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 CO 2 emissions increases individuals’ WTP for CO 2 offsetting. In a follow-up survey, we document individuals also increase their portfolio share in green stocks when learning about the possible benefits of investing in green firms for the environment but only if the information is not paired with the information on lower expected returns. Finally, we study the endogenous information acquisition of respondents. Individuals choose information that aligns with their views. Our results show the possibility to motivate individuals to engage in environmentally friendly behavior via information campaigns but also the challenges policymakers would need to navigate.