Consumers more likely to pay carbon fee for air travel when labeled as an ‘offset’

Flying is one of the single highest-emission activities most people engage in. A recent study from UBC's Sauder School of Business looked at how to make consumers amenable to an additional carbon fee for plane tickets.

David Hardisty, an assistant professor of marketing and behavioural science at the Sauder School, and Alec Beall, a postdoctoral researcher in the faculty of psychology, explored this concept in their study “A carbon price by another name may seem sweeter: Consumers prefer upstream offsets to downstream taxes.”

The study examined 1,800 American participants as they planned hypothetical purchases for flights.

Individuals who got a description of the carbon fee in their flight pricing details of a “carbon offset on aviation fuel production and importation” consistently preferred to spend $14 on carbon fees.

When it was described as a “carbon tax on airplane travel and cargo,” however, consumers were less likely to pay the $14 fee. The subtle difference in descriptions in the two scenarios creates a sense of accountability for the source of services (the producers) versus the user of services (the consumers), respectively.

With climate concerns at an all time high, the aviation industry is brainstorming methodologies for mitigating climate damage in a way that their consumers would support. This study helps to shed light on the behavioral responses of consumers in reaction to carbon emission taxation.

The applications of the study become a little more complicated when expanded to the real world. Political implications and biases, notions of taxes or offset charges being a misuse of middle-class money and a general desire not to pay any extra fees all act as tentative roadblocks when transitioning the knowledge from the study into real-world policies.

According to the authors, the next step in refining the findings of this study would be to conduct it with the real purchase of tickets, not just a hypothetical set-up for a study, and within various countries to assess demographic behavioural responses.

When asked if the results of the study would hold in real life, Hardisty noted that “while there may be a main effect — i.e. fewer people overall choose the offset option — the ‘offset’ language would still be preferred over the ‘tax’ as it still appears to be the more positive effect-inducing, responsible option.”

In the real world, cultural associations and popular political opinions of the demographic being analyzed might result in variations in the numerical results.

Regardless, the key point of this particular study is the distinction between upstream versus downstream. If offsetting is done right — without cutting corners and truly removing the amount of carbon one injects — consumers are very likely to support a concept which holds parties responsible and creates a notion of positive, forward-thinking solutions.

This idea of creative, sustainable consumer policy is expandable to nearly all existing industries and holds true potential in strengthening climate action and maximizing societal benefit — all through the power of positivity and language.