Political, economic, and psychological barriers to an effective climate treaty and sustainable energy: The PEP triangle

The PEP triangle

Our conceptual PEP model is based on the idea that the overall success of international climate policies can be inferred as a function of contextual barriers. More generally, several papers address the issue that contextual barriers influence the likelihood of success of a treaty (Sandler, 2017; Young, 2011; Barrett, 2003). Overall, these barriers can determine and explain major differences between the non-cooperative and cooperative behavioural outcome.

Our conceptual model is based on a multi-criteria decision analysis approach. Here, we have an overarching objective of reaching an effective low-emission agreement. We argue that three major barriers exist, namely political, economic, and psychologic barriers. In total, they overall define how likely success is. As no natural scale exists to measure the severity of these barrier, we identify, for each barrier, three underlying factors that together define the level of each barrier.

These three underlying factors for each barrier are measured on a three-point scale (high, middle, and low). In sum, they give an indication of the severity of the barrier in question. We have not specified precisely which level of the underlying factor that exactly determines the interval on the scales (high, middle, low) as we are only interested in how to achieve total progress and generate a general model for doing so. We do stress, however, that all factors need to be at a low level, i.e., the best score for reducing the specific barrier, in order to increase the likelihood of achieving an effective treaty. Since we do not have data to estimate (1), we use theory and literature review to identify factors that are observable and can determine the level of the barriers

An effective climate treaty has to secure that the target levels stated by politicians are achieved, such as the 1.5-degree target level from the Paris Treaty (CEU, 2022b). Such treaty has to ensure that the necessary tools are taken into use. This is possible if the main political, economic and psychological barriers are minimized. As shown in Equation 1, the effectiveness of the climate treaties ($E$) can be controlled by addressing the barriers in all three domains:

We add an error term ($\epsilon$), signifying those factors outside the control of decision makers that might also affect the effectiveness of a treaty (such as the financial crisis in 2008 or COVID-19). Furthermore, the three main barriers are depicted as a three-dimensional PEP model. Each dimension represents the main barriers and measures the likelihood of an effective climate treaty. The fewer barriers, the higher the likelihood of an effective treaty.

All three barriers in Figure 1 below are measured on a scale from low—at the centre of the PEP model triangle—to high—in the three corners of the PEP triangle.

Figure 1. The political, economic, and psychological (PEP) triangle for evaluating the likelihood of an effective climate treaty.

A high level implies that either many or severe barriers exist in that domain. The traffic light colours in Figure 1 thus identify a minimum level of barriers to overcome to move from red to green in each dimension. Moving from red to yellow and green increases the likelihood of reaching an effective treaty. In the following, we consider each of the three main barriers in the PEP triangle, identifying three sub-barriers under each main barrier and their impact on the likelihood of success.

Barriers

Political sub-barriers

Lobbying

Concerning political barriers, a country is not a monolith but represents different and often conflicting interests (Putnam, 1988). Two commonly mentioned stakeholders in environmental problems are industrial interests and environmental interests.

It is well documented that lobbying influences the decisions of policymakers. Svendsen (1999) argues that all eight existing US permit market programmes have been distorted politically through lobbying activities. Here, the environmental groups (EGs) try to maximize their influence by maximizing membership. Increasing membership increases payments and, hence, enables these groups to increase their lobbying activities. The industrial groups (IGs) often use international competitiveness, rising unemployment, and reduction in export as arguments against environmental regulation, focusing entirely on the costs imposed on its members by the proposed regulation, and have no preferences for the environment as such.

The EGs, interested in securing the environmental assets, are not concerned about the likely costs from such regulation. The more resources the EGs and the IGs control, the more influential they are because of their lobbying capacity. The government will respond to this political demand side pressure resulting in a policy that accommodates the interests of the dominant political actors (Downs, 1957; Hillman, 2019). The higher the relative strength of the EGs over the IGs in a country, the more environmental protection reduction this country will accept. Sometimes, non-traditional coalitions between environmentalists and industrialists may occur when the latter produce renewable energy, such as wind turbine industries (Brandt and Svendsen, 2004).

In a similar vein, industrial lobbying from fossil fuel-based producers has arguably distorted the design of the European emissions trading system (Markussen and Svendsen, 2005). Another example is lobbying from green industries in Denmark, such as the relatively small group of wind turbine producers who, because of concentrated benefits from favourable regulation, have been better able to promote their interests than, for example, organic farmers, with their much larger group size and more dispersed benefits (Svendsen, 2011).

