Preferred strategies to reduce CO2-emissions by 30: Insights from a multiple discrete-continuous extreme value model

Abstract

While cost of climate policies and their distributional consequences have become increasingly relevant, very little is currently known about how people across societal sub-groups evaluate and trade-off necessary behavioural changes and financial costs when faced with decisions about how to reduce individual carbon emissions. To understand such preferred pathways, a priority evaluator experiment was fielded. 3‘456 participants were tasked to reduce their initial carbon emission levels by 30% by choosing their preferred strategy mix and how intensely they want to pursue any chosen strategy. We use a Multiple Discrete-Continuous Extreme Value Model (MDCEV) to model both dimensions simultaneously. We find that while strategies that imply behavioral change are generally accepted, they usually only contribute little to overall savings. Meanwhile, outsourcing a considerable chunk of reductions via certificates is a prominent choice. In particular, high-income households tend to reduce emissions via investments, while lower-income households may have to bear disproportionally more of the behavioral cost in order to reach the reduction target. People further to the right on the political scale reach the target less frequently and prefer measures that benefit the housing unit (better insulation of the facade and roof), or install solar panels. This might be important since right-leaning individuals are generally more critical of climate change and the need to take personal action. Incentivizing these individuals to invest in reduction strategies might therefore be pivotal.