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Trial Title The Onset of Offsets: Social Signaling and Eco-Friendliness Onset of Offsets: The Role of Social Signaling in Mitigating Climate Change
Abstract Despite being a top concern for global welfare, policymakers have struggled to implement taxes to address climate change. This has led to an increasing reliance on voluntary actions taken by firms and consumers to combat carbon emissions. In this paper, I experimentally test a non-standard policy that publicizes voluntary consumer carbon mitigation, leveraging social rewards to increase uptake. Specifically, I show that posting names of carbon offset purchasers online is an effective tool to encourage voluntary carbon mitigation, as confirmed by experimentally estimated demand curves. Further, I show that social rewards vary heavily by perceived market penetration of offsets. Uptake increases vastly among those with the lowest perceptions of carbon offset market penetration but is only slightly impacted among those with moderate perceptions. I then estimate a structural model of demand for prosocial actions in the face of social rewards to understand the implications of my findings on optimal tax policy. To avoid crowding out social incentives, I show that optimal subsidies for consumer carbon mitigation technologies should start out small at low participation rates and ramp up as these technologies become more common. Despite being a top concern for global welfare, policymakers have struggled to implement taxes to address climate change. This has led to an increasing reliance on voluntary actions taken by firms and consumers to combat carbon emissions. In this paper, I experimentally test a non-standard policy that publicizes voluntary consumer carbon mitigation, leveraging social rewards to increase uptake. Specifically, I show that posting names of carbon offset purchasers online is an effective tool to encourage voluntary carbon mitigation, as confirmed by experimentally estimated demand curves. Further, I show that social rewards vary heavily by perceived market penetration of offsets. Uptake increases vastly among those with the lowest perceptions of carbon offset market penetration but is only slightly impacted among those with moderate perceptions. I then estimate a structural model of demand for prosocial actions in the face of social rewards to understand the implications of my findings on optimal subsidy policy. To avoid crowding out social incentives, I show that optimal subsidies for consumer carbon mitigation technologies should start out small at low participation rates and ramp up as these technologies become more common.
Trial Start Date November 04, 2024 January 13, 2025
Trial End Date November 08, 2024 January 31, 2025
Last Published September 17, 2024 10:36 AM January 07, 2025 11:33 AM
Intervention Start Date November 04, 2024 January 13, 2025
Intervention End Date November 08, 2024 January 31, 2025
Primary Outcomes (End Points) Uptake of an eco-friendly action (carbon offset purchases) Uptake of a carbon mitigation action (carbon offset purchases)
Additional Keyword(s) Social Signaling, Eco-friendliness, Prosociality Climate Change, Social Signaling, Eco-friendliness, Prosociality
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IRB Approval Date November 29, 2023 August 13, 2024
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