Brandt and Svendsen (2016) argue how high-quality institutions are important to counterbalance economically harmful lobbying. Lobbying may be illegal in terms of bribing bureaucrats and politicians. Lobbying may also be legal when interest groups try to inform decision makers about the consequences of their potential decisions. In both cases, the formal institutions have to address corruption or any asymmetries in the political arena where producer groups are in a relatively stronger position to promote their interest at the expense of taxpayers and consumers.

The relative strength of lobbying can be affected by changes in incentives, either by exogenous barriers, such as the positive selective incentive of subsidizing the development in renewable energy sources, or negative selective incentives, such as punishment for emitting too much, matching mechanisms, or taxation of GHG (Svendsen, 2020a, 2020b).

Fairness

A political complication arises when fairness becomes an important measure to reach an agreement. There are no commonly accepted definitions of fairness, but fairness typically relates to equity. According to Hillman (2019), an equity principle refers to more general concepts of fairness. A specific equity principle implies a burden-sharing rule, that is, operational formulas implying a specific burden-sharing scheme, which is here defined as based on one or more criteria.

Keohone (2016) argues that fairness considerations are potential distractions from addressing climate change and could undermine collective action in the face of urgent public goods crises. Klinsky et al. (2017), on the other hand, argue that equity questions are central to the climate negotiations in that reciprocity is inevitably connected to actors’ perceptions of fairness. Moreover, cooperating actors are less inclined to behave in a reciprocal manner if they consider the institution unjust or the outcomes it is expected to provide inequitable (Ostrom and Ahn, 2009).

Diplomatic network

Institutions can also be informal, including different types of social networks. In particular, the absence of climate diplomacy within such networks is relevant in our setting. As the Italian diplomat Daniele Vare once put it, diplomacy is the art of letting someone else have your way. In this way, these informal networks can increase the likelihood of cooperation and the win-win situations that Vare hinted at.

In the EU, EEAS could play a decisive role in this process and in how to identify operational ways forward within climate diplomacy. One option could be simply to use the existing diplomatic infrastructure of EU delegations. By the end of 2019, the EU had 141 delegations around the world, employing almost 6,000 staffers. This diplomatic infrastructure could furthermore be supplemented by the Green Diplomacy Network (as chaired by the EEAS).

In the same vein, the European Council (2019) has emphasized the importance of diplomatic networks, stating that the EU will continue to lead global climate action and the enhancement of international climate cooperation. For example, the EU may practice informal climate diplomacy in relation to China, the world’s largest greenhouse gas emitter. Such flexible climate partnerships could mean more green technology exports from the EU to China and other developing countries. For example, the EU has comparative advantages within the wind turbine industry, and in this way, the EEAS could facilitate relatively low-cost cooperation with large CO2 emitters outside the EU and address their differentiated interests (Mathiasen and Svendsen, 2020). These bilateral agreements are more bottom up, following informal talks between diplomats in their networks, and may be a decisive strategy if the stated target levels in the EU and the Paris Agreement are to be achieved (Jørgensen et al., 2020).

Summary: Political barriers

An important fairness pillar of the UNFCCC is the principle of common but differentiated responsibility and respective capabilities. The Paris Agreement reaffirms the obligations of developed countries to continue to take the lead in mobilizing climate finance.

The actual mechanism in place is the Global Environment Facility (GEF), which has served as an operating entity of the financial mechanism since the Convention’s entry into force in 1994. At COP 16 in 2010, parties established the Green Climate Fund (GCF) and, in 2011, also designated it as an operating entity of the financial mechanism. The financial mechanism is accountable to the COP, which decides on its policies, programme priorities and eligibility criteria for funding (UNFCCC, 2011). The main purpose of the GCF is to finance and facilitate climate-related projects and governance structures in developing countries to help accelerate transitions to low-carbon societies.

Until now, the financial mechanism has not delivered. As of 31 July 2020, the GCF has raised $10.3b, which is far below the expectation of $100b when the fund was established in 2011 (Green Climate Fund, 2020). This view is supported by Cui et al. (2020), who argue that the efforts of the GCF to mobilize finance have failed to meet the needs of developing countries for addressing climate change. Based on an intensive study of projects, they argue that co-financing could be a useful solution.

