IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v73y2019i3d10.1007_s10640-018-0301-5.html
   My bibliography  Save this article

Does Absolution Promote Sin? A Conservationist’s Dilemma

Author

Listed:
  • Matthew Harding

    (University of California - Irvine)

  • David Rapson

    (University of California - Davis)

Abstract

This paper shows that households signing up for a green program exhibit an intriguing behavioral rebound effect: a promise to fully offset customers’ carbon emissions resulting from electricity usage increases their energy use post-adoption by 1–3%. The response is robust across empirical specifications, and is consistent with an economic model of rational energy consumption. Our results provide a cautionary tale for designing green product strategies in which the adoption of a product may lead to unexpected consequences.

Suggested Citation

  • Matthew Harding & David Rapson, 2019. "Does Absolution Promote Sin? A Conservationist’s Dilemma," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 923-955, July.
    • Handle: RePEc:kap:enreec:v:73:y:2019:i:3:d:10.1007_s10640-018-0301-5
    DOI: 10.1007/s10640-018-0301-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-018-0301-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-018-0301-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
    2. Stefano DellaVigna & John A. List & Ulrike Malmendier, 2012. "Testing for Altruism and Social Pressure in Charitable Giving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 1-56.
    3. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    4. Jacobsen, Grant D. & Kotchen, Matthew J. & Vandenbergh, Michael P., 2012. "The behavioral response to voluntary provision of an environmental public good: Evidence from residential electricity demand," European Economic Review, Elsevier, vol. 56(5), pages 946-960.
    5. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, April.
    6. Jacobsen, Grant D., 2011. "The Al Gore effect: An Inconvenient Truth and voluntary carbon offsets," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 67-78, January.
    7. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
    8. Litvine, Dorian & Wüstenhagen, Rolf, 2011. "Helping "light green" consumers walk the talk: Results of a behavioural intervention survey in the Swiss electricity market," Ecological Economics, Elsevier, vol. 70(3), pages 462-474, January.
    9. Kenneth Gillingham & David Rapson & Gernot Wagner, 2016. "The Rebound Effect and Energy Efficiency Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(1), pages 68-88.
    10. Felix Ebeling & Sebastian Lotz, 2015. "Domestic uptake of green energy promoted by opt-out tariffs," Nature Climate Change, Nature, vol. 5(9), pages 868-871, September.
    11. Dora L. Costa & Matthew E. Kahn, 2013. "Energy Conservation “Nudges” And Environmentalist Ideology: Evidence From A Randomized Residential Electricity Field Experiment," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 680-702, June.
    12. J. W. Bolderdijk & L. Steg & E. S. Geller & P. K. Lehman & T. Postmes, 2013. "Comparing the effectiveness of monetary versus moral motives in environmental campaigning," Nature Climate Change, Nature, vol. 3(4), pages 413-416, April.
    13. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August.
    14. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    15. Baker, Justin Scott & McCarl, Bruce A. & Murray, Brian C. & Rose, Steven K. & Alig, Ralph J. & Adams, Darius M. & Latta, Gregory S. & Beach, Robert H. & Daigneault, Adam J., 2010. "Net Farm Income and Land Use under a U.S. Greenhouse Gas Cap and Trade," Policy Issues 93683, Agricultural and Applied Economics Association.
    16. Harding, Matthew & Lamarche, Carlos, 2011. "Least squares estimation of a panel data model with multifactor error structure and endogenous covariates," Economics Letters, Elsevier, vol. 111(3), pages 197-199, June.
    17. M. Hashem Pesaran, 2006. "Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure," Econometrica, Econometric Society, vol. 74(4), pages 967-1012, July.
    18. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, April.
    19. Kotchen, Matthew J. & Moore, Michael R., 2007. "Private provision of environmental public goods: Household participation in green-electricity programs," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 1-16, January.
    20. Tristan Brown & Amani Elobeid & Jerome Dumortier & Dermot J. Hayes, 2010. "Market Impact of Domestic Offset Programs," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 10-wp502, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    21. Susan Clayton & Patrick Devine-Wright & Paul C. Stern & Lorraine Whitmarsh & Amanda Carrico & Linda Steg & Janet Swim & Mirilia Bonnes, 2015. "Psychological research and global climate change," Nature Climate Change, Nature, vol. 5(7), pages 640-646, July.
    22. Manski, Charles F & Lerman, Steven R, 1977. "The Estimation of Choice Probabilities from Choice Based Samples," Econometrica, Econometric Society, vol. 45(8), pages 1977-1988, November.
    23. repec:feb:framed:0087 is not listed on IDEAS
    24. Graff-Zivin, Joshua & Lipper, Leslie, 2008. "Poverty, risk, and the supply of soil carbon sequestration," Environment and Development Economics, Cambridge University Press, vol. 13(3), pages 353-373, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stehr, Frauke & Werner, Peter, 2021. "Making Up for Harming Others — An Experiment on Voluntary Compensation Behavior," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242396, Verein für Socialpolitik / German Economic Association.
    2. Galvin, Ray & Dütschke, Elisabeth & Weiß, Julika, 2021. "A conceptual framework for understanding rebound effects with renewable electricity: A new challenge for decarbonizing the electricity sector," Renewable Energy, Elsevier, vol. 176(C), pages 423-432.
