The Green Premium Paradox: Balancing Cost and Environmental Impact in CO2 Offsetting

For consumers, purchasing environmentally friendly products typically comes at an increased financial cost. The present research argues that this is a difficult trade-off for frugal consumers, who on one hand like to save money, while on the other hand, dislike being wasteful. This research examines this tension in the context of intentions to purchase carbon offsets for air travel. A pretest and four studies involved 784 participants made up of North American university students (pretest and Study 2) and North American respondents recruited through CloudResearch (Study 1) and Prolific (Studies 3 and 4). Our results provide evidence that frugal consumers will have higher intentions to engage in environmentally friendly consumption activities (e.g., CO2 offsets) when they first believe they get a deal but also believe their consumption will be more harmful to the environment. These results highlight the role of guilt in this case: frugal consumers feel guiltier than less frugal consumers when their success in saving money is combined with inflicting more environmental harm. This guilt then subsequently drives ethical consumption intentions, such as CO2 offsetting of flights.