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Using cost–benefit analyses to identify key opportunities in demand-side mitigation

Nature Climate Change (2024)Cite this article

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Abstract

Demand-side mitigation relies on individuals’ and households’ willingness to alter their consumption habits and daily routines to reduce their carbon footprint. Despite optimistic forecasts for well-being improvements, broad adoption of these behavioural changes remains elusive. Our study analyses 12 behaviours in Beijing, China, using a cost–benefit approach that includes both tangible (pecuniary) and intangible (non-pecuniary) benefits. Our findings indicate that eight behaviours result in individual-level welfare loss. Even after accounting for mitigation benefits, seven behaviours still incur social-welfare loss. Monte Carlo simulations unveil substantial variability in welfare impacts, highlighting opportunities for targeted policy interventions. Depending on the perspective (individual versus societal) and the goal (welfare versus mitigation), we recommend four demand-side practices for Beijing policymakers. In addition, we propose actionable steps on the basis of sensitivity analyses. This study underscores the need for an objective and universally applicable framework to evaluate demand-side behaviours and optimize emissions reduction potential.

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Fig. 1: Distribution of individual-welfare change estimates.
Fig. 2: Distribution of pecuniary and non-pecuniary welfare changes.
Fig. 3: Individual- and social-welfare changes of climate mitigation behaviours.
Fig. 4: Tornado analyses of individual-welfare changes.

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Data availability

All data generated or analysed during this study are included in this published article. Primary and secondary data supporting the findings of this study were all publicly available at the time of submission55.

Code availability

All analyses were conducted using Microsoft Excel and Oracle Crystal Ball.

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Acknowledgements

We gratefully acknowledge support provided by the National Natural Science Foundation of China (grant numbers 72173126 and 72134006) for P.Q. and Singapore Ministry of Education Tier 1 grant (A-8000736-00-00) for J.-S.T.-S. We are also grateful for the computational support provided by the Public Computing Cloud at Renmin University of China.

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Authors and Affiliations

  1. Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore, Singapore

    Jie-Sheng Tan-Soo & Yifei Quan

  2. School of Applied Economics, Renmin University of China, Beijing, China

    Ping Qin & Jun Li

  3. China Academy for Rural Development, School of Public Affairs, Zhejiang University, Hangzhou, China

    Xiaoxi Wang

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  1. Jie-Sheng Tan-Soo
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Contributions

J.-S.T.-S. conceived the study and coordinated the overall research. J.-S.T.-S., P.Q., and Y.Q. designed the research. Y.Q. performed the analysis with support from J.-S.T.-S., P.Q., J.L. and X.W. on analytical approaches and visualization. J.L. and P.Q. implemented the survey. J.-S.T.-S., and Y.Q. wrote the initial paper. J.-S.T.-S., P.Q., Y.Q. and J.L. contributed to subsequent revisions.

Corresponding authors

Correspondence to Ping Qin or Yifei Quan.

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Nature Climate Change thanks Zakaria Babutsidze, Pengfei Liu and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

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Supplementary Sections 1–18, Figs. 1–4 and Tables 1–9.

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Tan-Soo, JS., Qin, P., Quan, Y. et al. Using cost–benefit analyses to identify key opportunities in demand-side mitigation. Nat. Clim. Chang. (2024). https://doi.org/10.1038/s41558-024-02146-4

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