Andreas Loschel

Abstract:

In this study, the real demand for global and local environmental protection in Beijing/China is investigated. Participants from Beijing were offered the opportunity to contribute to voluntary climate change mitigation by purchasing permits from Chinese CO2 emissions trading schemes (ETS). Purchased permits were withdrawn from the ETS. Since CO2 emissions are inevitably linked to emissions of local pollutants the objective of our study is to disentangle the real demand for global and for local environmental protection. For this purpose, Beijing and Shenzhen ETS permits were offered. The result is that for low prices the demand for Beijing ETS permits is higher than for Shenzhen ETS permits indicating real demand for local environmental protection. Our research identifies the important role of private benefits, with climate change mitigation as an impure public good, in the voluntary provision of public goods and provides first evidence for China.