Conference Agenda

What happens when beliefs about the pro-environmental impact of voluntary action are challenged? The Voluntary Carbon Market offers a unique opportunity to explore this question. Recent criticisms about permanence uncertainties cast doubt on forestry offsets' ability to achieve long-term mitigation goals. Despite this, demand for forestry offsets remains high, potentially due to misspecified beliefs on permanence and climate impacts, as well as strong perceived co-benefits. In a framed-field experiment involving a representative sample of 1,012 respondents, I elicited prior beliefs regarding offsetting. Subsequently, I employed an incentivized offsetting choice presented in various information contexts to determine whether updating inaccurate beliefs prompts consumers to align their offsetting choices or whether this backfires, causing consumers to abstain from voluntary environmental action. Results show that respondents indeed overestimate forestry offsets' long-term climate impact but understand their co-benefits well. Providing information on the long-term climate impact significantly influences offsetting behavior of both respondents holding accurate and inaccurate beliefs, shifting preferences from impermanent to a permanent offsetting option, which is facilitated by canceling EU ETS allowances. However, respondents do not abandon forestry offsets entirely, indicating a strong desire for both long-term climate mitigation and the short- to mid-term benefits of co-benefits.

This paper examines the effect of transparency in carbon-neutral labeling on consumer willingness to pay. Carbon-neutral labels indicate that a product’s greenhouse gas emissions have been offset (compensated) outside the company and/or directly reduced within it. Although CO2 offsets are viewed as less effective than CO2 reductions, the labels on the market lack transparency regarding the proportion of CO2 offset and CO2 reduction.

This study empirically investigates whether consumers are willing to pay for transparency on carbon-neutral labels and explores whether there are differences in consumers’ valuation of CO2 reductions versus CO2 offsets. Using a discrete choice experiment survey among UK tea consumers, I compare willingness to pay for standard versus transparent carbon-neutral labels. The control group saw a standard label without information about the breakdown of CO2 offsetting and reduction. The first treatment group saw a transparent label showing 95% CO2 offsetting and 5% CO2 reduction, and the second treatment group saw a label with a 50%-50% split.

I find no evidence of consumers’ willingness to pay for transparency on carbon-neutral labels or preference for CO2 reductions over CO2 offsets. Communicating only the shares of CO2 offsets and reductions alone may not be sufficient and even confuse consumers. Therefore, firms and policymakers can clearly communicate how the implications of CO2 reductions and offsets differ from each other and how offsets are considered inferior to direct reductions

Delivering products to consumers is a crucial aspect of e-commerce and a significant factor when discussing its sustainability. With the rapid growth of e-commerce and its related negative externalities, there is an emerging literature on the potential of nudging consumers towards more environmentally friendly delivery options. We contribute to this literature by exploring a quasi-natural experiment of green labeling, investigating revealed preference data from 35,828 Norwegian customers over almost five weeks in 2024. A green label was used on time slots to optimize the route planning, thereby minimizing driving and related externalities. We exploit the quasi-random property of the assignment mechanism of green labels to specific slots. We assess the impact of the green label on the probability of a customer choosing a greener alternative by estimating a multinomial logit model.

Results show that the probability of choosing a slot more than doubles when labeled as green. In addition, our results indicate a diminishing effect over exposure time. We find a willingness to pay € 1 for green delivery. Our findings show that green labeling is an effective tool for online retailers to minimize delivery costs.

We study the interplay between individuals' voluntary contributions to environmental protection and public environmental policy in a dynamic general-equilibrium model. To capture the observed discrepancy between the willingness of individuals to pay for public versus private environmental protection, we treat the quality of the environment as a public good and assume that voluntary contributions are motivated by a 'warm glow' of giving. We show that in the laissez-faire scenario without government intervention, the strength of warm glow negatively affects aggregate output and positively affects environmental quality in the long run. However, when the government intervenes and decides on environmental policy in the interests of individuals, the warm-glow strength has a negative long-run effect on both variables. Thus, our results suggest that advocating for private actions to ensure a better environment in the future may be counterproductive in the presence of public environmental policies.