Context effects and heterogeneity in voluntary carbon offsetting - a choice experiment in Switzerland

Voluntary carbon offsets allow individuals to neutralise the CO2 emissions from their consumption. In a choice experiment among more than a thousand Swiss consumers, we analyse how the propensity to offset varies with consumption contexts and offset project attributes. The adopted latent class model accounts for heterogeneity in consumers' preferences and in their motivations to buy carbon offsets. We find that consumers are not only responsive to project type and quality aspects - such as government certification - but also to the consumption context. Our results suggest that carbon offsets are perceived as differentiated rather than homogeneous goods. Estimating a single willingness to pay measure for offsets, as previous studies have done, may thus be misleading. To complement our analysis, we provide a characterisation of offset customers as well as insights into the relationship between carbon offsetting and other voluntary mitigation behaviour.