Conference Agenda

The Paris Agreement includes a ratchet-up mechanism designed to accelerate the progress towards long-term climate goals by prescribing that parties' commitments to climate change cannot decrease over time. However, this mechanism often leads to reduced early contributions to avoid high obligations later on, known as the ratchet effect. We experimentally investigate this effect in a threshold public good game and test two amendments: the strong ratchet-up mechanism (SR) and the collective minimum contribution mechanism (CMC), with the former requiring strictly increasing contributions and the latter a collectively chosen minimum. Our experiment supports a significant ratchet effect in the weak ratchet-up mechanism. Subjects reduce their contributions initially, but the increasing contributions over the course of the game are insufficient to offset the early drop, leading to a lower provision rate. The SR mechanism also suffers initial low contributions but recovers faster, effectively compensating the initial drop. The CMC mechanism mitigates the ratchet effect by boosting contributions at the beginning of the game, especially when the minimum contributions are binding. However, both the SR and CMC mechanisms lower individual willingness to contribute. Balancing these conflicting incentives is crucial for an effective climate policy design.

This article investigates the impact of market intermediaries in credit-based environmental

markets, such as carbon credit markets. We develop a model in which firms can

participate in the market either directly or via an intermediary. We focus on a market with

demand uncertainty and evaluate two common forms of contracts between firms and the

intermediary: a fixed-price contract and a share-price contract. Our theory predicts that

introducing a dominant intermediary, under either contract type, increases both the overall

supply of credits and market efficiency (despite potential market power issues). These

gains arise as the intermediary contracts enable suppliers with high entry costs (but low

marginal costs) to enter the market but this is at the expense of incumbent suppliers,

who reduce their supply when the price falls consequentially lowering their profits. Our

theoretical predictions are tested using a laboratory experiment, with the results largely

consistent with theory. The results are robust over a range of parameter values that reflect

varying demand and supply conditions.

Carbon dioxide removal (CDR) is critical for achieving net-zero targets, particularly for addressing residual emissions from hard-to-abate sectors such as agriculture and aviation. This study examines willingness to buy voluntary carbon offsets (VCOs) across different emission sources and compensation methods. Using a factorial online survey experiment with 2,400 participants in Germany, we varied both the emission source - air travel vs. meat consumption - and the offset method - afforestation, peatland restoration, seagrass restoration, or solar parks. Furthermore, we varied the price. Participants were more willing to purchase offsets for air travel emissions than for meat consumption, likely due to a lower perceived climate impact of meat and weaker psychological pressure to mitigate it. Afforestation emerged as the most preferred offset method, reflecting familiarity and a strong emotional connection to forests. However, peatland restoration led to a unique outcome: when offered as an offset, participants were equally likely to compensate for meat and flight emissions. This suggests a sectoral mental accounting effect, where respondents linked peatland restoration with agricultural emissions, reinforcing the perceived need for compensation of environmental damage in the same sector. Our findings underscore key challenges for climate policy. The reluctance to offset meat-related emissions highlights gaps in public awareness regarding agricultural emissions, which are difficult to reduce technologically and will constitute a major share of residual emissions requiring compensation. Additionally, the strong preference for ecosystem-based solutions over renewable energy investments suggests potential biases in public support for mitigation strategies. Addressing these perceptions through targeted communication and education could enhance acceptance of a broader portfolio of climate solutions, ensuring that offsets complement rather than substitute direct emission reductions.

Why are some people more willing to fight climate change than others? This paper empirically tests a widely-hypothesized determinant of climate attitudes — life expectancy. While theoretical models suggest that longer life expectancy increases willingness to pay for climate action, empirical evidence for this relationship remains scarce. Using survey data from more than 120,000 individuals in 122 countries and plausibly exogenous variation in life expectancy across age-gender-country cells, we find that individuals who can expect to live longer are more willing to pay for climate action. The result is robust to a number of alternative specifications and controls as well as an instrumental variable strategy. These findings contribute to the broader understanding of how demographic and health dynamics shape climate attitudes.