Accelerating CO2-Emission Reductions via Corporate Programmes; Analysis of an Existing Corporate Programme

This working paper analyzes and assesses the COYou2 Program of the company Swiss Re. This corporate program allows employees to claim subsidies for the realization of various activities reducing their energy consumption and CO2-emissions at home. Examples of such activities are the purchase of a hybrid car, energy efficient building renovation, or the installation of photovoltaic panels. We find that the uptake of such subsidies is very popular among employees. The three main reasons for this are that 1) activities are well communicated and participation and uptake of subsidies is simple and non-bureaucratic, 2) offered emission reduction activities very much fit the profile and needs of employees, and 3) financial incentives are substantial and thus motivating to realize those activities. Yet, we also show that a large share of emission reduction activities would have been realized also without the extra incentive, which calls into question the additionality of many emission reductions. We therefore suggest that in order to ensure additionally of emission reductions in employees’ households, corporate programs may focus on subsidizing activities and green technologies which are not yet widespread. For example, activities such as highly efficient gasoline and diesel cars as well as carpooling have a high potential to reduce CO2-emissions and may be included in such corporate programs

Prospect theory, mitigation and adaptation to climate change

Climate change is one of the most pressing challenges in current environmental policy. Appropriate policies intended to stimulate efficient adaptation and mitigation should not exclusively rely on the assumption of the homo oeconomicus, but take advantage of well-researched alternative behavioural patterns. Prospect theory provides a number of climate-relevant insights, such as the notion that evaluations of outcomes are reference dependent, and the relevance of perceived certainty of outcomes. This paper systematically reviews what prospect theory can offer to analyse mitigation and adaptation. It is shown that accounting for reference dependence and certainty effects contributes to a better understanding of some well-known puzzles in the climate debate, including (but not limited to) the different uptake of mitigation and adaptation amongst individuals and nations, the role of technical vs. financial adaptation, and the apparent preference for hard protection measures in coastal adaptation. Finally, concrete possibilities for empirical research on these effects are proposed

Carbon Pricing in Climate Policy: Seven Reasons, Complementary Instruments, and Political Economy Considerations

Carbon pricing is a recurrent theme in debates on climate policy. Discarded at the 2009 COP in Copenhagen, it remained part of deliberations for a climate agreement in subsequent years. As there is still much misunderstanding about the many reasons to implement a global carbon price, ideological resistance against it prospers. Here, we present the main arguments for carbon pricing, to stimulate a fair and well-informed discussion about it. These include considerations that have received little attention so far. We stress that a main reason to use carbon pricing is environmental effectiveness at a relatively low cost, which in turn contributes to enhance social and political acceptability of climate policy. This includes the property that corrected prices stimulate rapid environmental innovations. These arguments are underappreciated in the public debate, where pricing is frequently downplayed and the erroneous view that innovation policies are sufficient is widespread. Carbon pricing and technology policies are, though, largely complementary and thus are both needed for effective climate policy. We also comment on the complementarity of other instruments to carbon pricing. We further discuss distributional consequences of carbon pricing and present suggestions on how to address these. Other political economy issues that receive attention are lobbying, co-benefits, international policy coordination, motivational crowding in/out, and long-term commitment. The overview ends with reflections on implementing a global carbon price, whether through a carbon tax or emissions trading. The discussion goes beyond traditional arguments from environmental economics by including relevant insights from energy research and innovation studies as well

Legal responses to climate change induced loss and damage

Legal issues are central to ongoing debates on Loss and Damage associated with climate change impacts and risks (L&D). These debates shed light, in particular, on the remedial obligations of actors most responsible for causing climate change towards those most affected by its adverse impacts. The aim of this chapter is to take stock of the legal literature on the topic, to identify potential legal approaches to L&D, identify challenges and to explore possible directions for further research. It looks at the feasibility of private and administrative climate change litigation while providing examples from around the world. Subsequently, we explore how human rights issues have been applied in international law to address L&D. The discussion particularly addresses the question whether the no-harm rule can be applied to climate change and would in fact trigger legal responsibility for greenhouse gas emissions. In addition, we examine relevant legal actions with relevance for L&D taken under the UNFCCC and the Warsaw International Mechanism on Loss and Damage. The chapter concludes with a synopsis of the various legal responses to L&D highlighting their premises, specific challenges and proposed remedies

