Climate Change and Individual Behavior

Abstract

We study the causal effect of providing information about climate change on individuals’ willingness to pay (WTP) to offset carbon emissions of flights. Receiving truthful information about ways to reduce CO2 emissions increases individuals’ WTP for CO2 offsetting. In a first follow-up survey, we study the endogenous information acquisition of respondents. Individuals choose information that aligns with their views. In a second follow-up survey, we document individuals increase their portfolio share in green stocks when learning about the possible benefits for the environment but only if the information is not paired with the possible cost of lower expected returns.

Keywords: Climate change, information treatment, willingness to pay, CO2 compensation, information acquisition., portfolio choice, expectations

JEL Classification: D10, D83, D91, Q54, G11