Willingness to Pay for Carbon Mitigation: Field Evidence from the Market for Carbon Offsets

Abstract This paper estimates willingness to pay (WTP) for carbon mitigation from demand for carbon offsets in a field experiment with an online supermarket. The experiment randomizes whether the firm subsidizes the price of the offset or matches the offset’s impact on carbon mitigation. Consumers are price-elastic but fully impact-inelastic, implying that they buy the offset but their WTP for the carbon it mitigates is zero. If the firm informs consumers that it contributes to the offset costs, WTP increases to 16 EUR/tCO$ {}_{2} $. A complementary survey shows that consumers’ stated WTP is 238 EUR/tCO$ {}_{2} $, far above their revealed preferences.