Behavioural Economics Seminar: Preferences for Climate Policy – University of Copenhagen

Behavioural Economics Seminar: Preferences for Climate Policy

The Behavioral Economics group at Department of Food and Resource Economics (IFRO) invite to open seminars and reading group sessions with a range of subjects within Behavioral Economics.

Lea Skræp Svenningsen, PhD fellow at IFRO, will present Preferences for Climate Policy.

Abstract

Description: With the general focus on preferences for climate policy, Svenningsen will present two papers they are currently working on:

1) DISTRIBUTIVE OUTCOMES OF CLIMATE POLICY MATTER: MEASURING INTERGENERATIONAL SOCIAL PREFERENCES IN CLIMATE POLICY
This study examines whether people have distributional preferences for the impacts of climate policy, when they make real donations towards such policies. In an incentivized online choice experiment a representative sample of 92 members of the Danish public are endowed with 27€ and are asked to make 16 choices among different climate policy options. The climate policies are described in terms of two main outcome variables; future effects on income in year 2100 and present co-benefits from mitigation action. Both outcomes are described for three specific regions of the world, Western Europe, Southeast Asia and Sub-Saharan Africa. For each participant one choice was drawn at random to be realised and the total amount donated by participants was used to purchase and withdraw CO2 quotas and credits in the European Emission Trading Scheme and as donation to the UN Adaptation Fund. A Random Parameter logit model shows that distributional concerns matter for people when they donate to climate policy and that on average people to prefer to donate to climate policies that secure better outcomes for poorer regions, suggesting that elements of Inequity Aversion influence the choice of climate policy. This study also finds that donations to climate policy increase with age. The results underline the importance of considering preferences for distributional outcomes when designing climate policy.

2) CHOOSING CLIMATE POLICY: THE INFLUENCE OF RISK PERCEPTION AND TIME PREFERENCES
This paper examines to what extend respondents own indicated degree of risk perception of climate change and their individual discount rate explain their choice of climate policy? In a stated preference study on a representative sample of the Danish population, this study finds that preferences for distributional outcomes of climate policy is linked to how severe people perceive the risk of climate change as being. Respondents in the survey expected significantly higher average temperature increases in Southeast Asia and Sub-Saharan Africa. The results show that the influence of time preferences is subtle and likely to be caused by some other underlying systematic preferences not captured in the models.

Bring your own lunch, and we provide knowledge and network.

For further information, contact: Catrine Jacobsen, cj@ifro.ku.dk