In the same line of thought, Brandt and Svendsen (2021b) argue for more direct climate-friendly technology transfers to the global south countries and that technology development should be tailored to the specific circumstances, enabling a ‘leap-frogging effect’, which again leads to sustainability. Lobbying for non-climate policies can be counteracted by incentivizing private firms and investors to invest in climate-friendly and sustainable practices, technologies and innovations.

For instance, in its strategy for financing the transition to a sustainable economy, the EU (European Commission, 2021) has emphasized enabling frameworks to shift the focus of financial and non-financial companies to sustainability and long-term development. Including a voluntary European Green Bond standard and the adaption of disclosure policy, which requires financial and non-financial companies to provide information to investors about the environmental performance of their assets and economic activities.

The EU has already established a wide-ranging web of bilateral and multilateral climate partnerships and initiatives with other countries and regions. In the European Green Deal, the EU proclaims that it will step up bilateral engagement with partner countries and, where necessary, establish innovative forms of engagement (EU, 2019). Stepping up the level of climate action taken by international partners will require tailor-made geographic strategies that reflect different contexts and local needs (Brandt and Svendsen, 2021). Finally, the EU emphasizes that it will intensify working with global partners to develop international carbon markets as a key tool to create economic incentives for climate action.

The EU has established a long-lasting bilateral partnership with China and India on climate change-related issues. In 2005, the first EU-China declaration on climate change was signed (European Commission, 2005). Subsequently, several programmes for joint initiatives have been agreed on, such as long-term development strategies on low greenhouse gas emission, emissions trading and investment in climate and clean energy projects (European Commission, 2018). The newest strategic cooperation agenda is formulated in 2020 (EEAS, 2020). EU has also recently intensified its partnership with India. This partnership includes EU support for renewable energy projects (solar and offshore wind), support for implementation of smart grid, but also policies aiming at accelerating clean energy innovation and global deployment and meeting their respective NDCs.¹

The EU has also developed cooperation with Canada (cooperation regarding efficiency in the energy sector) (Government of Canada, 2016), South Korea (technological cooperation and facilitating implementation of emissions trading scheme) (EEAS, 2018b), Brazil and Mexico (deforestation and forest management) (European Commission, 2007, 2008), and South Africa (assisting in implementation of climate policy and helping South Africa become a regional climate leader) (EUR-Lex, 2007).

Multilateral partnerships include the EU-African Union partnership. In the 2020 comprehensive EU Strategy for Africa, it is stated that the EU underlines the importance of strengthening the cooperation with the African Union on, among other things, climate change adaptation and mitigation (European Parliament, 2020). Other multilateral partnerships include the 2019 EU-Central Asia strategy, including cooperation on the implementation of the Paris Agreement on Climate Change (European Commission, 2019) and the EU-Eastern Neighbourhood partnership. In the latter, areas of cooperation are to increase the resource efficiency of economies, develop new green jobs and economic opportunities linked to the green transition and develop local and renewable sources of energy (European Commission, 2016, 2020a).

The EU also engages in non-partnership efforts through trade or international institutions. Regarding the climate cooperation through trade agreements, the EU trade agreements contain rules on trade and sustainable development (European Commission, 2020b). Finally, established in 2019 partly by the EU, the International Climate Finance, an international platform on sustainable finance, is a forum for facilitating exchange and coordinating efforts in support of green financing. The main aim is to scale up the mobilization of private capital towards environmentally sustainable investments (European Commission, 2020c, 2020d).

While this is an impressive list of partnerships, a weakness of all these partnerships is the lack of stated quantitative objectives, such as the amount of greenhouse gas emissions reductions, making it difficult to evaluate their potential and actual achievement. Given that none of the partnerships seemingly involve immediate large-scale policy changes, there is a barrier from the absence of effective diplomatic network (see Figure 2).

Figure 2. Three political sub-barriers.

The effectiveness of these policies and the potential for such policies to be adapted have yet to be seen, but the partnerships mark an important first step towards reducing the barriers from lack of climate network diplomacy.

Economic sub-barriers

Free-rider incentives

Climate change problems have a distinct global public goods character. Reducing emissions will provide a public good as 1) each country can enjoy this benefit in terms of smaller damages, although the benefits will differ, and 2) no country can be excluded from this enjoyment. The fundamental issue here is that for climate change, the contribution to this public good is voluntary, meaning that self-enforcement is an overarching condition for a climate policy to be effective.

