Risk Aversion: Support or Hinder to the Wind Energy Transition? An Empirical Investigation

Addressing climate change has become a global challenge, requiring a transition from traditional fossil fuels to renewable energy sources. Among these, off-shore wind power is a promising solution. However, behavioral traits often influence the public acceptance of such projects, particularly due to risk aversion. By integrating behavioral economics into environmental policy, this paper investigates how the intrinsic behavioral trait of risk aversion interacts with individuals' beliefs about the real risk of climate change over time and how this interaction shapes their willingness to accept an off-shore wind power plant. Using survey data from 1002 respondents in a field experiment conducted during the 2023 edition of one of the largest cultural festivals in Southern Italy, we find a positive correlation between intrinsic risk aversion and willingness to accept an off-shore wind power plant only when the perceived climate change risk is high enough. Therefore, the tangible threat of climate change serves as a driving force, boosting the willingness to accept uncertain outcomes-such as the possible advantages from the installation of renewable energy-across all risk profiles, including those of highly risk-averse, moderately risk-averse, and risk-loving individuals.