Can monetized carbon information increase pro-environmental behavior? Experimental evidence

Abstract

Firms increasingly publish information about their sustainability in annual reports and on products.
However, it is unclear which information induces pro-environmental behavior most effectively. In an experiment, we compare the effect of carbon display in kilograms, abatement costs, and social costs, respectively, on individuals' purchasing decisions.
Contrasting previous literature, we find that the type of display has no significant impact on purchasing decisions. Nevertheless, most participants believe that social cost information leads to the largest carbon reduction by consumers, and many prefer this information. Our results have implications for managers and policymakers interested in setting standards for CO2 information.

Keywords: sustainability reporting, carbon label, economic experiment, social cost of carbon

JEL Classification: D91, Q56, M14