Lecture 15

Climate Change and the Individual: Research Kick-off Summary

Byeong-Hak Choe
bchoe@geneseo.edu

SUNY Geneseo

November 24, 2025

đŸŒ± The Role of the Individual

“We are not powerless. But we are not alone, either.”
We are not just consumers — we are co-creators of systems.

🌐 Why Systemic Change Is Essential

  • Climate change is driven by systems, not just individual choices: energy grids, transport, buildings, food, trade.
  • These systems are shaped by laws, markets, institutions, and infrastructure.
  • Individuals face lock-in: limited options, high switching costs, default high-carbon choices.
  • Systemic change means changing:
    • Rules & incentives (policy, pricing, standards)
    • Technologies & infrastructure (grids, transit, housing)
    • Norms (what is seen as “normal” or acceptable)
  • Individual action matters most when it pushes on these systems — through voting, work, and communities.

→ The goal is not just “better personal choices,” but better systems that make low-carbon choices the easy default.

đŸš« What It’s Not

  • Climate change ≠ moral perfection test
  • Turning off lights or skipping flights helps—but can’t fix systemic drivers
  • Energy grids, supply chains, and trade patterns shape most emissions
  • Just 100 companies produce over 70% of global CO₂
  • The “carbon footprint” idea began as British Petroleum’s PR.
    • Carbon footprint: the total amount of GHGs, usually expressed in CO₂-equivalent, emitted by an individual entity.
  • Individual guilt may distract from collective and policy responsibility
  • Lifestyle fixes alone overlook justice, access, and equity
  • It’s not about a few doing everything perfectly—
    it’s about many doing enough together

→ Personal virtue ≠ structural solution — but it still matters when linked to civic action.

🌍 What It Is

Four powerful roles for climate-aware individuals:

Role Description
🗳 Citizen Vote and advocate for climate-sensible policies.
🛒 Consumer Shift market demand toward low-carbon, energy-efficient goods.
đŸ’Œ Professional Integrate climate and energy metrics into your work.
🏙 Community Member Support local resilience and clean-energy projects.

Each role magnifies the others — together, they shape the systems we live within.→ Systemic change begins where individual effort meets collective vision.

đŸ€–đŸ§  “Chat, Write Me a Proposal on the Benefits and Harms of AI”

Motivation, Overview & Research Question

  • Rapid expansion of AI tools and data centers.
  • AI growth → rising energy demand, water usage, and GHG emissions.
  • Widespread everyday use (search, coding, admin tasks) raises concerns about environmental sustainability.
  • Research Question: Does AI bring more harm than benefit to society, once environmental impacts are accounted for?
  • Need to evaluate both the harms (externalities) and benefits (efficiency, innovation) in a structured way and consider policy responses.

Economic Mechanisms & Conceptual Framework

  • Negative externalities
    • High electricity consumption → increased GHG emissions.
    • Large water withdrawals for cooling → worsens water stress.
    • Noise, land-use impacts, and ecosystem disruption around data centers.
    • Classic market failure when AI firms ignore external costs.
  • Behavioral economics
    • Misuse and overuse of AI tools due to low marginal private cost.
    • Limited user awareness of environmental impacts.
  • Risk analysis
    • Quantifies the magnitude and likelihood of environmental harms.
    • Helps prioritize which risks should be addressed first.

Economic Mechanisms & Conceptual Framework

  • Strategic interaction & dynamic efficiency
    • “AI arms race” among tech firms to release bigger models faster.
    • Incentives to race ahead of regulators.
    • Long-run trade-off: innovation vs. environmental degradation.
  • Positive externalities of AI
    • Improved energy efficiency (smart grids, optimized manufacturing).
    • Enhanced medical diagnostics and scientific discovery.
    • Better extreme-weather and storm forecasting.
    • Productivity gains in many sectors.