    3. Fikru, Mahelet G. & Canfield, Casey, 2022. "Demand for renewable energy via green electricity versus solar installation in Community Choice Aggregation," Renewable Energy, Elsevier, vol. 186(C), pages 769-779.
    4. Simon Mathex & Lisette Ibanez & Raphaële Préget, 2023. "Distinguishing economic and moral compensation in the rebound effect: A theoretical and experimental approach," Post-Print hal-04217073, HAL.
    5. Fikru, Mahelet G. & Canfield, Casey, 2024. "Choosing both/and: Encouraging green energy purchases in community choice aggregation," Energy Policy, Elsevier, vol. 185(C).
    6. Ahundjanov, Behzod B. & Noel, Michael D., 2021. "What’s in a name? The incidence of gasoline excise taxes versus gasoline carbon levies," International Journal of Industrial Organization, Elsevier, vol. 76(C).
    7. Stojanovski, Ognen & Leslie, Gordon W. & Wolak, Frank A. & Huerta Wong, Juan Enrique & Thurber, Mark C., 2020. "Increasing the energy cognizance of electricity consumers in Mexico: Results from a field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 102(C).
    8. Lin, Boqiang & Zhu, Penghu, 2021. "Has increasing block pricing policy been perceived in China? Evidence from residential electricity use," Energy Economics, Elsevier, vol. 94(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Conte, Marc N. & Jacobsen, Grant D., 2016. "Explaining Demand for Green Electricity Using Data from All U.S. Utilities," Energy Economics, Elsevier, vol. 60(C), pages 122-130.
    2. Jacobsen, Grant D. & Kotchen, Matthew J. & Vandenbergh, Michael P., 2012. "The behavioral response to voluntary provision of an environmental public good: Evidence from residential electricity demand," European Economic Review, Elsevier, vol. 56(5), pages 946-960.
    3. Arnab Mitra & Michael R. Moore, 2018. "Green Electricity Markets as Mechanisms of Public-Goods Provision: Theory and Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 45-71, September.
    4. Delgado, Michael S. & Harriger, Jessica L. & Khanna, Neha, 2015. "The value of environmental status signaling," Ecological Economics, Elsevier, vol. 111(C), pages 1-11.
    5. Grant Jacobsen & Matthew Kotchen & Greg Clendenning, 2013. "Community-based incentives for environmental protection: the case of green electricity," Journal of Regulatory Economics, Springer, vol. 44(1), pages 30-52, August.
    6. Tiefenbeck, Verena & Staake, Thorsten & Roth, Kurt & Sachs, Olga, 2013. "For better or for worse? Empirical evidence of moral licensing in a behavioral energy conservation campaign," Energy Policy, Elsevier, vol. 57(C), pages 160-171.
    7. Massimiliano Mazzanti & Valeria Costantini & Susanna Mancinelli & Massimilano Corradini, 2011. "Environmental and Innovation Performance in a Dynamic Impure Public Good Framework," Working Papers 201117, University of Ferrara, Department of Economics.
    8. Kesternich, Martin & Löschel, Andreas & Römer, Daniel, 2016. "The long-term impact of matching and rebate subsidies when public goods are impure: Field experimental evidence from the carbon offsetting market," Journal of Public Economics, Elsevier, vol. 137(C), pages 70-78.
    9. Lange, Andreas & Schwirplies, Claudia & Ziegler, Andreas, 2017. "On the interrelation between the consumption of impure public goods and the provision of direct donations: Theory and empirical evidence," Resource and Energy Economics, Elsevier, vol. 47(C), pages 72-88.
    10. Dagher, Leila & Bird, Lori & Heeter, Jenny, 2017. "Residential green power demand in the United States," Renewable Energy, Elsevier, vol. 114(PB), pages 1062-1068.
    11. Anna Alberini, Markus Bareit and Massimo Filippini, 2016. "What is the Effect of Fuel Efficiency Information on Car Prices? Evidence from Switzerland," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    12. Alberini, Anna & Bigano, Andrea, 2015. "How effective are energy-efficiency incentive programs? Evidence from Italian homeowners," Energy Economics, Elsevier, vol. 52(S1), pages 76-85.
    13. Moore, Michael R. & Lewis, Geoffrey McD. & Cepela, Daniel J., 2010. "Markets for renewable energy and pollution emissions: Environmental claims, emission-reduction accounting, and product decoupling," Energy Policy, Elsevier, vol. 38(10), pages 5956-5966, October.
    14. Schubert, Christian, 2017. "Green nudges: Do they work? Are they ethical?," Ecological Economics, Elsevier, vol. 132(C), pages 329-342.
    15. Carattini, Stefano & Blasch, Julia, 2024. "Nudging when the descriptive norm is low: Evidence from a carbon offsetting field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).
    16. Grischa Perino, 2015. "Climate Campaigns, Cap and Trade, and Carbon Leakage: Why Trying to Reduce Your Carbon Footprint Can Harm the Climate," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(3), pages 469-495.
    17. Simon Mathex & Lisette Ibanez & Raphaële Préget, 2023. "Distinguishing economic and moral compensation in the rebound effect: A theoretical and experimental approach," Post-Print hal-04217073, HAL.
    18. Stehr, Frauke & Werner, Peter, 2021. "Making Up for Harming Others — An Experiment on Voluntary Compensation Behavior," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242396, Verein für Socialpolitik / German Economic Association.
    19. Anna Alberini & Markus Bareit & Massimo Filippini, 2014. "Does the Swiss Car Market Reward Fuel Efficient Cars? Evidence from Hedonic Pricing Regressions, a Regression Discontinuity Design, and Matching," Working Papers 2014.16, Fondazione Eni Enrico Mattei.
    20. Blasch, Julia & Ohndorf, Markus, 2015. "Altruism, moral norms and social approval: Joint determinants of individual offset behavior," Ecological Economics, Elsevier, vol. 116(C), pages 251-260.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:73:y:2019:i:3:d:10.1007_s10640-018-0301-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.