A view of the wing of an airplane through the lens of green economics.

Stefano Carattini, Haute école de gestion Genève and Grantham Research Institute on Climate Change and the Environment, LSE

Alessandro Tavoni, Grantham Research Institute on Climate Change and the Environment, LSE

Economists study many issues. Sometimes, economists study economists. Our recent study analyzes the behavior of economists travelling to conferences, and in particular their demand for carbon offsets. This work focuses on ecological and environmental economists, arguably the experts when it comes to the use of carbon offsets. It assesses for instance how the “greenness” of ecological and environmental economists may depend on their possibility to pass on the cost of this “greenness” to their institution. The ability to pass on this cost is however not a sufficient condition for offsetting. Experts express strong practical, and ethical, reservations to the use of carbon offsets. Only when the offsetting program is considered as sufficiently sound, is offsetting likely to take place.

Hot research

Academics travel. Presenting at conferences and in seminars at host institutions is an inherent part of an academic job. With the increased concern on the impacts of climate change, a recent debate has emerged on the “carbon footprint” of academic activities, in particular among the researchers involved with environmental issues and urging (others) to reduce the world’s emissions. As a result, institutions and professional associations have started to quantify the carbon footprint associated with their activities. Some academics have moved a step further, calling for less travelling from their fellow researchers. Some research groups have obtained some notoriety, spending weeks to reach conferences by bicycle, “cycling the talk”. For those that prefer to keep flying, in recent years an increasing number of conferences have offered the possibility to offset their emissions while registering for the event.

So easy to offset

It is common wisdom that it is currently very cheap to offset greenhouse gas emissions. It is even cheaper when the cost can be passed on to one’s institution. When offsets are purchased through the conference websites, academics are billed just once. At once, they are billed for the proper conference registration, perhaps for some optative networking events, and for the offsets. Yet, studies on conference offsetting suggest that not all researchers use this option to offset their emissions.

So efficient to offset

From an economic perspective, it makes perfect sense to offset one’s greenhouse gas emissions, as long as one’s marginal benefit from polluting (e.g. travelling to a conference) is higher than the marginal cost of greenhouse gas abatement. In other terms, why should I not travel if I can pay you (possibly in a cheap developing country) to plant a few trees and compensate my emissions?

So wrong to offset

The use of offset is however much debated. Recent scandals related with the main compensating tools of the Kyoto Protocol, the Clean Development Mechanism and especially the Joint Implementation, have raised some suspicion on the effective realization of greenhouse gas abatements. Many practical reservations have been raised, and not all products on the offset market are able to address them. Furthermore, the use of offsets has become questionable from an ethical perspective. First, many environmentalists tend to oppose what is usually called the “commodification” of nature. Second, because it justifies a high emissions type of behavior. No behavioral change is driven by the purchase of offsets, this critique assumes, and thus offsets simply represent the modern equivalent of medieval indulgences, by allowing individuals to purchase “salvation” from the guilt of polluting.

Economists know it better

Economists know the public good properties of climate change mitigation. They know about free riding, on the climate or on their institution. And they know how offsets (do not) work. If we were to study “experts”, then we should study “green” economists.

Hence we study the offsetting behavior of ecological and environmental economists at their respective European conferences. Both groups were given the chance to offset their emissions during the registration process. We obtain official data from the conference organizers on the adoption of carbon offsets, and administer a survey to each participant to know the reasons for their (non-)adoption. We collect data on travelling patterns, professional characteristics, and ethical and practical reservations towards the use of offsets in general terms.

Offsetting, but how?

We find that having the conference expenses and offsets covered by the institution strongly increases the probability of offset adoption. However, ecological and environmental economists express important concerns to the use of offsets, of either practical or ethical order (or both). Hence, how the offsetting takes place becomes a crucial element for the purchase of offsets. A sufficiently high level of satisfaction with the proposed offsetting program is then a necessary requirement for economists expressing practical reservations to participate in offsetting activities (see again the full paper for all the details).

Some lessons

The market for carbon offsets has rapidly expanded in the last decade. Yet, it remains a niche market. While many people travelling for business could purchase carbon offsets and seemingly pass on their cost to the employer, most do not. Suspicion about the effectiveness of such instruments seems to be relatively widespread, and may not only influence the market for voluntary offsets but also the decisions of policy-makers concerning the implementation of the Paris Agreement’s article 6. Economists also share these concerns. However, they may also know how to recognize reliable offsetting programs. Hence, we argue that economists’ ability to skim among offsetting programs should be put at the service of society, to orient policy-makers and increase confidence in sound offsetting.

Photo credit: George Alexander/Flickr


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