climate

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.

The working paper “Fighting Climate Change: The Role of Norms, Preferences, and Moral Values” by briq and University of Bonn researchers Peter Andre, Teodora Boneva, Felix Chopra and Armin Falk has received the IRECC Award for “Innovative Research in the Economics of Climate Change” given by the Institute of Labor Economics (IZA) for the two best IZA Discussion Papers published in 2021 on the nature and implications of climate change.

The award-winning research addresses the role of social norms, individual preferences, and moral views in fighting climate change. The key finding of this experimental study: Many people contribute little to climate protection because they underestimate the willingness of others to fight global warming. Providing information on prevalent climate norms raises support for climate-friendly policies, particularly among climate-change skeptics [read more].

The second paper selected for the award, “Temperature, Workplace Safety, and Labor Market Inequality” by Jisung Park, Nora Pankratz and Patrick Behrer, illustrates that rising temperatures increase the risk of work injuries at both outdoor and indoor workplaces. Since low-wage earners are disproportionately affected, this may also exacerbate income inequality. This is a prime example of unexpected secondary effects of climate change that deserve further investigation [read more].

Worth 10,000 euros, the newly established IRECC Award recognizes important new insights into the broader, often underestimated consequences of climate change and the effects of environmental policies on society and the labor market. The inaugural IRECC winners “represent the best of modern applied-economics research,” according to the award committee made up of Susana Ferreira (University of Georgia), Andrew Oswald (University of Warwick, IZA) and Hilmar Schneider (IZA).

Behavioral aspects and inequality consequences of climate change are an important part of the briq research agenda. In order to also make our own contribution to limiting global warming, we have reduced our carbon footprint and acquired climate certificates to offset our remaining greenhouse gas emissions from buildings, events, and business travel.

Academic research at an internationally oriented institute like briq strongly relies on the scholarly exchange of thoughts and ideas. Current COVID-19 restrictions aside, regular visits by guest researchers and conference participants from all over the world cause CO2 emissions that cannot be fully avoided.

By implementing a number of targeted measures, including the modernization of our heating and lighting, we have been able to substantially reduce briq’s carbon footprint over the past years. For domestic business trips that cannot be substituted by videoconferencing, the preferred mode of transport is the German railway, whose long-distance trains run on green energy. Employees at briq are incentivized to use public transport for the commute to work and will soon have the option to use job bikes as well. Catering for seminars, workshops, and conferences has been switched to vegetarian meals that can be produced with significantly fewer greenhouse gas emissions than meats.

The remaining CO2 emissions stemming from briq’s business activities, as calculated for the year 2019 and certified by TÜV Rheinland, have been offset through investments in climate protection projects supported by the myclimate foundation. In line with our research focus, we have chosen to invest in projects that also contribute to a reduction of economic and social inequality. These include a project in Kenya enabling women through savings groups to afford an efficient cook stove which reduces the demand for firewood, as well as a project in Myanmar that combines mangrove restoration and women empowerment.

“The COVID-19 pandemic has drawn global attention away from the climate crisis even though climate change will likely pose a far greater threat to humankind. Tackling this huge challenge requires a contribution by everyone, no matter how big or small. By achieving carbon neutrality at briq, we hope to set an example for others to follow suit,” says briq Director Armin Falk.