Offsetting Versus Mitigation Activities to Reduce $$\hbox {CO}_{2}$$ CO 2 Emissions: A Theoretical and Empirical Analysis for the U.S. and Germany

Andreas Lange and Andreas Ziegler ()
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Andreas Ziegler: University of Kassel

Environmental & Resource Economics, 2017, vol. 66, issue 1, No 6, 113-133

Abstract: Abstract This paper studies the voluntary provision of public goods that is partially driven by a desire to offset for individual polluting activities. We first extend existing theory and show that offsets allow a reduction in effective environmental pollution levels while not necessarily extending the consumption of a polluting good. We further discuss the impact of an increased environmental preference on purchases of offsets and mitigation activities. Several theoretical results are then econometrically tested using a novel dataset on activities to reduce $$\hbox {CO}_{2}$$ CO 2 emissions for the case of vehicle purchases in the U.S. and Germany. We show that environmental preference triggers the stated use of $$\hbox {CO}_{2}$$ CO 2 offsetting and mitigation channels in both countries. However, we find strong country differences for the stated purchase of $$\hbox {CO}_{2}$$ CO 2 offsets. While such activities are mainly triggered by a high general awareness of the climate change problem in the U.S., the perception that road travel is responsible for $$\hbox {CO}_{2}$$ CO 2 emissions to a large extent is more important for driver’s license holders in Germany.

Keywords: Public good; Voluntary provision; Climate change; $$\hbox {CO}_{2}$$ CO 2 offsetting; Vehicle purchase; Discrete choice models (search for similar items in EconPapers)
JEL-codes: H41 Q54 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s10640-015-9944-7

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