📊🌍 “Personal Budgeting of Carbon Emissions and Its Impact”

Motivation, Overview & Research Question

  • Individuals contribute significantly to greenhouse gas emissions through daily activities:
    • Driving, heating, food consumption, and consumption of goods.
  • The project examines personal carbon budgeting as a behavioral tool for climate mitigation.
  • Research Question:
    How does viewing carbon emissions as a personal budget influence behavior in high-impact and low-impact activities?
  • Policy relevance:
    • Demand-side climate strategies.
    • Potential to support carbon-literacy initiatives and climate apps.

Economic Mechanisms & Conceptual Framework

  • Behavioral economics (Thaler: Mental Accounting)
    • Individuals use mental budgets to organize decisions (e.g., food, entertainment).
    • Treating emissions as a “budget category” can:
      • Increase salience of climate impacts.
      • Reduce “overspending” on carbon-intensive actions.
      • Encourage substitution toward low-carbon activities.

Economic Mechanisms & Conceptual Framework

  • Externalities & awareness
    • Unpriced carbon emissions → negative externalities.
    • Personal tracking and feedback can:
      • Raise risk perception.
      • Generate positive externalities via reduced emissions.
      • Reinforce social norms around low-carbon lifestyles (peer comparisons, dashboards).
  • Policy and implementation angle
    • Links to carbon calculators, personal dashboards, and potential policy nudges.
    • Fits within broader efforts to internalize externalities via information and framing, not only prices.

đŸ‘„đŸŒŽ “Generational Views on Climate Change and How They Affect Action to Combat It”

Motivation, Overview & Research Question

  • Different generations (Boomers, Gen X, Millennials, Gen Z) differ in:
    • Concern for climate change.
    • Trust in scientific consensus.
    • Support for climate policy.
    • Willingness to engage in climate action.
  • Research Question:
    How do generational differences in climate views shape climate action and policy support?
  • Relevance:
    • Helps explain underinvestment in long-term climate mitigation.
    • Highlights intergenerational tensions in climate politics and policy design.

Economic Mechanisms & Conceptual Framework

  • Intertemporal discounting
    • People discount future benefits relative to current costs.
    • Younger generations likely apply lower discount rates to long-term climate outcomes.
    • Older generations may discount more heavily → less support for costly, long-term policies.
  • Intergenerational externalities
    • Today’s emissions affect future generations, who cannot vote or participate in today’s decisions.
    • Underinvestment in mitigation and adaptation from a social-welfare perspective.

Economic Mechanisms & Conceptual Framework

  • Behavioral economics factors
    • Present bias and hyperbolic discounting.
    • Misperception of long-run climate risk and tail events.
    • Limited attention and cognitive constraints.
  • Market failure
    • Climate is a global public good; benefits are diffuse and long-term.
    • Standard models with a single social discount rate may miss heterogeneous preferences across generations.

âš–ïžđŸŒŹïž “Balancing Efficiency and Equity In New York Wind Energy Expansion”

Motivation, Overview & Research Question

  • New York aims to expand wind energy to meet clean-energy and climate targets.
  • Wind energy generates:
    • Positive externalities: emissions reduction, cleaner air, energy security.
    • Negative externalities: noise, visual impacts, property value concerns, wildlife effects.
  • Geographic distribution of costs and benefits:
    • Urban consumers benefit from clean electricity.
    • Rural communities shoulder many local costs.
  • Research Question:
    How can New York design wind energy policy that balances efficiency (clean energy expansion) and equity (localized burdens)?

Economic Mechanisms & Conceptual Framework

  • Externalities & market failure
    • Benefits and costs are unevenly distributed across regions.
    • Without policy, wind expansion may be efficient in aggregate but inequitable locally.
  • Principal–agent issues
    • Policymakers and urban voters may push for rapid expansion.
    • Rural communities may resist if they perceive unfair distribution of benefits vs. costs.

