BACKGROUND PAPERBehavioral Changes duringAsia's Net Zero Transition:Evidence from Middle-Class HouseholdConsumptionBabette NeverDISCLAIMERThis background paperwas prepared for the report Asian Development Outlook Thematic Report 2023.It is made available here to communicate the results of the underlying research work with the least possibledelay.The manuscript of this paper therefore has not been prepared in accordance with the proceduresappropriate to formally-edited texts.The findings,interpretations,and conclusions expressed in this paper do not necessarily reflect the views oftheAsian Development Bank (ADB),its Board of Governors,or the governments they represent.ADB does notguarantee the accuracy of the data included in this document and accepts no responsibility foranyconsequence of their use.The mention of specific companies or products of manufacturers does not imply thatthey are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned.Any designation of or reference to a particular territory or geographic area,or use of the term"country"inthis document,is not intended to make any judgments as to the legal or other status of any territory orareaBoundaries,colors,denominations,and other information shown on any map in this document do not imply anyjudgment on the part of the ADB concerning the legal status of any territory or the endorsement or acceptanceof such boundariesBEHAVIORAL CHANGES DURING ASIA'S NET ZERO TRANSITIONEvidence from Middle-Class Household ConsumptionBabette NeverSenior ResearcherIDOS German Institute of Development and Sustainability (formerly named DIE)AbstractA net zero transition to climate-neutral development in Asia needs to systematically includethe consumer perspective.Net-zero transition policies including consumers will need todifferentiate both between and within Asian countries,reflecting inequality in emissions,consumption patterns,and capabilities.The growing and aspiring middle classes present thekey consumer group that will shape the next decade in Asia.Key opportunities includechanging consumer norms and aspirations before lock-in,while reaping co-benefits on localproblems,and new job and market opportunities from rising consumer incomes,e.g.,in (a)low-carbon technologies,(b)new services/sharing economy,(c)refurbed and remanufacturedproducts/circular economy,and (d)low-carbon buildings and construction.Future policiescould integrate and expand sustainable consumption and production policies moresystematically to unleash a virtuous cycle,combining regulations,financial incentives andbehavioural insights tools.Regulations and financial incentives are particularly useful forcostly investments,complex decision-making situations,infrastructure support and steeringunpopular choices.Behavioural insights tools are helpful for concrete,individual-levelprograms,the adoption of low-carbon technologies and addressing individuals with highenvironmental concern and intrinsic motivation.Sequencing and targeting measures in policypackages to ensure a timely and just transition is required.NoteIn this report,"$"refers to United States dollars.1