Willingness-to-pay for CO2 offsets: A large-scale field study on revealed preferences in the aviation

Abstract

Studies assessing people’s willingness-to-pay for carbon offsets are overwhelmingly grounded in hypothetical stated-preference approaches. Here, we report on a large-scale observational field study involving a final sample of 63,520 bookings made with a European airline, allowing us to gauge willingness-to-pay for offsets in a revealed-preference approach. Our pre-registered study shows that the median willingness-to-pay to voluntarily offset a ton of CO2 from flight-related emissions is zero, with the mean willingness-to-pay being around 1 EUR. Neither prices of the offset nor airfares are predictive of offsetting behavior in a highly powered sample. Climate vulnerability of the destination has no significant impact on the compensation decision either. On the other hand, higher ancillary spending is associated with an increased likelihood to compensate, even though the effect size is low due to the general unwillingness to internalize flight-related emissions. Additionally, we find the choice of a vegetarian meal to be of similar predictive power (significant, but low in effect size given an overall low proportion of passengers choosing a vegetarian meal). Our results inform existing research on stated preferences as well as mitigation efforts relying on voluntary climate action.