Most experts assert that for an individual country, the marginal per capital return of a climate policy is less than one, after some initial policies that may coin a net benefit (Barrett, 2006; Nordhaus, 2019). Moreover, the theory of international relations assumes that individual countries will try to maximize their national benefits when choosing a national climate policy. In his seminal work, Barrett (1994) concludes that very little cooperation can be sustained. Moreover, Barrett (2003) claims that most agreements do not work in the sense that they only require that parties do what they would have done anyway. Out of more than 200 existing agreements, only few require significant reductions compared to what countries would have done without an agreement (Sandler, 2015, 2017). Thus, free riding is a first and major economic obstacle to solving the collective action problem.

What characterizes the incentives to free ride? First, pure economic costs and benefits are important. The temptation to free ride is generally higher the larger the difference between the costs of abatement and damage costs, both total and marginal (Finus and Tjøtta, 2003). Higher reduction costs increase the gain from non-participation, and this is especially severe the more sharply the costs of abatements are likely to increase, so that countries have a great deal to gain by reducing their abatement. This implies that the more demanding the reduction obligations, the higher the resulting free-rider incentives. Low damage costs, and especially low marginal damage costs, also increase free riding, since the loss of free-rider incentives because of smaller environmental protection is limited.

Obviously, the greater the free-rider incentives, the more complicated the negotiations. Barrett (1997) notes that when countries interact only in providing a public good (the reduction of transboundary dispersed pollutants), then cooperation in the provision of this good can only be sustained by a self-enforcing international environmental agreement if the threat of failing to provide the good in the event that others do so is credible. In order to handle or eliminate such incentives, more complicated mechanisms must be employed, possibly with built-in punishment structures. Barrett (2003) remarks that credible enforcement mechanisms and effective monitoring systems are essential. However, in addition to complicating negotiations, such punishments may be non-credible, for instance, if they cannot be implemented. In such cases, free-rider incentives are non-manageable.

Trade sanctions against free-riding countries seem to be the most likely type of sanctions (Barrett, 1997; Brandt and Svendsen, 2002). What are the possibilities of punishment via trade sanctions? The prospects of effective sanctions are higher when they are credible. Trade sanctions are arguably more effective against small countries than large regions or countries such as the EU, China, and USA. Nordhaus (2015) introduces the idea of climate clubs, where club member countries agree on a uniform domestic carbon price, while non-participants are penalized, for instance, by a uniform percentage tariff on the imports of non-participants into the club region.

Lacking the ability to influence the behaviour of other countries

The next economic sub-barrier deals with the possibility that countries may unilaterally undertake climate policies without engaging in any formal international climate negotiations. Unilateral climate actions will be any credible climate actions made by a country implying a significantly larger effort than comparable countries in comparable situations with the intention – at least partially – to trigger a positive response among other countries or groups of agents.

Consequently, unilateral actions can be viewed as voluntary contributions to a public good having the potential to trigger positive reciprocal behaviour (Bernauer et al., 2016). However, such a climate leadership may not work and may even trigger fewer climate actions in other countries that free ride on the contributor (Hoel, 1991). Another risk is that a country that acts unilaterally is excessively overoptimistic and a victim to the winner’s curse; the country that takes the lead may also be the one who most optimistically misjudges the costs of mitigation (Eskeland, 2013). Finally, it might be politically difficult to justify a costly policy for which the consequences are uncertain (Facchini, 2016).

In a seminal paper on unilateral climate actions, Hoel (1991) argues that the motivation for engaging in unilateral action is setting a good example for others to follow. However, no mechanisms were specified on how to create incentives for other countries to follow the good example. Recently, several papers have proposed such mechanisms, coming up with manifold motivations based on identified positive responses of other countries, including Schwerhoff (2016) and Buchholz and Sandler (2017). Schwerhoff and Kornek (2018) more specifically identify positive responses related to motivational effects, learning effects, and knowledge spillover effects.

Motivations could be centred on morally based arguments, such as a sense of responsibility because of previous high historic emissions or distributional issues (Brandt and Svendsen, 2016). Furthermore, expressive behaviour as a performance comparison contest with comparable or neighbouring countries may play a role (Hillman, 2019). The motivational effects may also stimulate more ambitious climate policies abroad.

