Climate Economics with Arvid Viaene
A research-focused podcast on the economics of climate change and air pollution. Episodes are released every two weeks on Tuesday at 6 am CET. Episodes will be either expert interviews or solo explorations of key issues. Hosted by Dr. Arvid Viaene, a climate economist with a PhD from the University of Chicago. He has done research on the impacts of climate change on agriculture and mortality. His research on climate-related mortality has been published in The Quarterly Journal of Economics, and he has advised the European Commission on the impacts of climate policy on firm competitiveness.
Climate Economics with Arvid Viaene
#20 Dr. Matthias Rodemeier - Willingness to Pay for Carbon Mitigation: Evidence from 250.000 Consumers
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Voluntary carbon offsets are often discussed on the supply side—quality, additionality, adverse selection. In this episode, we go to the demand side: what do people actually pay for carbon mitigation when it shows up as a real choice at checkout?
My guest is Matthias Rodemeier (Assistant Professor of Finance, Bocconi University), co-author of the paper “Willingness to Pay for Carbon Mitigation: Field Evidence from the Market for Carbon Offsets.” Using a large-scale field experiment with a German online supermarket, the team randomised the price and impact of a delivery-offset option across ~250,000 consumers.
We unpack a striking result: consumers are price elastic (lower price → more take-up) but initially impact inelastic(higher CO₂ mitigation → no change in demand). Then we dig into what changes that—learning over repeated exposure and, importantly, firm participation (subsidies vs matching contributions).
What we cover
- The checkout experiment: what exactly was randomised, and why this design identifies willingness to pay from revealed preferences
- Price elastic, impact inelastic: why “more mitigation for the same price” doesn’t move demand (at first)
- Warm glow vs valuation under frictions: how scope insensitivity can be about preferences and comprehension
- Learning effects: repeated exposure helps consumers map “kg of CO₂” into meaningful comparisons
- Converting results into the policy unit: ~€13–€16 per ton of CO₂ (with learning and firm participation)
- Subsidy vs match: why matching can be more cost-effective than simply making offsets cheaper
- Survey vs real choices: hypothetical willingness to pay can exceed revealed willingness to pay by an order of magnitude
- Policy implications: voluntary markets as complements, not substitutes, for regulation—and what this implies for greenwashing incentives
Related episodes: If you want the supply-side backdrop on offsets, see Episode 4 (Ben Probst) and Episode 17 (Beatriz Granziera).
About the guest
Matthias Rodemeier is Assistant Professor of Finance at Bocconi University. His research sits at the intersection of behavioural economics and public finance, with a focus on environmental policy, taxation, and household finance—often using field experiments with private and public organisations.
For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com