Firms' Climate Expectations and Adaptation Plans

Last registered on October 23, 2025

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Pre-Trial

Trial Information

General Information

Title

Firms' Climate Expectations and Adaptation Plans

RCT ID

AEARCTR-0016562

Initial registration date

August 29, 2025

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

September 01, 2025, 2:59 PM EDT

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

Last updated

October 23, 2025, 5:24 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

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Primary Investigator

Name

Nicola Garbarino

Affiliation

ifo Institute – Leibniz Institute for Economic Research at the University of Munich

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Other Primary Investigator(s)

PI Name

Marie-Theres von Schickfus

PI Affiliation

ifo

Contact Investigator

PI Name

Filippo Pavanello

PI Affiliation

ifo

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Additional Trial Information

Status

In development

Start date

2025-09-01

End date

2026-12-30

Keywords

Environment & Energy, Firms & Productivity

Additional Keywords

Expectations, Survey, Natural Disasters, Firms

JEL code(s)

Secondary IDs

Prior work

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

Abstract

This study investigates how firms form expectations about local climate risks and whether these expectations influence their adaptation decisions. We focus on extreme rainfall and flood risks and combine survey data with localized weather and climate information. The study includes a randomized information intervention, where some firms receive credible, localized projections of future heavy rainfall, and a natural experiment leveraging variation in recent heavy rain events. By comparing firms that receive the intervention with those that do not, we examine how updated beliefs affect private adaptation actions—such as insurance or structural investments—and expectations about public adaptation measures. The research aims to understand whether providing targeted climate information can shift firms’ perceptions of risk and motivate protective measures. Outcomes are measured through survey responses collected before and after the interventions. Surveys will take place in September 2025, November 2025 (including information treatment) and September 2026.

External Link(s)

Registration Citation

Citation

Garbarino, Nicola, Filippo Pavanello and Marie-Theres von Schickfus. 2025. "Firms' Climate Expectations and Adaptation Plans." AEA RCT Registry. October 23. https://doi.org/10.1257/rct.16562-2.1

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Firms in the study are randomly assigned to either a treatment or control group.
- Treatment group: Firms receive a information based on data from the German Climate Service (GERICS) containing localized projections of future heavy rainfall in their administrative district. The report communicates the expected percentage increase in extreme rainfall days over the next 15 years, based on climate model simulations under a high-emissions scenario. For example, the information states: “Heavy rainfall events in your district could become [X]% more intense in the next 15 years.”
- Control group: Firms receive generic information about historical precipitation levels in Germany, without district-specific projections. For example: “In Germany, there has been an average of just under 800 mm of precipitation per year over the past 20 years. The occurrence of heavy rainfall events varies greatly from region to region.”
- Quasi-experimental element: The study also exploits variation in actual recent rainfall across districts. By linking firms’ investment decisions to real local extreme rainfall patterns over the past few years, we can examine whether observed changes in precipitation correlate with investment behavior, providing complementary evidence to the randomized information intervention.
The purpose of the intervention is to test whether providing firms with detailed, district-level climate forecasts—and comparing this to actual local weather patterns—affects their beliefs about local climate risks and their investment plans, including spending on buildings, equipment, software, and R&D. The intervention is delivered between survey waves of the ifo Business and Investment Surveys, which measure firms’ business expectations, uncertainty, and investment intentions.

Intervention Start Date

2025-09-01

Intervention End Date

2026-09-30

Primary Outcomes

Primary Outcomes (end points)

- The key outcomes are (i) firms’ expectations about future local extreme rainfall and their perceived risk of climate-related damage, (ii) intended adaptation measures such as protective investments and insurance.

Primary Outcomes (explanation)

- Climate-related expectations: measured from direct survey questions on the expected frequency and intensity of local extreme rainfall, the perceived probability of damage from such events in the next 12 months, and open-text responses describing considered climate scenarios.
- Adaptation intentions: constructed from binary or categorical survey responses indicating planned protective investments, insurance purchases, or expectations of public measures.

Secondary Outcomes

Secondary Outcomes (end points)

The secondary outcomes are: (i) business outlook and uncertainty, (ii) investment plans overall and by category (buildings, equipment), (iii) expectations about public adaptation measures.

Secondary Outcomes (explanation)

- Business outlook and uncertainty: taken from the standard ifo Business Survey questions on expected business conditions (6-month horizon) and two uncertainty scales (Likert, 0-100).
- Investment plans: measured from the ifo Investment Survey questions on expected changes in total investment and in specific categories (buildings, equipment, software, R&D), coded as categorical increases, decreases, or no change relative to the previous year.
- Expectation about public adaptation measures: categorical survey responses for different measures.

Experimental Design

The study combines a randomized information experiment with a quasi-experimental element based on naturally occurring weather variation. Firms in a representative panel of German businesses are randomly assigned to one of two groups. The treatment group receives district-specific projections of future extreme rainfall intensity from the German Climate Service (GERICS), while the control group receives general historical precipitation information for Germany. Outcomes are measured via follow-up survey questions on climate expectations, adaptation intentions, business outlook, and investment plans. In parallel, firms’ survey responses are matched to high-resolution geocoded weather data. This allows us to exploit exogenous variation in recent extreme rainfall events across districts to study the effect of actual weather experience on expectations and behavior. See attached pre-analysis plan for details.

Experimental Design Details

Not available

Randomization Method

Survey software Tivian.

Randomization Unit

Individual firms

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

No clustering.

Sample size: planned number of observations

~6,000 firms in the German manufacturing sector participating in the ifo Business Survey. Each firm will be surveyed three times on climate expectations, and twice on the other variables.

Sample size (or number of clusters) by treatment arms

For the survey experiment: 3000 firms control, 3000 treatment.

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

Supporting Documents and Materials

IRB