Carbon offsets out of the woods? The acceptability of domestic vs. international reforestation programmes

Abstract

Following the entry into force of the Paris Agreement in November 2016, governments around the world are now asked to turn their nationally determined contributions into concrete climate policies. Economic arguments justify implementing carbon pricing to achieve emission abatement targets in a cost-effective way, including the possibility to offset domestic greenhouse gas emissions in foreign countries. However, abating emissions abroad instead of domestically may face important political and popular resistance. We run a lab experiment with more than 300 participants by asking them to choose between a domestic and an international reforestation project. We test the effect of three informational treatments on the allocation of participants' endowment between the domestic and the international project. The treatments consist in: (1) making more salient the cost-effectiveness gains associated with offsetting carbon abroad (2) providing guarantees on the reliability of reforestation programmes (3) stressing local ancillary benefits associated with domestic offset projects. We find that stressing the cost-effectiveness of the reforestation programme abroad is the best way to increase its support, the economic argument in favour of offsetting abroad being largely overlooked by participants. We relate this finding to the recent literature on the drivers of public support for climate policies, generally pointing to a gap between people's preferences and economists' prescriptions.