The Impact of Climate Literacy and Financial Literacy on Consumer Willingness to Decarbonise

Consumers’ willingness to decarbonise depends on their understanding of both climate change and financial concepts, though the relationship is complex. We conducted a comprehensive survey with 1,079 representative Australians, aiming to understand how their climate literacy and financial literacy influence behavioural willingness to reduce their carbon footprint. To help answer this question, we created a new, more comprehensive measure of climate literacy. The study revealed that participants’ climate literacy was positively related to their willingness to decarbonise. In contrast, financial literacy was negatively related to their willingness to decarbonise, a relationship that was moderated by climate literacy and environmental values. Both individual and collective efficacy played significant mediating roles in the relationship between climate literacy and willingness to decarbonise, while only individual efficacy was a significant mediator in the relationship between financial literacy and willingness to decarbonise. This research provides a novel understanding of the distinct roles that different types of literacy play in willingness to decarbonise and highlights efficacy as an underlying mechanism.