Climate Change and Individual Behavior

Abstract

This paper studies the causal effect of providing information about climate change on individuals’ willingness to pay to offset carbon emissions in a randomized control trial. Receiving truthful information about ways to reduce CO2 emissions increases individuals’ willingness to pay for voluntary CO2 offsetting relative to the control group. Individuals’ responses vary depending on their sociodemographic characteristics and along a rich set of prior beliefs and concerns regarding climate change. In a follow-up survey, we study the endogenous information acquisition of survey participants and show individuals choose information that aligns with their views.

Keywords: Climate change, information treatment, willingness to pay, CO2 compensation, information acquisition

JEL Classification: D10, D83, D91, Q54