Voluntary carbon offsetting and consumer choices for environmentally critical products—An experimental study

Johan Warburg, Britta Frommeyer, Julia Koch, Sven‐Olaf Gerdt and Gerhard Schewe

Business Strategy and the Environment, 2021, vol. 30, issue 7, 3009-3024

Abstract: Purchases of voluntary carbon offsets (VCOs) are growing tremendously. At the same time, the number of activities and products for which VCOs are available is increasing. Experts discuss whether offering VCOs is exclusively associated with positive effects on the environment or if it instead may lead to increased consumption of environmentally critical products. To date, empirical evidence on such adverse effects is scarce. Therefore, this study uses a randomized controlled trial design to investigate how the availability of VCOs affects consumers' choices for environmentally critical products. The results suggest that when VCOs are available, the likelihood of environmentally critical consumption increases. From a mental accounting perspective, our findings support the theoretical rationale of VCOs as an instrument for moral licensing. Additionally, our results indicate that individuals tend to trivialize the harmfulness of the environmentally critical product and overestimate the effectiveness of VCOs for environmental protection, which we consider strategies for reducing cognitive dissonance and guilt.

Date: 2021
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