STATEIMPACT PENNSYLVANIA – Sometimes, grocery stories put healthier food at eye level. An employer might automatically enroll workers in a retirement savings plan, rather than relying on each person to make that choice. And some utility bills show you how much energy your neighbor is using — with the idea that you might cut down your own energy use.
When a company or government tries to encourage you to do something it wants you to do, that’s called a “nudge.” It can be an attractive mechanism to achieve public policy outcomes — it’s relatively cheap and often painless.
Recent research shows nudges can be effective, but they also have limitations.
A paper published this month in the journal Nature Climate Change showed that when people were given the option of implementing a small, behavioral nudge (in this case, defaulting people into a residential renewable energy plan) versus a much bigger policy (a carbon tax) — with the goal of reducing carbon emissions — the presence of the nudge lowered support for the tax.
For the study, researchers from Carnegie Mellon, Harvard, and Fordham universities gave participants hypothetical decision-making scenarios in which they had to choose whether to levy a $40 per ton carbon tax, default people into a residential renewable program (the nudge), do nothing, or both.
When participants were told only about the tax, 70 percent supported it. When they were told about the nudge, support for the tax dropped to 55 percent.
“It appears people believe the tax and the nudge are equally effective,” said study co-author Emily Ho, a graduate student in psychology at Fordham. “Even though a tax is substantially more effective in reducing carbon emissions. We even find this result holds in a sample of experienced policymakers — 100 percent of which have graduate degrees. It was very interesting.”
Nudges can change behavior, but for many societal problems like climate change, they are not sufficient, Ho said. The research was trying to answer the question about whether the general public, and policymakers, incorrectly perceive nudges to be substitutes for standard economic policies, rather than complementary to them.
One psychological mechanism at play, Ho said, is the idea of a “single action bias.” For example, someone may think, “I’ve supported one policy, therefore, I don’t need to support multiple policies.”
“It’s not just climate change,” she said. “We also find it with retirement savings. People are much more likely to endorse defaulting you into paying a little bit more into your 401k versus changing Social Security, even though changing Social Security would probably be a lot more effective for a lot more people.”
One way to mitigate this effect, Ho and her colleagues found, is to frame the nudge in less favorable terms.
“When we make the nudge kind of unattractive and say, ‘It’s a good start, but we need to do more,’ we find that helps increase endorsement of the [carbon tax].”
The ways we attempt to motivate people toward environmentally beneficial behavior matter a lot, according to Amanda Carrico, an assistant professor of environmental studies at University of Colorado Boulder. She was not involved in the study.
Carrico recently co-authored a meta-analysis published in the journal Nature Sustainability examining 22 other studies about how effective nudging is at getting people to engage in other pro-environmental behaviors.
“Our paper suggests that nudges, overall, do not undermine support for policies to address environmental problems,” she said. “But we don’t get into specific forms of policies, so that’s what different about these two papers.”
Carrico said one consistent conclusion is that the manner in which the policies are presented to people is critical.
“One thing we see is the way different kinds of responses to climate change and other environmental policies are framed — painful or not painful, effective or ineffective — those matter a lot,” she said. “If you rely more on a person’s sense of right and wrong, rather than the external cost, the positive effects increase. It doesn’t mean you can’t talk about costs, but it’s not just an economic decision, in my opinion, it’s a moral decision. I think the public understands that, and we need to encourage and remind people about it.”
In an effort to address climate change, more than 40 countries have placed some sort of price on carbon. Although a carbon tax remains controversial at the federal level in the United States, California and nine northeastern states have put a price on carbon through cap-and-trade programs. Pennsylvania is currently studying a citizen-led petition that would price carbon via cap-and-trade.
StateImpact Pennsylvania is a collaboration among WITF, WHYY, WESA and the Allegheny Front to report on the commonwealth’s energy economy.