Economics Job Talk

Abstract: An important driver of climate change inaction is the belief that individuals cannot have any tangible impact on climate change through their own actions. Currently available statistics are not suited to systematically assess or challenge this belief. In this paper, I derive the marginal impact of emission reductions – the effect of reducing emissions by 1 tonne of CO₂ (tCO₂) – on physical climate change outcomes, document important misperceptions and show how they affect behavior. Using climate models, I find that the impact of reducing emissions by 1 tCO₂ is 4.000 liters less glacier ice melting, 6 additional hours of aggregate life expectancy and 5 m² less vegetation undergoing ecosystem change. Subjects underestimate these figures by orders of magnitude. Moreover, their mental models are inconsistent with climate models. First, they assume that the marginal impact increases when others reduce their emissions (strategic complementarity). Second, they think emission reductions are a threshold public goods game. Providing subjects with the climate scientific findings causally increases perceived self-efficacy, intentions to reduce emissions and real donations to offset emissions. The findings are consistent with a model of threshold thinking, which predicts positive overall emission reductions of information provision in equilibrium.