Learning effects may exactly be enhanced through knowledge spillovers to other countries (Keller, 2010; Klarl, 2014; European Union, 2017). Knowledge spillovers exist in situations where the social benefit from new knowledge is larger than the private returns to their innovator. As with national spillovers, knowledge, and information spillover can also propagate to other countries and have impacts of increased human capital, such as increased knowledge in sustainable production and production processes, but also cleaner local air pollution, potentially leading to less greenhouse gas emissions. Unintentional technological benefits to firms that come from the research and development efforts of other firms or countries without the costs being shared can also create spillover effects and increase sustainable production.

Investments in climate innovations either provide a lowering of costs through better learning rates and/or larger efficiency of existing technologies (such as wind or solar photovoltaic (PV)) or produce new and more competitive and reliable technological solutions. Learning is not necessarily restricted to renewable energy technologies but could also include reduced food waste, recycling practices, or different sharing arrangements (Shipan and Volden, 2008; Bertoldi et al., 2018).

Technology and knowledge spillover can be both an advantage and a disadvantage for the developing country. The technology spillovers impact the developing country’s economy through two main channels: 1) negative impact through the reduction of first-mover advantage, and 2) positive impact through stimulating world demand for its products. When other countries adopt a technology, new learning effects will occur, and some of these will then drive forward with even more adoption as a reinforcement of the initial technology diffusion process. Note that the larger the extent of technology adoption, the more additional learning effects will be generated, producing a positive feed-back mechanism. Over time, these effects will reduce the overall global GHG emissions and provide additional benefits for the acting country (Brandt and Svendsen, 2016).

The effect of a unilateral action in terms of, for instance, producing actual learning advantages is therefore most uncertain. How much will the costs of the new technology be, how effective will it be to reduce emissions, how good will it be to substitute more polluting technologies, how likely is it that following countries will find it worthwhile to also use the new technology, and what about political learning? Is such learning transferable to other countries? The latter part of the uncertainty related to the response depends on the costs and effectiveness of the new technology and policies but also on how it fits into the responding countries’ socio-economic, geographic, and current infrastructure. In real life, uncertainty surrounds how costly an abatement effort will be for a yet not developed technology. We might have an idea about the learning rate of a new technology but are uncertain about technical details, but also about the application possibilities and public acceptance. Finally, even if costs are lowered in the developing country, it is not automatically converted into the same cost saving in other countries.

First-mover disadvantages

In a business context, first-mover advantages refer to the benefit enjoyed by firms as the consequence of early entry into a new market (Lieberman, 2016). In an environmental context, Przychodzen et al. (2020) argue for first-mover advantages of being a green innovator. Such actions may build stronger preference formations for consumers by the green leader and produce unique products/services that appeal to environmentally aware customers. Green research and development can also increase productivity and technological strength.

However, Cleff and Rennings (2012) claim that such first-mover advantages should not be taken for granted, for example due to lack of protection of intellectual property rights, competitors learning from first-mover’s mistakes etc. Aragon-Correa and Leyva-de-la Hiz (2016) show that firms exploiting well-known technologies perform better than those who develop innovations.

From the perspective of the country engaging in unilateral climate actions, regulation is needed to change behaviour to achieve the climate goals. According to the Porter hypothesis, strict environmental regulations can induce efficiency and encourage innovations that help improve commercial competitiveness (Porter and van der Linde, 1995). Both Ramanathan et al. (2017) and Weiss and Anisimova (2019) show that this is the case for well-designed regulation providing sufficient incentives for the regulated firms to invest in green innovation.

The EU (2017) has analysed the direct benefits from being a first mover on technology development. Obvious first-mover advantages from being a climate leader are here identified, such as new green jobs, better practices, new technologies, and overall improved competitiveness. If a first mover is successful, it is possible to enjoy the monopoly rent. The size of the first-mover advantages depends on the demand for the product in markets abroad and the speed of the catch-up by companies in other countries. This must be compared with the initial investment costs.

Summary: Economic barriers

Currently, free-riding incentives are still massive ($B/C<1$ of own emissions). However, costs of reducing emissions are constantly falling. As an example, the near-future learning rates for wind and solar electricity are expected to be 3-5% for wind and about 12% for solar PV (Samadi, 2018).

Whether investments in innovation of clean technologies produce a net gain or net loss (first-mover disadvantages) and, therefore, acts a barrier for such investments depends on the size of demand for such technologies abroad. This again depends on the development of climate policies abroad, the learning curve effects and – as argued by Brandt and Svendsen (2021a) – since each country has a specific threshold for applying a new, cleaner technology, whether or not lowering costs of technologies might trigger adaptation and changes in country preferences that change the threshold. As seen in Table 1, the EU, the US, Japan, and the UK have recently announced larger Paris Agreement targets.

