Improving Incentives for Local Climate Action

Local climate action cannot be achieved through state regulation alone. Non-state actors such as municipalities, firms, civil society groups, and individual citizens can also make an important contribution, for example, through voluntary engagement, exemplary behaviour and the strengthening of social norms. The NostaClimate research project examines the role that these actors play in climate policy and individual climate protection activities, and how they can help bridge the gap between political climate targets and concrete action at the local level. The project focuses  on identifying which incentives motivate individuals to engage in climate action.

Natural Allies: How Ecosystems Strengthen Local Climate Action in Municipalities

In the context of global climate change, the willingness to engage in local action is gaining importance. Particular attention is being paid to the use and preservation of local natural ecosystems, which, in addition to climate protection, perform a range of important functions in environmental and biodiversity conservation.

Using the example of a local reforestation project in cooperation with the City of Mannheim, an online survey shows that the general public considers natural ecosystems to play a significant role in local climate protection. Willingness to participate in tree donation schemes was significantly higher than willingness to engage in voluntary carbon offsetting through the retirement of certificates from the European Emissions Trading System.

What Municipal Climate Action Means for Citizens

In a follow-up project, we examined how cities and municipalities function as role models in local climate protection. The central idea is that, through their own climate-related activities, local governments can not only demonstrate environmental commitment but also foster individual climate protection efforts among their citizens. 

However, economic theory cautions that this strategy may be less promising than it appears at first glance. Since cities and municipalities finance many of these initiatives through public funds, such efforts may be perceived by citizens as a substitute for their own engagement, potentially crowding out voluntary private contributions to climate protection.

Behavioural economics research, by contrast, suggests that social norms and role models often have a positive effect on individual behaviour. Whether this also applies to municipal climate action remains an open question. To address this, we conducted a field experiment with approximately 500 citizens in Mannheim, examining whether information about the city’s climate protection efforts influences individual donation behaviour.

The results are encouraging: municipal engagement does not crowd out private contributions. However, highlighting the engagement of fellow citizens is more effective as it particularly motivates individuals who have previously assigned lower priority to climate action.

What does this imply for practice? Cities and municipalities should explicitly communicate climate action within the local community. When people learn that their neighbours are engaged in climate protection activities, their own willingness to act increases. This form of communication may be particularly effective in reaching individuals who are less engaged with the topic.