Discounting the future: The effect of collective motivation on 2 investment decisions and acceptance of policies for renewable 3 energy

34 Previous research has mainly considered economic factors and personal psychological 35 factors (e.g., personal pro-environmental attitudes) as determinants of investment behavior for 36 renewable energies. However, less is known about how social identities, i.e. the human capacity 37 to think and act as a member of a social group, can shape green investment behavior. Combining 38 insights from economics and psychology, the current research investigates if collective pro-39 environmental motivation (e.g., pro-environmental ingroup norms, collective climate efficacy 40 beliefs) can uniquely add to the explanation of investment decisions and the acceptance of 41 policies for renewable energies. Results from a multi-country survey (31 European countries, 42 N = 18,037), including a discrete choice experiment, showed that collective pro-environmental 43 motivation was positively correlated with the acceptance of green energy policies and 44 negatively correlated with discounting of future benefits (money discount rate) in investment 45 decisions for renewable energies. Importantly, collective pro-environmental motivation 46 remained a significant predictor of policy acceptance and the discount rate after controlling for 47 personal pro-environmental motivation. Furthermore, the associations between collective pro-48 environmental motivation and our outcome measures were stronger for respondents highly 49 identified with their group compared to low identifiers. Our findings suggest that collective pro-50 environmental motivation provides a unique opportunity to increase support for and 51 participation in the transformation towards carbon-neutrality.

Introduction 9 210 consumption behaviors (e.g., recycling, private mobility behavior) and on personal-level 211 variables when predicting pro-environmental behavior (e.g., personal attitudes; [41]). The 212 present research extends these studies by testing how collective pro-environmental motivation 213 (e.g., perceived ingroup norms supportive of pro-environmental action, collective 214 environmental efficacy beliefs) may influence behaviors that are more directly related to 215 changes in our production and consumption patterns. Specifically, we examine if collective pro-216 environmental motivation can uniquely add to the explanation of investment decisions and 217 acceptance of policies for renewable energies. We use investment in renewable energy projects 218 as a key possibility for individuals to contribute to the transformation towards carbon-neutrality. 219 The key parameter for private or public decision-making in such climate-related investments is 220 the subjective discount rate [42][43][44][45]  This manuscript is a preprint and has not been peer reviewed. The copyright holder has made the manuscript available under a Creative Commons Attribution 4.0 International (CC BY) license and consented to have it forwarded to EarthArXiv for public posting.  265 ranging from 1 = "strongly disagree" to 5 = "strongly agree".

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Acceptance of green technologies was assessed with one item ('I would accept energy 267 policies that protect the environment even when these induce higher costs, e.g., policies that 268 increase the prices of fossil fuels.'). This variable will henceforth be called Acceptance.  299 Europe]?', ranging from 1 = "not at all" to 5 = "very much"). This variable will henceforth be 300 called ID.

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This manuscript is a preprint and has not been peer reviewed. The copyright holder has made the manuscript available under a Creative Commons Attribution 4.0 International (CC BY) license and consented to have it forwarded to EarthArXiv for public posting. license EarthArXiv 302

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This manuscript is a preprint and has not been peer reviewed. The copyright holder has made the manuscript available under a Creative Commons Attribution 4.0 International (CC BY) license and consented to have it forwarded to EarthArXiv for public posting. license EarthArXiv 320 Figure  The levels of the holding periods varying between 5, 10 and 15 years. To calculate the 323 profit we use the profit rate (0%, 5%, 10%, 20% or 50%) and the investment level which were 324 randomly assigned. The investment levels --€100, €500, €1000, €2000, or €5000 --, were not 325 varied between the scenarios in order to simplify the choice tasks for the respondents. In Table   326 III we describe all attributes and list their levels. Further, the survey included a treatment that 327 told respondents that a local government, national government, or EU official had endorsed the 328 investment opportunities. Each treatment was shown to one-quarter of the respondents in each 329 country, with the remaining respondents seeing only a briefing explaining the investment 330 opportunities. 331

(3)
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366
The effects of the social and psychological variables on the utility discount rate 367 are empirically identified by the estimated parameters for the interaction between these 368 variables and the holding period , leading to 369 = ln( (1 + )) + -0 -1 × + .

371
To facilitate interpretation, we convert the utility discount rate into a money discount 372 rate, dividing it by the estimated coefficient for log profit, . We thus obtain the money discount 373 rate This manuscript is a preprint and has not been peer reviewed. The copyright holder has made the manuscript available under a Creative Commons Attribution 4.0 International (CC BY) license and consented to have it forwarded to EarthArXiv for public posting. license EarthArXiv 391 discount rate, , which has been identified to be a key variable in decision-making related to 392 climate change, as pointed out in the introduction 393

394
In Models 1-5 (Table IV) we estimate Conditional Logit models using the DCE data.   This manuscript is a preprint and has not been peer reviewed. The copyright holder has made the manuscript available under a Creative Commons Attribution 4.0 International (CC BY) license and consented to have it forwarded to EarthArXiv for public posting.  This manuscript is a preprint and has not been peer reviewed. The copyright holder has made the manuscript available under a Creative Commons Attribution 4.0 International (CC BY) license and consented to have it forwarded to EarthArXiv for public posting. license EarthArXiv 459 support this assumption, revealing a statistically significant three-way interaction effect of 460 Holding period, collective motivation index and ID (coefficient of Hold*CMI*ID). Inspection 461 of the simple slopes (see Figure 4) showed that the negative association between collective pro-462 environmental motivation and the money discount rate was stronger for high identifiers (+1SD) 463 than for respondents with low levels of ID (-1SD). Specifically, high identifiers exhibited a 464 lower money discount rate compared to low identifiers when collective pro-environmental 465 motivation was high. However, we found no difference in money discount rate between high  Num. obs. 18037 Num. groups: Survey country 31 * * * < 0.001; * * < 0.01; * < 0.05 504 505 Figure

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As a further indication that the effects of norms and collective efficacy are also truly 533 collective, we found that the effects were stronger in people who indicated higher identification 534 with their salient ingroup. Obviously, it needs identified group members to make collective 535 motivation factors work. Groups may not just have the power and magnitude to bring about 536 significant pro-environmental change through societal transformation but they also provide 537 identified members with a sense of agency in the face of collective problems causing personal 538 helplessness, and they validate their actions as being appropriate. This is why, in our study 539 across 31 different European countries, not just very large and highly powerful collective 540 identities, such as "EU Citizens", had the observed motivating effects, but also smaller groups, 541 such as the people in one's own country or municipality. Obviously, just thinking about the self 542 in terms of some collective strengthens people's motivation to support pro-environmental 543 systemic change.
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544
Economic analysis usually takes preferences as given. This is true in particular for the 545 discount rate, which is often assumed to be a constant, independent of time and circumstances 546 also in the analysis of climate change mitigation policies [50]. Our study provides evidence that 547 "personal circumstances" affect the discount rate. Specifically, personal and collective pro- 565 On the more methodological side, our study shows that insights from psychology can 566 meaningfully contribute to our understanding of economic decision-making, thus opening up a 567 new perspective for fruitful interdisciplinary collaboration.

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