Evolution of Marine Organisms under Climate Change at Different Levels of Biological Organisation

Research to date has suggested that both individual marine species and ecological processes are expected to exhibit diverse responses to the environmental effects of climate change. Evolutionary responses can occur on rapid (ecological) timescales, and yet studies typically do not consider the role that adaptive evolution will play in modulating biological responses to climate change. Investigations into such responses have typically been focused at particular biological levels (e.g., cellular, population, community), often lacking interactions among levels. Since all levels of biological organisation are sensitive to global climate change, there is a need to elucidate how different processes and hierarchical interactions will influence species fitness. Therefore, predicting the responses of communities and populations to global change will require multidisciplinary efforts across multiple levels of hierarchy, from the genetic and cellular to communities and ecosystems. Eventually, this may allow us to establish the role that acclimatisation and adaptation will play in determining marine community structures in future scenarios

Bounded rationality and social interaction in negotiating a climate agreement

An agreement on climate change mitigation hinges on large-scale international cooperation. Rational agents are supposed to consider the cost and benefits of cooperation, which then determine their negotiation positions. Behavioral economics provides experimental evidence that decision-making in negotiation-like situations is influenced by systematic cognitive biases and social interaction. In this paper, we examine the impact of bounded rationality and social preferences on bargaining in international climate negotiations and illustrate how particular deviations from full rationality affect the incentives to cooperate. Of special interest are fairness preferences for burden-sharing rules and behavioral responses to different framings of climate change and policy, as well as implications of these for communication about climate change. The analysis will further address different levels of representation, including individual citizens, politicians, experts, and (professional) negotiators. The consequences of the most prominent nonstandard preferences and biases for negotiating a climate treaty are assessed, and specific strategies to foster cooperation are suggested. © 2012 Springer Science+Business Media B.V

Towards a fair, constructive and consistent criticism of all valuation languages: Comment on Kallis et al. (2013)

We provide critical notes to the paper by Kallis et al. (2013) on monetary valuation. We evaluate the four criteria they propose for assessing valuation studies. We argue that no clear distinction is made between monetary valuation and pricing instruments. The selected criteria are more relevant to assessing policy than monetary valuation. The examples provided are not representative of the diversity of valuation studies encountered in the literature. Moreover, no clear examples are provided of where valuation and associated cost-benefit analysis of environmental policy go wrong. We plea for a more fair, constructive and consistent criticism of all "valuation languages" and offer relevant issues for consideration

Do carbon footprint labels promote climatarian diets? Evidence from a large-scale field experiment

We estimate the causal effect of carbon footprint labels on individual food choices and quantify potential carbon emission reductions, using data from a large-scale field experiment at five university cafeterias with over 80,000 individual meal choices. Results show that carbon footprint labels led to a decrease in the probability of selecting a high-carbon footprint meal by approximately 2.7 percentage points with consumers substituting to mid-carbon impact meals. We find no change in the market share of low-carbon meals, on average. The reduction in high-carbon footprint meals is driven by decreases in sales of meat meals while sales of mid-ranged vegan, vegetarian and fish meals all increased. We estimate that the introduction of carbon footprint labels was associated with a 4.3% reduction in average carbon emissions per meal. We contrast our findings with those from nudge-style interventions and discuss the cost-effectiveness of carbon footprint labels. Our results suggest that carbon footprint labels present a viable and low-cost policy tool to address information failure and harness climatarian preferences to encourage more sustainable food choices.We acknowledge financial support by the Economic and Social Research Council (ESRC) and Corpus Christi College, Cambridge for one of the authors