Perception Effects of Local Government Subsidies: The Case of International Carbon Offsetting by Citizens in Kitakyushu, Japan

Discussion Paper
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This paper examined whether a local government could promote international environmental cooperation through individual citizens’ carbon offsetting, in particular focusing on the perception effects of local government subsidies. The social survey was conducted for adult citizens in Kitakyushu city, Japan, who drive privately-owned vehicles, asking if they pay for offset using carbon credits generated from a hypothetical climate change mitigation project in a developing country. Randomised split sample allocation regarding price and subsidies conditions was applied. The study confirmed not only price effects but perception effects, regarding citizens’ selecting carbon offsetting to offset one ton of carbon dioxide emissions from driving because the local government provided subsidies: Subsidies had both effects of motivation crowding-in and crowding-out for individuals who have specific interests or experiences in developing countries.