Trust and CO2 emissions: Cooperation on a global scale
Although the effect of trust on local cooperation is well-documented, little is known about how trust influences global cooperation. Building on a large body of theoretical and experimental literature, we hypothesize that trust shared in a society may positively affect global cooperative behavior. We provide empirical evidence in the context of climate change that an increase in trust is associated with a larger reduction in CO2 emissions across countries, controlling for country fixed effects and a number of time-varying factors. As a falsification test, we estimate the relationship on an earlier period when there was no concern of man-made climate change (before the 1980s) and find no impact of trust on CO2 emissions during that period.
Ara Jo, Stefano Carattini, Trust and CO2 emissions: Cooperation on a global scale, Journal of Economic Behavior & Organization, Volume 190, 2021, Pages 922-937, ISSN 0167-2681, https://doi.org/10.1016/j.jebo.2021.08.010.