According to scenarios presented in IEA (2020), cost reductions and sustained policy support are expected to drive strong renewables growth beyond 2022. Overall, renewables are set to account for 95% of the net increase in global power capacity through 2025. Moreover, recent policy momentum has the potential to give renewable energy an extra boost. Finally, net zero emissions targets in key markets (EU, Japan, South Korea, 2050 and China, 2060) are expected to accelerate their deployment of renewables.

Huge investment costs and supportive policies have been needed to advance the development and deployment of clean technologies, clearly indicating a first-mover disadvantage. The trend is now changing as the demand for renewable technologies is soaring. The results of this combination are continued learning curve effects on renewable energy systems and demand shifts because of expectedly more stringent climate policies and changes in public preferences.

This provides the necessary pull and push factors for creating large first-mover advantages when investing in such systems, with the caveat that fierce competition is to be expected. Finally, the ability to influence other countries’ climate policies has also been increased, both via technology export and an increase in partnerships. These results are summarized in Figure 3.

Figure 3. Three economic sub-barriers.

Psychological sub-barriers

Underestimating the risk of climate change

The psychological domain relates to how climate change is perceived by the public and politicians. The underlying characteristics of climate changes are that they evolve slowly with significant delays and that future damages are uncertain and mostly related to existing but elevated extreme weather events (IPCC, 2021). Until recently, the implication of climate change has often been perceived as a potentially severe but not immediate threat.

Here, we identify three main barriers from a psychological domain perspective: the direct perceived risk of climate change, the level of abstraction defined as the relevance that climate change is perceived to have on an individual, and the net costs to individuals when considering changes toward more climate-friendly behaviour.

The relevance of risk perception is described by Capstick et al. (2015), who state that the ways in which individuals, societies, and polities respond to climate change are in many cases contingent on public perceptions of its causes, consequences and wider implications. Risk perception of climate change, as it relates to individuals’ perception of the risk of climate change, is part of the psychology of climate change, which addresses human perception, impacts, and responses regarding climate change (Clayton and Manning, 2018).

Non-scientists typically rely more on the more readily available associative and affective processing of climate-related information that comes their way (Slovic et al., 2004; Weber, 2006) and engage in risk perception; that is, how large a risk a potential threat is perceived to be, which often differs from scientific evaluations. Sunstein (2006) observes that if people answer the question, ‘should we be fearful of climate change’ by using the logic of the availability heuristic, then they assess the magnitude of the risk by asking whether examples of harm can readily be brought to mind. If people can easily recall such an example, then they are more likely to be frightened, as shown by several examples in Tversky and Kahneman (1982). If relevant events are not available, the unavailability bias will predominate, leading to inaction in taking the necessary precaution (Sunstein and Zeckhauser, 2011; Weber, 2010).

As evidence of the adverse effects of accelerated global warming mounts, and both media and political discourse focus increasingly on climate change, the availability of climate change is increasing. Capstick et al. (2015) present a four-decade trend in risk perceptions and conclude that in many parts of the world, there has been growing concern about climate change in recent years, while a more recent survey in YouGov (2019) found that a majority of people in 28 countries think climate change is likely to cause serious economic damage, destroy cities, and start wars.

The level of abstraction

Here, we define two concepts related to abstraction: distance and control, both affecting the individual person’s sense of identification and relevance. Sunstein (2006) points out that for risk perception, salience is important as well. He notes that the impact of seeing a house burning on the subjective probability of such accidents is probably greater than the impact of reading about a fire in the local paper. Hence, in terms of identifying with the risk of climate change, the disaster needs to be close in order to be personalized fear. Based on actual studies, Whitmarsh (2009) and Spence et al. (2011) conclude that experience seems like a filter through which the many risks we face daily are evaluated and ranked. This phenomenon is part of the concept of psychological distance, which refers to the distance between an individual and the occurrence of an adverse event (Schuldt et al., 2018).

