Individuals' Preferences for Permanence and Co-Benefits in Offsetting

Last registered on October 23, 2023

View Trial History

Pre-Trial

Trial Information

General Information

Title

Individuals' Preferences for Permanence and Co-Benefits in Offsetting

RCT ID

AEARCTR-0012278

Initial registration date

October 18, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

October 23, 2023, 9:29 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

Germany

Region

Primary Investigator

Name

Lara Bartels

Affiliation

ZEW – Leibniz Centre for European Economic Research

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2023-10-29

End date

2024-02-28

Keywords

Behavior, Environment & Energy

Additional Keywords

JEL code(s)

C83, C93, Q51, Q54

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

This study investigates the evolving landscape of carbon offsetting and consumer preferences. While carbon offsetting alone cannot fully address the climate crisis, its impact remains significant. The global offsetting market has seen rapid growth, reaching a value of $2 billion in 2021. Nevertheless, offsets from the voluntary carbon market are associated with considerable permanence uncertainties, casting doubt on their long-term climate impact and their contribution to net-zero goals. These concerns are particularly salient for nature-based offsets, such as forestry projects, given the risks associated with natural hazards and land-use changes. At the same time, nature-based offsets are offered at relatively low costs and provide a range of valuable co-benefits, making them 'charismatic carbon' offsets, and therefore particularly appealing to consumers. To explore individual preferences in carbon offsetting, this study employs an incentivized framed-field experiment. We aim to understand how consumers assess the importance of prices, permanence, and co-benefits when making offsetting decisions. First, I investigate subjective beliefs about the permanence and co-benefits of available offsetting options, addressing potential knowledge gaps and misconceptions among consumers. Second, I examine the trade-offs between permanence concerns, co-benefits, and prices. Finally, I explore whether providing information about the permanence issues associated with offsets affects their perceived market value.

External Link(s)

Registration Citation

Citation

Bartels, Lara. 2023. "Individuals' Preferences for Permanence and Co-Benefits in Offsetting ." AEA RCT Registry. October 23. https://doi.org/10.1257/rct.12278-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Participants will be invited to take part in an online survey, for which they will receive a fixed participation fee. The survey is structured in three elements:
1. Pre-experimental questionnaire
2. Incenivized Willingness to pay (WTP) questions under different treatments
3. Post-experimental questionnaire

Intervention (Hidden)

Participants will be invited to take part in an online survey, for which they will receive a fixed participation fee (€10). They have the opportunity to get another 30€ plus 2€. The survey is structured in three elements:

1. Pre-experimental questionnaire: Consumers will answer questions related to their climate preferences, their carbon footprint, previous offsetting activities, as well as their beliefs about how well different carbon offset projects perform in terms of permanence and co-benefits. There are two bonus questions on social norms, based on which participants can earn 1€ for each correctly estimated social norm.

2. Willingness to pay (WTP): Consumers will be informed that they have the opportunity to receive an additional €30. Participants can freely decide whether they want to keep the €30 for themselves or use it (either entirely or in parts) to compensate for parts of their yearly carbon footprint. They will be informed that they will make a total of four different decisions regarding how to use the €30. Once the survey is completed, I will randomly select 10% of the participants and randomly implement one of their four decisions. This means that, depending on what participants indicated, I will transfer the additional money to their account or transfer it to an offset provider. As an experimental intervention, I will vary the information that participants receive with the fourth WTP question.

3. Post-experimental questionnaire: Consumers will answer survey questions about the motivations for their offsetting choices, how good they feel, how much they trust different institutions, and basic economic preferences (such as risk and altruism), as well as socio-economic information.

To test the design, a pre-test is planned for October/November 2023. After having evaluated the pre-test and run the power analysis based on the pre-test, the main experiment is planned to be implemented in December 2023 / January 2024.

Intervention Start Date

2023-10-29

Intervention End Date

2024-02-28

Primary Outcomes

Primary Outcomes (end points)

The main outcome of interest are the WTP answers under the different treatment conditions, as well as the survey answers on the subjective beliefs regarding premanence and co-benefits.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

The remaining survey questions are ought to be used as control variables and for sub-goup analyses in the data analysis.

Secondary Outcomes (explanation)

Experimental Design

Participants answer four Willingness to Pay (WTP) questions and are asked to allocate an amount of money between themselves and carbon offsetting. The first three WTP questions are designed to explore how concerns about permanence are traded off against co-benefits and prices. Participants receive three different sets of information about an unspecified offset (following a vignette design), with variations along three key dimensions: i) the price to offset one ton of CO2, ii) the permanence of the offset, and iii) additional co-benefits. For each of these three sets of information, they decide whether they want to use that option to offset or keep the 30€ for themselves. The fourth WTP question is designed to investigate whether providing information about the permanence issues of offsets alters their market value. Participants can again allocate the 30€ between themselves and offsetting, but this time, the offset project is specified. This last WTP question is presented under four different treatments that provide different information about the permanence and the co-benefits of the specified offset project.

Experimental Design Details

Participants answer four Willingness to Pay (WTP) questions and are asked to allocate 30€ between themselves and carbon offsetting. The first three WTP questions are designed to explore how concerns about permanence are traded off against co-benefits and prices. Participants receive three different sets of information about an unspecified offset (following a vignette design), with variations along three key dimensions: i) the price to offset one ton of CO2 (x in the example) ii) the permanence of the offset (y in the example), and iii) additional co-benefits, e.g. high or low. For each of these three sets of information, they decide whether they want to use that option to offset or keep the 30€ for themselves. For example, this will look like this, with x and y taking proper values: "Please make your decision now on how you would like to allocate the 30€ between yourself and a carbon offset to offset your yearly carbon footprint. For every euro spent, you will offset y kilograms of CO2. The offset guarantees CO2 reduction for x years, after which the compensated CO2 is released back into the atmosphere. The offset is associated with either high or low co-benefits."

The fourth WTP question is designed to investigate whether providing information about the permanence issues of offsets alters their market value. Participants can again allocate the 30€ between themselves and offsetting, but this time, the offset is specified, and participants can choose to support tree planting, the EU-ETS, and/or keep the money for themselves. This last WTP question is presented under four different treatments: T1 serves as the control treatment and resembles the information participants receive when they offset on one of the many available offsetting platforms, such as atmosfair: how much carbon they can offset for a ton of CO2. This information is given for both available options, the tree planting project and the EU-ETS. To make the information about the amount of carbon more salient, additional information about an equivalent car trip in kilometers is provided.T2 provides the same information as T1 and adds information about the permanence of carbon removal for both tree planting and the EU-ETS. T3 provides the same information as T2 and additionally prices in permanence. T4 provides the same information as T2 and adds information about additional co-benefits provided by both tree planting and the EU-ETS.

Randomization Method

Online survey implemented with LimeSurvey, which creates a randnumber that randomly assigns participants to the different treatments.

Randomization Unit

Randomization takes place at the individual level.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

No clusters

Sample size: planned number of observations

Pre-test: 240 participants Main experiment: 1.000 participants

Sample size (or number of clusters) by treatment arms

Pre-test: Participants are evenly allocated to the treatment arms.
Main experiment: Currently, I plan to allocate participants equally to the treatment arms, but I will conduct a sample size estimation for the treatments based on the pre-test results. As a result, this allocation may change.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Will be performed based on the pre-test.

Supporting Documents and Materials

IRB