The behavioral response to a corporate carbon offset program: A field experiment on adverse effects and mitigation strategies

Abstract

More and more organizations are compensating the greenhouse gas emissions caused by their products and services through carbon offset programs. From the customers’ perspective, the mitigation of negative externalities associated with their demand may increase the utility derived from the (then guilt-free) consumption. In particular in settings where consumers do not pay for the marginal cost of consumption, this may lead to higher levels of resource use. This article empirically examines how the announcement of an organizational carbon offset program affects consumption in a CO2-intensive everyday activity (showering). We further evaluate the provision of real-time feedback as a strategy to counteract potential increases in consumption. For this purpose, we conducted an eight-week randomized controlled natural field experiment in a German youth hostel (full 2 × 2 factorial design; N = 9,999 observations). Consumption in the group with the offset program was statistically significantly higher than in the control group (by 5.4 to 15.5%). However, participants who additionally received real-time feedback on their consumption did not increase their resource use compared to the control group. While the results suggest that carbon offset programs may increase resource use, the findings provide evidence that organizations can counteract these adverse effects by making the individual’s resource use salient. © 2020 Elsevier