Climate change has far-reaching effects on the way our economy could potentially function in the future by affecting cropping and production patterns, poverty, malnutrition, unemployment, health, and welfare.
A 2019 ILO report states that climate change can cause the loss of 80 million jobs by 2030 (International Labor Organization, 2019). Countries around the world have come together to make commitments to tackle climate change. Agreements like the Paris Climate Agreement and the Kyoto Protocol have many signatory countries with shared goals like limiting global warming to 1.5℃.
When it comes to executing such commitments, roping in all stakeholders (businesses, communities, local government agencies) is imperative. Often the catalyst for change dies down when stakeholders place the onus of taking responsibility on each other – big players like the government and businesses blame individual actors. While individuals feel that amidst the ocean of problems, changing their behaviors will not make a difference. Policymakers and planners are increasingly turning towards behavioral sciences to stop these blame games and aid sustainable changes in promoting climate-friendly behavior.
One such field - that of Behavioral economics challenges the notion of economic rationality in policy making. Economics is increasingly turning towards psychology to redefine its assumptions of how consumers think and act. The field recognizes that people are not ultra rational Homo economicus beings that theories so far have suggested, but real beings who are very far from being rational.
Emma Sagor, a specialist in behavioral change to reduce carbon emissions and the current climate advisor for Portland City, talks about how economic rationality misses out on crucial pieces of human behavior (Sagor, 2020). She points out economics Nobel laureate Kahneman’s pioneering work in the field of behavioral sciences. Kahneman found that 98% of decision making is aided by “fast thinking”, where people use shortcuts or a rule of thumb to figure the easiest way out. Therefore, people do not choose the most desirable option, although they are aware that it is not climate-friendly, simply because change is uncomfortable.
Breaking these routines involve tackling inherent cognitive biases in our psyches - for instance, status quo bias and friction. Status quo bias is the tendency of people to display inertia over their current situation, i.e., they think that their present actions and choices are good enough. Friction, on the other hand, is the tendency of people to avoid complexity or multiple steps. These biases prove to be roadblocks in inducing behavioral change.
Here is where “nudges” come into play. Nudges are choice-architecture tools that present choices in a way that makes people choose the desired option. Nudges subtly employ different behavioral techniques to push people into changing their hardwired routines. They do not restrain the freedom to make choices but rather guide people in making better choices. Plenty of creative nudges are at play globally to guide people in making better choices. From musical piano stairs (to encourage people to take the stairs), smaller plates (to reduce food intake and wastage), to fly pictures inside urinals (to avoid spillage outside), nudges tackle a plethora of issues without resistance or confrontation.
Coming back to how nudges can help spearhead climate change initiatives at the individual and community level, let us look at some successful behavioral interventions in practice. Default nudges are used widely in inducing climate-friendly behavior. Default nudging is simply presenting the better option as the default option. For example, enrolling people as organ donors by default (those not interested can opt-out) has much better retention than the default option of one is not a donor until they sign up for it.
Dinner et al. (2011) experimented on consumer choice between incandescent and CFL bulbs under different default conditions. Energy efficiency and consumption choices hold significant consequences for carbon emissions. The experiment involved two groups- one with incandescent bulbs as the default choice of purchase and the other with CFL bulbs. Experimenters provided the same information regarding the costs and efficiencies of the bulbs to both groups. Although CFL is advantageous for long-run energy consumption and expenses, higher one-time purchase costs discourage customers from choosing CFL bulbs. 49% of participants ended up with incandescent bulbs when it was the default, while 24% chose incandescent bulbs when CFL was the default.
Loss aversion is another concept applied in nudging. Sudarshan (2017) experimented on the effect of peer comparisons on electricity consumption in a Delhi neighborhood. Sending weekly reports to homes comparing their electricity usage to neighbors reduced their energy consumption. The Center for Behavior & the Environment (2021) has compiled an extensive report detailing thirty scalable behavioral interventions in practice to fight climate change. Areas targeted range from food, agriculture, land management, energy to transport. Many such academics and think tanks are leading initiatives by drawing insights from multiple disciplines.
Though behavioral sciences hold great promise to tackle climate change, Emma Sagor warns that one size does not fit all. Sagor writes that interventions at every stage (from planning to execution) need to be inclusive and pluralist. Policymakers must address the deep inequities in our society - on economic, social or cultural lines. Climate change is here, and it is for real. Its ramifications are much worse and tangible for the poor and the marginalized. Identifying and reviewing unique fields like behavioral economics and using them in coordination holds promising potential for the future.