Using cost–benefit analyses to identify key opportunities in demand-side mitigation

Abstract

Demand-side mitigation relies on individuals’ and households’ willingness to alter their consumption habits and daily routines to reduce their carbon footprint. Despite optimistic forecasts for well-being improvements, broad adoption of these behavioural changes remains elusive. Our study analyses 12 behaviours in Beijing, China, using a cost–benefit approach that includes both tangible (pecuniary) and intangible (non-pecuniary) benefits. Our findings indicate that eight behaviours result in individual-level welfare loss. Even after accounting for mitigation benefits, seven behaviours still incur social-welfare loss. Monte Carlo simulations unveil substantial variability in welfare impacts, highlighting opportunities for targeted policy interventions. Depending on the perspective (individual versus societal) and the goal (welfare versus mitigation), we recommend four demand-side practices for Beijing policymakers. In addition, we propose actionable steps on the basis of sensitivity analyses. This study underscores the need for an objective and universally applicable framework to evaluate demand-side behaviours and optimize emissions reduction potential. Demand-side mitigation solutions are seen as an essential part for climate actions, yet their adoption is still lower than expected. Cost–benefit analysis shows that the main barriers lie in the non-pecuniary costs of behaviour switching, and highlights opportunities for targeted policy intervention.