Research suggests novice designers find it challenging to integrate social context into engineering design. This challenge could be pronounced in sustainable design because the effects of climate change are perceived to be psychologically distant, which inhibits active engagement in sustainable behavior. However, prior work assesses psychological distance as an aggregate of its various subcomponents (e.g., temporal, social, spatial, and hypothetical). Limited research has explored how these components vary based on the socio-spatial context of the problem. Additionally, empathy development could be an effective mechanism to bridge psychological distance. However, little is known about the impact of empathy-focused problem formulation on student perceptions. We studied students' perceptions of problem formulations in a 2×2 factorial between-subjects experiment. The problems varied in (1) their socio-spatial context and (2) their empathy-focus. We measured the students' perceptions of the problem formulations using: (1) perceived psychological distance and (2) perceived empathic response. We find that participants reported the problem contextualized in India to be a more immediate threat compared to the one in the USA. Moreover, we find no significant differences in the other components of psychological distance or empathic response between the problem variants. This finding suggests that participants perceive environmental issues as currently affecting people in other parts of the world, and not themselves, but only from a temporal lens. These findings call for educators to carefully consider temporal framing when using socio-spatially far sustainable design problems as a lack of consideration could create faulty perceptions.