The combination of social norms and nudges has proven to be a powerful tool for inciting people to adopt pro-environmental behaviors. In this study, we implemented nudges that promote pro-environmental behavior still not explored by behavioral economics: waste composting. In particular, we designed priming and social norm nudges to incite people looking for information about waste composting possibilities. We set up a field experiment with a two-fold purpose. First, remove the barriers towards collective composting in Lyon by using posters related to priming theory with QR Codes that redirect directly to the website of a local association dedicated to environmental actions. Second, these posters created new social norm mechanisms. Since composting is still practiced by only a minority of people in France, the standard way of combining nudges and social norms is insufficient in this context. Here, we focus on descriptive and injunctive norms with local dimensions. These new norms aimed to make the nudge more efficient by increasing the number of scans. We observed that the scans of the posters allowed for a significant increase in the visits to the website over several months, thus improving information about collective waste composting. Although no significant differences were found between social norms treatments, these results show that the QR Code is a promising tool for implementing nudges.
This article was elected by the FAERE jury as the best article by a young economist presented at the FAERE 2023 annual conference.
This paper examines the provision of official flood risk information in the United States and its distributional impacts on residential flood insurance take-up. Assembling all flood maps produced after Hurricane Katrina, I document that updated maps decreased the number of properties zoned in high-risk floodplains and incorrectly omitted five million properties, primarily in neighborhoods with more Black and Hispanic residents. Leveraging the staggered timing of map updates, I estimate they decreased flood insurance take-up and exacerbated racial disparities in insurance coverage. Correcting flood maps could increase welfare by $20 billion annually, but past map updates distorted risk and price signals.
Adrien Desroziers – Yassine Kirat – Arsham Reisinezhad
The “Carbon Curse” theory suggests that fossil fuel richness leads countries to have more carbon intensive development trajectories than they would otherwise. Using causal inference for cross-country panel data spanning 1950-2018, we globally estimate the effect of giant oil and gas discoveries on carbon emissions. Our findings show that the effect is sizable and persistent. Countries that discovered large fossil-fuel fields emit roughly 30% more pollution post-discovery than countries without these discoveries. This effect is stronger in developing countries, and is substantial from the date of the first giant discovery. By exploiting the randomness of the timing of discoveries, we provide the first plausibly-causal evidence in support of the “Carbon Curse”.
Adrien Fabre – Thomas Douenne – Linus Mattauch
We document majority support for policies entailing global redistribution and climate mitigation. Recent surveys on 40,680 respondents in 20 countries covering 72% of global carbon emissions show strong support for an effective way to jointly combat climate change and poverty: a global carbon price funding a global basic income, called the “Global Climate Scheme” (GCS). Using complementary surveys on 8,000 respondents in the U.S., France, Germany, Spain, and the UK, we test several hypotheses that could reconcile strong stated support with a lack of salience in policy
circles. A list experiment shows no evidence of social desirability bias, majorities are willing to sign a real-stake petition, and global redistribution ranks high in the prioritization of policies. Conjoint analyses reveal that a platform is more likely to be preferred if it contains the GCS or a global tax on millionaires. Universalistic attitudes are confirmed by an incentivized donation. In sum, our findings indicate that global policies are genuinely supported by a majority of the population. Public opinion is therefore not the reason that they do not prominently enter political debates.
WP 2023.07 Unpacking the green box: Determinants of Environmental Policy Stringency in European countries
Donatella Gatti – Gaye-Del Lo – Francisco Serranito
This paper identifies the determinants of OECD Environmental Policy Stringency (EPS) index using a panel of 21 European countries for the period 2009-2019. If there is a large literature on the macroeconomic, political, and social determinants of EPS, the people’s attitudes or preferences toward environmental policies is still burgeoning. Thus, the main goal of this paper is to estimate the effects of people’s awareness regarding environmental issues on the EPS indicator. Due to the endogeneity of preferences, we have applied an instrumental variable framework to estimate our empirical model. Our most important result is to show that individual environmental preferences have a positive and significant effect on the level of EPS indicator : on average, a rise in individual preferences of 10% in a country will increase its EPS indicator by 2.30%. Our results have important policy implications.
