Experiments on Green Goods

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Green goods are everyday products with an environmental benefit attached. For instance, a carbon-neutral airline flight is a green good. Possibly, the existence of green goods leads to greater environmental protection. But often, only a small fraction of the price goes towards environmental protection, a feature labelled' greenwash'.Using economics experiments we find that offering subjects the chance to buy a green good can lead to a drop in total contributions to the environmental cause. Because they buy the green good, subjects stop making separate donations to the environmental cause. Meanwhile, some subjects are willing to pay money to avoid a moral dilemma where they are asked to contribute to the environmental good cause.Overall it seems green goods can lead to less money going to environmental causes.