Economic Mechanisms & Conceptual Framework

  • Economic tools and frameworks
    • Pigouvian taxes/subsidies to internalize externalities.
    • Coasean bargaining and community benefit agreements.
    • Compensation mechanisms:
      • Revenue sharing.
      • Local infrastructure investments.
      • Property value guarantees.
    • Dynamic efficiency:
      • Long-term planning of onshore vs. offshore capacity.
      • Balancing near-term costs with long-term climate benefits.

🌳đŸȘ” “Evaluating the Underperformance of UN-Backed REDD+ Initiatives in Combating Deforestation in Brazil”

Motivation, Overview & Research Question

  • REDD+ (Reducing Emissions from Deforestation and Forest Degradation) aims to:
    • Conserve forests.
    • Reduce emissions from land-use change.
    • Support sustainable development.
  • Brazil’s Amazon rainforest is a critical global carbon sink.
  • Despite REDD+, deforestation continues at high levels.
  • Research Question:
    Why has REDD+ failed to effectively reduce deforestation in Brazil?

Economic Mechanisms & Conceptual Framework

  • Negative externalities
    • Private actors profit from land clearing (ranching, soy), while:
      • Society bears climate and ecosystem costs (CO₂ emissions, biodiversity loss, rainfall disruption).
  • Public goods and free-riding
    • Amazon forests provide global benefits (carbon storage, climate regulation, biodiversity).
    • No single actor internalizes full benefits → under-protection.
  • Property-rights failures
    • Weak or unclear land tenure:
      • Encourages illegal clearing and land grabs.
      • Promotes short-term profit maximization.

Economic Mechanisms & Conceptual Framework

  • Program-specific problems in REDD+
    • Leakage: deforestation shifts to neighboring areas not under strict protection.
    • Corruption and weak enforcement: delayed or misdirected payments; poor monitoring.
    • Phantom credits: carbon credits without real emission reductions.
    • Mismatch between high-level design and on-the-ground incentives for farmers and communities.

💡🏠 “Economic Reasoning Behind Households Income Level in Transitioning to Clean Energy”

Motivation, Overview & Research Question

  • Households face decisions about adopting clean energy technologies:
    • Electric vehicles (EVs), rooftop solar, energy-efficient appliances.
  • Adoption is uneven, often skewed toward higher-income households.
  • Research Question:
    How do income levels and access to information affect the economic reasoning behind clean energy adoption?
  • Relevance:
    • Fossil fuels produce negative externalities.
    • Existing policies (tax credits, rebates, DSM programs) may not be equitable or effective across income groups.

Economic Mechanisms & Conceptual Framework

  • Market failure
    • Fossil fuel use imposes environmental externalities not fully priced.
    • Under-adoption of clean energy relative to the social optimum.
  • Behavioral economics
    • High upfront costs and implicit discount rates cause households to undervalue future savings.
    • Information gaps:
      • Limited understanding of long-run savings.
      • Uncertainty about technology reliability.
    • Energy efficiency gap: households forgo cost-effective energy-saving investments.

Economic Mechanisms & Conceptual Framework

  • Equity concerns
    • Low-income households:
      • Face credit constraints.
      • Have less access to high-quality information and time to research.
    • High-income households disproportionately capture tax credits and subsidies.
    • Raises questions about distributional fairness of climate policies.

đŸœïžđŸŒ± “Dietary Decisions and Global Emissions: How Everyday Food Choices Shape Climate Outcomes”

Motivation, Overview & Research Question

  • Daily dietary choices (especially meat vs. plant-based) have major impacts on global GHG emissions.
  • The food system is a substantial share of global emissions, particularly from livestock.
  • Individuals have relatively high flexibility in adjusting diets compared to other behaviors.
  • Research Question: How do individual dietary choices—especially reductions in meat consumption—combine to produce measurable global emissions impacts through changes in agricultural production?
  • Policy interest:
    • Carbon pricing on high-emission foods.
    • Information campaigns and dietary guidelines.
    • Low-carbon diet promotion.