The general notion is that the larger the distance on any of the four distances, the less likelihood that the problem is related to, identified as relevant and coped with by an individual. Sambrook et al. (2021) review recent findings on the empirical evidence on the relationship between personal experience of extreme weather events and climate change concern and action. The relationship remains mixed. Howe (2021) quotes several recent studies trying to establish a positive relationship between metrics of experiences of extreme weather and measures of opinions on climate change. Although some evidence exists, it is not conclusive. However, other recent studies find that households experiencing climate change, change their voting behaviour, which fits the findings of Sambrook et al. (2021). According to Downs (1957), political parties will also listen to voters’ demand for efficient climate policy. Popular support will decrease political justification costs when climate action is undertaken (Facchini, 2016).

If people feel they cannot change a situation, they are very likely to retreat into apathy and resignation and, thus, less likely to address environmental issues (Moser and Dilling, 2004; Brandt, 2014). Tobler et al. (2012) find that one concept for measuring the feeling of powerlessness is the locus of control, which describes the degree to which individuals believe they can influence outcomes through their actions.

The net costs of climate-friendly behaviour

From a public perspective, when considering changing to a more climate-friendly behaviour or consumption pattern, key factors are ease of substitutability and convenience, such as switching to an electrical vehicle (EV) only if it has the same functionality, price and convenience as an internal combustion engine car (ICE), including charging possibilities. A second important factor is the environmental benefits that such behaviour creates.

Tobler et al. (2012) define cost in this context not merely based on direct economic consequences but also include factors such as the requirement of additional time, discomfort, or effort. They argue that while recycling is a low-cost domain, mobility and shifts in consumption are considered high-cost domains. They found that perceived costs and perceived climate benefits turned out to be the strongest predictors for the willingness to support climate policy measures. These findings are supported by Jakučionytė-Skodienė and Liobikienė (2021), who refer to several recent studies claiming that the relationship between climate change concern and behaviour depends on the cost of the behavioural changes and that costs and inconvenience level can reduce the likelihood of individuals mitigating climate change.

Summary: Psychological barriers

Public perception of climate change hinges on availability, which is affected by whether climate change is considered as having a catastrophic potential (which drastically increases death risks) and on its identification, which depends on personal impact, both from experienced and non-delayed consequences. According to the IPCC (2021), human-induced climate change is already affecting many weather and climate extremes in every region across the globe.

Behaviour is also shaped by societal norms, narratives, and discourses, such as the emergence of intensified information flow and catastrophic risk framing. In 2019, climate scientists and organizations from the UN changed their terminology and began using stronger language to describe the situation we are in. For instance, the UN Secretary-General, António Guterres, talked of the ‘climate crisis’ in September, adding, “We face a direct existential threat” (Guardian, 2019).

A catastrophe narrative for climate change emerged in 2018, exemplified here by a quote from Extinction Rebellion’s (2021) website: “The Truth: We are facing an unprecedented global emergency. Life on Earth is in crisis: scientists agree we have entered a period of abrupt climate breakdown, and we are in the midst of a mass extinction of our own making”.

In accordance with this, most people globally no longer systematically underestimate the risk of climate change. The United Nations Development Program (UNDP) (2021) shows that public belief in climate emergency ranges from 72% in Western Europe and North America to 61% in Sub Saharan Africa. According to Pew research (2020), 63% Americans said that climate change is affecting their local community.

Regarding the solutions, the net costs of climate actions remain problematic. For instance, individual solutions such as substituting an ICE car with an EV remains expensive and inconvenient. Food with less climate footprint is still low in supply or unattractive. According to Stankuniene et al. (2020), households exhibit behavioural stickiness regarding changes in, for instance, energy savings, even in cases where it would be economically preferable to switch to energy-saving measures.

Likewise, Thøgersen (2021) states that the relationship between consumer behaviour and climate change is complex and that most consumers are not capable of determining which behavioural changes are worth making. He concludes that consumers need considerable assistance to make the right climate-related choices. This fits with the findings that a majority want their governments to be the main driver of the changes. According to Pew research (2020), 65% of American citizens say that the federal government is taking too little action on climate change.

Finally, a comprehensive, recent study identifies views on priorities for limiting climate change. People in China (35%) and the US (34%) believe technological improvements are most effective, while in Europe, 29% name this option as the most effective. In Europe, 39% cite a radical change in their habits (consumption, transport etc.) as the most appropriate way to fight climate change. For Chinese (32%) and American (31%) respondents, this option is ranked as the second-most effective way to limit climate change (EIB, 2021).

Given these assessments, we evaluate the current strength of the psychological barriers to be as described in Figure 4 below.

Figure 4. Three psychological sub-barriers.