Are subsidies for climate action effective? Two case studies in the Netherlands

Abstract

An often used policy instrument to promote climate change mitigation and adaptation action are subsidies. Yet, it remains unclear to what extent subsidies are effective in motivating behavioural change. Subsidies are effective if they lead to adoption of the behaviour by individuals different from those who would adopt otherwise. On the bases of two theoretical frameworks, we examine the effectiveness of two subsidy schemes in the Netherlands. In Study 1 (n = 151), we applied the Transtheoretical Model and argued that a subsidy for climate adaptation measures is effective if it not only attracts those in the action and preparation stages of the model, but also people in the precontemplation and contemplation stage. In Study 2 (n = 367), we applied the Diffusion of Innovations Theory and argued that a subsidy for electric vehicles is effective if it attracts not only innovators and early adopters, but also early and late majority adopters. In both studies, we examined the extent to which subsidies remove financial barriers and serve as a cue to action. In Study 1, we found that the subsidies primarily attracted people who were in the action and preparation stages. In Study 2, we found that a subsidy for electric vehicles did not attract more early and late majority adopters compared to those who adopted an electric vehicle without a subsidy. In both studies we found that the subsidy mainly served as a cue to action, and was less likely to remove financial barriers.