It has been postulated that personal experience of climate change-related weather events may reduce the psychological distance to climate change and trigger engagement in climate protection measures. We use a novel longitudinal dataset on revealed household behavior and insured damage data to re-examine this relationship, which has mostly been studied by cross-sectional and self-reported data. Using a difference-in-differences estimator, we assess the causal effect of experiencing financial damage from the 2013 floods in Germany on the interest for renewable energy tariffs in online power portals, which we take as a proxy for engagement in climate protection. The results broadly confirm the expected positive effect of flood experience on climate engagement, but there are important non-linear effects. Most notably, the effect drops to zero if damage is very high meaning the causal effect of flood experience on interest in green energy holds only for moderately affected regions. One explanation for this inverted U-shaped effect is that high flood damage may constrain the available budget for costly climate protection, due to high recovery and reconstruction costs. We also suggest a number of psychological mechanisms that may play a role in explaining this non-linear effect, for example non-protective responses such as denial and fatalism if damage is high. When supporting private climate engagement, policymakers should not rely on a motivating effect of damage experience, but should acknowledge the economic and psychological limitations, especially of severely flood-affected households.

Authors

Osberghaus, Daniel
Demski, Christina

Keywords

Climate protection; Difference in differences; Floods; Green energy; Panel data