Economic Mechanisms & Conceptual Framework

  • Negative externalities & market failure
    • Meat production generates emissions that are not priced into food costs.
    • Private marginal cost < social marginal cost → overconsumption of high-emission foods.
  • Behavioral economics
    • Food choices shaped by:
      • Habits and cultural norms.
      • Bounded rationality and limited attention to climate impacts.
      • Imperfect information about environmental consequences and nutrition.
    • These factors make sustainable dietary shifts difficult.

Economic Mechanisms & Conceptual Framework

  • Policy and incentive design
    • Use of:
      • Carbon taxes or fees on high-emission foods.
      • Subsidies or vouchers for plant-based options.
      • Information nudges, eco-labels, and updated dietary guidelines.

đŸ„ŹđŸ§Ș “Reaching New Heights: Vertical Farming as a Microeconomic Response to Climate Change”

Motivation, Overview & Research Question

  • Global population projected to reach 9.7 billion by 2050, with ~70% living in cities.
  • Traditional agriculture faces:
    • Land scarcity near urban centers.
    • Freshwater depletion (agriculture uses ~70% of global freshwater).
    • Climate vulnerability and environmental degradation.
  • Vertical farming:
    • Indoor, vertically stacked production using hydroponics/aeroponics and LED lighting.
  • Research Question: How has the adoption of vertical farming generated positive externalities for individuals and communities, and what policy mechanisms can internalize these benefits to promote sustainable agriculture?

Economic Mechanisms & Conceptual Framework

  • Positive externalities
    • Lower CO₂ emissions via reduced deforestation and shorter supply chains.
    • Greater water efficiency (up to ~98% reduction in water use).
    • Reduced pesticide and fertilizer use.
    • Improved community health and food access.
    • Local job creation and green employment.
  • Market failure and underinvestment
    • Private marginal benefit (PMB) < social marginal benefit (SMB).
    • High fixed and variable costs (energy, labor, infrastructure) limit private profitability.
    • Results in underinvestment in vertical farming relative to social optimum.

Economic Mechanisms & Conceptual Framework

  • Policy tools to internalize spillovers
    • Capital subsidies, tax credits, and grants for vertical farms.
    • Consumer vouchers and eco-labeling for vertically farmed products.
    • Property rights and potential Coasean bargaining with cities and utilities.

đŸŠđŸ”„ “The Effect of Insurance Premiums on Climate Risk Perceptions”

Motivation, Overview & Research Question

  • Climate change is increasingly visible in insurance markets:
    • Rising premiums and reduced coverage in high-risk areas.
  • 2025 Southern California wildfires:
    • Major damages.
    • Significant increases in property insurance premiums and insurer withdrawal.
  • Research Question: Do rising insurance premiums increase individuals’ perceptions of climate risk and climate-policy support?
  • Importance:
    • Insurance may be one of the clearest financial signals of climate risk for households.
    • Could help reduce excessive discounting of future climate damages.

Economic Mechanisms & Conceptual Framework

  • Intertemporal discounting & bounded rationality
    • Climate damages are often distant and uncertain → heavy discounting.
    • Insurance premiums make risk immediate and salient by increasing current costs.
  • Intergenerational externalities
    • Current climate decisions affect future generations who cannot directly influence policy.
    • Underinvestment in mitigation from a social perspective.

Economic Mechanisms & Conceptual Framework

  • Insurance market structure
    • Risk pooling means low-risk consumers subsidize high-risk areas to a degree.
    • Premium hikes, coverage limits, or insurer exits can:
      • Reveal underlying risk changes.
      • Raise awareness of climate-related hazards.
  • Behavioral dimensions
    • Risk salience after disasters (wildfires, floods).
    • Availability heuristic: recent events increase perceived probability.
    • Limited attention: premiums serve as a “wake-up call” about climate risk.