Sobriety in terms of consumerism, energy consumption or traveling is certainly the most efficient manner to reduce one’s carbon footprint. However, people and companies both have trips and expenses that are unavoidable in concrete terms. As a result, initiatives have emerged for travelers to compensate for their carbon footprint.
Whether it's for personal vacation or a business meeting, travelling remains an essential part of life for many people and companies. "Our study focused on voluntary compensation for trips that people considered unavoidable (both personal and business-related). Although air transport accounts for 2% of human CO2 emissions, it was the fastest growing sector before the Covid crisis," explains Joachim Schleich, a professor and researcher in the department of management & technology at Grenoble Ecole de Management. "We looked at compensation for air and bus travel. We also analyzed factors such as business versus private trips and household characteristics."
Willingness to pay
Willingness to pay, or WTP, is the concept that travellers are willing to pay a surcharge in order to offset the carbon footprint created by their trip. "Compensation projects include local and international projects that can be in a variety of fields such as forestry or renewable energy. The surcharge paid by travellers provides funding for a carbon-saving project," adds Joachim. "This concept is not widely known for the moment, but it is growing in importance. There are also institutions that work to certify the quality of these initiatives so that consumers can choose projects that will have a real impact."
A positive perspective on WTP
The study carried out by Joachim and his colleagues highlighted that people generally have a positive view of such initiatives and their WTP is rather high. "Between ⅔ and ¾ of study participants were willing to pay for compensation services. The ratio varied according to whether they were traveling by bus, train or plane. This is probably due to the fact that compensation for a plane trip (around 10-15 euros for a roundtrip Grenoble-Berlin) is more expensive than for a bus trip (around 1-2 euros)," shares Joachim. The researchers found that WTP was also higher for younger generations, higher incomes and participants with stronger environmental ethics. "Participants also preferred to support forestry projects and local projects. We also varied the study by including the possibility of matching by the travel provider (none, 33% and 100%). Unsurprisingly, the willingness to pay increased if the provider was willing to match."
While the study found strong support for these initiatives, real-world participation is currently much lower. "This is probably due to two factors: first, our study required only hypothetical participation. And second, these initiatives are still relatively unknown to the general public. Although our study was carried out in Germany, our findings could be similar in many European countries. As a result, there are interesting policy implications for both governments and companies. For the moment, few institutions and businesses offset the carbon footprint generated by their employees' trips. But with strong support for this type of initiative, it would be interesting for more companies and governments to implement such policies," concludes Joachim.