investigate the effects of “bad advice” - advice information that poorly matches the sustainability preferences of the individuals (as this trait is frequently unobservable by advisors outside the EU). What the “financial advisor” says, including the advice treatments in this experiment is simulated with written texts. I have designed this based on consultation with practitioners in the banking sector.

I find that in the control group, individuals with sustainability preferences invest far more in light- and dark-green funds. However, in the treatment groups, they are also found to follow the “bad advice” and increase investment shares in the conventional fund. Higher fees on the two green funds lead to significantly smaller shares, while rebounds in the green investments are observed after green fund advice. This suggests that individuals’ investment allocation profiles are determined largely by their sustainability preferences and by fund fee situations. Nonetheless, advice, inter alia “bad advice”, is still effective in rather homogenously increasing the investment shares across treatment groups by 2%-10%. Identified effect mediators include future return perceptions and self-reported warm glow feelings.