Essays on the Economics of Climate Action

Abstract

This thesis comprises three chapters, each of them describing an experimental project studying individual action on climate change in the United States.

In the first chapter of my thesis, Hannah Ruebeck and I study whether and how individuals strategically build political movements, focusing on the climate movement in the US. Policy change typically requires bipartisan support in Congress, and bipartisan constituent lobbying might be key to building these legislative coalitions. Recent work in economics shows that political action spreads through networks, so citizens may have externalities on others’ political action and play a role in shaping these citizen coalitions. We use a series of online experiments with 21,000 participants to show three things. First, Democrats, “typical” members of the US climate movement, internalize these externalities and are more likely to email Congress when doing so can inspire others to join them. Next, Democrats are much more likely to try to recruit other Democrats than Republicans, even when they know that all of them believe that climate change is mostly human-caused. Third, this outreach gap is strategic, driven by Democrats' beliefs that cross-party outreach will be relatively ineffective, rather than from a distaste for engaging Republicans in the climate movement. However, widespread affective polarization—dislike of those across the political aisle—still plays an important role here in that Democrats expect cross-party outreach to fail because Republicans will be polarized against them.

In the second chapter of my thesis, Hannah Ruebeck, James Walsh, and I study the role that story-telling can play in shaping political beliefs and engagement. We focus on narratives about policy change, studying how Americans react to information about policy progress and to storytelling about the role that citizen action plays in that policy change. In an online experiment with 6,000 participants, we first show that learning about the policy progress of the Inflation Reduction Act (IRA) somewhat increases political efficacy, or beliefs about government responsiveness to citizen action, but also reduces demand for continuing climate policy. However, pairing information about the IRA with a fictional story that ties policy progress to citizen action yields large increases in political-efficacy beliefs and continuing climate action. We find evidence that storytelling may have strong effects on climate action both because it yields large changes in beliefs and because of its strong emotional effects.

In the final chapter of my thesis, Lisa Ho and I partner with the largest mealkit company in the United States to test the impacts of adding carbon-footprint labels to menus. Food systems account for about one-third of total greenhouse gas emissions, and simple shifts across food choices can yield large cuts in emissions. Menu-based nudges like carbon-footprint labels are an increasingly common tool for encouraging these shifts. In a randomized field experiment with over 200,000 meal kit customers in the US, we find that adding carbon-footprint labels to menus causes customers to choose lower-emission meals, and that the introduction of labels has positive effects on customer retention and company profits. Thus, companies might have incentives to implement green nudges like these.