Behrang Shirizadeh – Philippe Quirion
We model the optimal hydrogen and electricity production and storage mix for France by 2050. Moreover, an iterative calculation method to represent electrolyzer lifetime based on functioning hours in linear programming is developed. We provide a central scenario and study its sensitivity to the cost of electrolyzers, to hydrogen demand and to renewable energy deployment potential. The proportion of electrolysis to methane reforming with CO2 capture and storage in hydrogen production is sensitive to the cost of electrolyzers, with the former providing around 60% in the central scenario. However, the system cost as well as the hydrogen and electricity production costs are much more robust, thanks to the wide feasible near-optimal solutions spectrum. The electricity production mix is almost fully renewable in the central scenario, while nuclear power has a significant role only if the potential of wind & solar limits their deployment, or if CO2 capture and storage is not authorized. Furthermore, exclusion of reformer-based hydrogen from fossil gas with CO22 capture induces negligible additional cost to the hydrogen-electricity coupled system (below 1%). Therefore, in the current European resilience and sovereignty context, a robust low-carbon hydrogen development strategy would be prioritizing green hydrogen to other low-carbon hydrogen supply options.
WP 2023.05 Greening or greenwashing? How consumers’ beliefs influence firms’ advertising strategies on environmental quality
Lucie Bottega – Dorothée Brécard – Philippe Delacote
When consumers have ambiguous beliefs about the green quality of products, firms may be tempted to “greenwash”. The degrees of optimism and confidence of consumers then play a crucial role in firms’ advertising strategies, which can be either informative and/or persuasive. We find conditions under which advertising efforts and environmental quality are substitutes and thus lead to greenwashing.
Guy Meunier – Jean-Pierre Ponssard
The energy transition requires the deployment of risky research and development (R&D) programs, most of which are partially financed by public funding. Recent recovery plans, associated with the COVID-19 pandemic and the energy transition, increased the funding available to finance innovative low-carbon projects and call for an economic evaluation of their allocation. This paper analyzes the potential benefit of using repayable advance: a lump-sum payment to finance the project that is paid back in case of success. The relationship between the state and innovative firms is formalized in the principal agent framework. Investing in an innovative project requires an initial observable capital outlay. We introduce asymmetric information on the probability of success, which is known to the firm but not to the state agency. The outcome of the project, if successful, delivers a private benefit to the firm and an external social benefit to the state. In this context a repayable advance consists in rewarding failure. We prove that it is a superior strategy in the presence of pure adverse selection. We investigate under what conditions this result could be extended in the presence of moral hazard. Implications for green industrial policy are discussed.
Donatella Gatti – Julien Vauday
While environmental values are spreading among societies, they hardly lead to effective political actions. This may be due to an overestimation of the sharing of those values among people, or to a lack of political power of environmentalists vis-à-vis materialist citizens. We propose a theoretical model to investigate these two channels, based on a setup a la Grossman and Helpman (1994), in which lobby is a strategy available to social groups, in order to influence the government on environmental taxes. Because societies have being historically marked by materialist habits, citizens sharing those habits face lower costs when getting organized. By considering endogenous lobby formation a la Mitra (1999), we show that, in order for environmental and materialist lobbies to coexist, the society must be mixed enough. Based on a dynamic framework a la Besley and Persson (2023), we investigate how social values change over time. Whenever lobbying by materialists prevails, a unique social equilibrium exists, featuring a stable hegemony by materialist values. If environmentalists get organized too, a second social equilibrium emerges, that is locally stable and more favorable to them. However, the threshold might be very high, above which the cultural transition effectively takes off. By calibrating the model, we study counter-acting forces allowing to improve the odds of the environmental transition, such as cultural mutations, social-signaling, and lowering organizational costs. Finally, we provide policy implications.
Lesly Cassin – Aurélie Méjean – Stéphane Zuber
In the context of climate change, migration can be considered as an adaptation strategy to reduce populations’ exposure to climate damages. Those damages are very heterogeneous across regions. In this paper, we study migration induced by climate change damages. To do so, we estimate the socio-economic determinants of migration, focusing on economic damages. We then model endogenous migration in an integrated assessment model based on those estimates. We highlight the importance of the heterogeneity of the damages distribution to explain migration fows due to climate change. We find that high levels of climate damages globally do not necessarily induce large climate migration. Rather, large differences in exposure between regions may lead to substantial migration.
WP 2023.01 Internal Migration and Energy Poverty
Johanna Choumert-Nkolo – Leonard le Roux
This paper presents a first analysis of the relationship between rural-urban migration and energy poverty in South Africa, and to the authors’ knowledge in Africa, using a nationally representative panel dataset. Using a dynamic difference in differences approach, energy poverty changes for both migrants and non-migrants are tracked over a ten-year period from 2008 to 2017. On average, moving to urban areas results in reductions in energy poverty for migrants themselves, with especially dramatic reductions in the use of traditional cooking fuels. Roughly one in five new urban arrivals move into informal shack dwellings where initial gains in energy access are negligible, but even for these migrants, the gains from migration grow over time. Effects on households, differences between male and female migrants, and other amenitities are also explored.