TREATMENT EFFECTS OF CLIMATE CHANGE RISK ON MITIGATION AND ADAPTATION BEHAVIOUR IN AN EXPERIMENTAL SETTING*

Abstract

Abstract This paper explores the collective action problem as it relates to climate change and develops two models that capture the mitigation–adaptation trade‐off. The first model presents climate change as a disaster that will occur with certainty, and where both mitigation and adaptation reduce the size of the loss associated with the disaster (the so‐called deterministic model). The second model presents climate change as an uncertain event, where mitigation affects the probability of disaster while adaptation again reduces the size of the loss (this is the so‐called stochastic model). Comparing the two models in a one‐shot public goods experiment with students, we find no significant differences in subjects' choice to mitigate. The experiments also reveal a relatively low rate of mitigation for both models compared with earlier studies.