briq Newsroom

Mark Fallak

briq Climate Workshop

Can behavioral insights contribute to better climate policy? How do behavioral motives and biases interact with market institutions? And what are the consequences of market-based solutions in unequal societies? To discuss and explore these questions, the briq Climate Workshop brought together researchers from psychology, behavioral economics, environmental economics, theoretical microeconomics, climate finance, and macroeconomics.

Below is a brief summary of the topics covered (see the workshop program for a full list of presentations).

Experience of extreme weather events: Eric Johnson presented a meta study showing that current or recent weather experiences can influence concerns about global warming. Elke Weber‘s work showed that witnessing extreme weather events can even reduce the political partisan gap in climate attitudes. David Huffman explored the effects of weather on economic and social preferences, and Johannes Stroebel explained how the local reaction of investors to local weather events can be used to derive a climate risk hedge portfolio.

Preferences: Frikk Nesje argued that the weight a social planner places on future welfare increases if people’s preference to benefit future generations is generalized above their descendants, an idea he refers to as “cross-dynastic intergenerational altruism”. Klaus Schmidt explained under which circumstances carbon emission trading interferes with the private motivation of households, firms, or states.

Attention: Anna Schulze Tilling explored how food labels facilitate climate-conscious food choices, in particular through an attention mechanism. Matthias Rodemeier discussed how attention to information about energy efficiency can mute price sensitivity and thus interfere with the incentive effect of subsidies. 

Other topics included the behavioral principles of cooperation (Simon Gächter), peer effects (Sebastian Tebbe), the unequal effects of carbon taxation (Diego Känzig), the consequences of wealth inequality for the optimal taxation of externalities (Philipp Strack), and people’s misperception of their marginal impact on global warming (Christoph Semken). briq researcher Peter Andre presented global evidence on people’s willingness to act against climate change—brand new results from a novel briq research project.

What Germans think and do about climate change

The latest four editions of the briq policy monitor use a large representative sample of adults in Germany to document their attitudes towards climate change and the individual willingness to engage in climate protection, measured through an incentivized donation decision and questions related to climate-friendly behaviors.

The results are currently available in German language only – an English version will follow shortly.

Ulrike Malmendier joins German Council of Economic Experts

briq Visiting Professor Ulrike Malmendier has been appointed to the German Council of Economic Experts in August 2022. This body of independent experts, consisting of five members appointed for five years, is mandated by the federal government to present a periodic assessment of Germany’s macroeconomic development. Their expertise is meant to help both economic policymakers and the general public make informed decisions.

Ulrike Malmendier is among the top five percent of the world’s most cited economists. After completing a doctorate in Law at the University of Bonn, she received her doctorate in Business Economics from Harvard University in 2002. Her main research interests are in behavioral economics and behavioral finance, also including corporate finance, household finance, economics of organizations, and contract theory. She is currently a Professor of Finance and Economics at the University of California, Berkeley, and Chair of the briq Scientific Council.

Read more (in German):

Three questions with Peter Andre

Are people held responsible for bad choices they make because of detrimental circumstances? How do laypeople’s views of the economy differ from expert opinions? And why does this matter for policymakers?

In this video, briq Postdoc Peter Andre talks about how people make sense of the economic world around them – and how these insights can help address policy challenges, such as the recent surge in inflation.

Broad public support for strategies to reduce German energy dependence on Russia

According to a representative survey for the briq policy monitor, more than two-thirds of the German population would support a halt to energy imports from Russia in order to increase pressure on the Russian government. A broad majority would also welcome additional measures to reduce energy dependence, including alternative energy sources and energy-saving. When it comes to helping the Ukrainian people, many of the respondents would support both aid and integration policies, including permanent residence and work permits for refugees. Germans are divided, however, on the question of further arms deliveries to Ukraine.

Roughly 70 percent of the 2,000 respondents said they would support an embargo on Russian gas, oil and coal. Three out of four Germans are in favor of seizing assets from people close to Putin to mitigate the economic impact of the sanctions on Germany. Around 90 percent are in favor of accelerating the expansion of renewable energies. During the transition phase, three-quarters of Germans would accept an extended operation of Germany’s last remaining nuclear power plants, and 63 percent would accept postponing the coal phase-out.

Most Germans would also support other measures to reduce fuel consumption: 61 percent of respondents would accept a temporary speed limit of 100 km/h on German freeways; 52 percent would be in favor of reintroducing “car-free” Sundays. Four out of five Germans could also imagine extending the working-from-home mandate.

Only half of respondents, however, would agree to deliver more arms to Ukraine. Around 56 percent would be in favor of more political support for Ukraine’s accession to the EU. Seven out of ten Germans would consider granting Ukrainian refugees permanent residence and work permits to facilitate their integration.

Read also: Most Germans would be willing to pay even more for gas and heating

Most Germans would be willing to pay even more for gas and heating

According to a representative survey for the briq policy monitor, two-thirds of the German population would be willing to pay higher prices for gas and heating if this were to increase pressure on the Russian government. Four out of five Germans would lower their room temperature to save energy. And more than half of higher-income households would be willing to spend some of their income to help poorer households cope with higher energy prices.

Based on average fuel prices of about €2.20 per liter, two-thirds of the 2,000 respondents said they would accept higher prices to increase pressure on Russia. Around one-third would even accept a further increase of 30 cents or more. Surprisingly, the willingness to pay is largely independent of individual car use. However, there are clear differences along party lines. While 88 percent of Green Party supporters would accept higher fuel prices, this only applies to around 35 percent of AfD (right-wing party) supporters.

To reduce dependence on oil and gas imports from Russia, two-thirds of those surveyed would also accept a further increase in monthly heating costs. In numbers, around 58 percent of Germans would accept at least 10 euros in additional costs; 31 percent would be willing to pay at least an extra 20 euros per month. Germans’ willingness to pay in order to put pressure on Russia tends to increase with higher income and is more pronounced in western Germany. Household income matters less for people’s willingness to engage in energy-saving behavior. A large majority of respondents said they would be willing to lower their thermostat setting.

Moreover, half or respondents with an annual gross income of more than 50,000 euros would be prepared to contribute part of their income to support households that are more vulnerable to price increases. Almost 30 percent of high-income households would even give up more than two percent of their income to help low-earners. Commenting on the results of the survey, briq director Armin Falk notes: “Solidarity with Ukraine comes at a price – which many Germans seem willing to pay.”

Read also: Broad public support for strategies to reduce German energy dependence on Russia