How Behavioural Economics can reduce pollution in our cities
Updated: Nov 30, 2019
Pollution has been one of the pressing issues in many cities around the world. Many structural policies are required to curb this emergency. In the midst of all this, behavioural economics can give some insights on what citizens, organisations, and government can do to curb pollution.
The choices organisations and individuals make, have significant implications for our environment. The choices are governed by a complex set of motivations and engaging with them can help in mitigating environmental problems.
The following are some of the ways where behavioural concepts can guide us to think about various solutions:
Some people might be motivated intrinsically to change their actions to reduce pollution. However, many of us might not have such motivation. Giving them incentives to change their behaviour can help in protecting the environment.
For example, many local governments around the world incentivise the adoption of electric cars by removing congestion charges, waiving parking fees, taxes, free rechargeable electric stations etc.
As people significantly response to incentives, it can be used to reduce pollution in our cities. However, the impact will depend on what kind of incentives will work in different contexts.
Social Norms and Impacts
Our actions and behaviour are largely dependent on the norms of our society. We follow the norms to be accepted in the community. Therefore, by creating a behaviour norm to reduce pollution can create an impact on how we might behave.
For example, making carpooling or public transport as a norm with citizens can reduce the use of cars and might help in reducing pollution. The creation of these norms can be done by applying social norms technique like getting public actors to support such initiatives or having "no car days".
We deeply care about how our status or behaviour is represented relative to others in society. This insight can be used to encourage behaviour change.
For example, if utility companies show how our energy consumption is relatively compared with others in the neighbourhood, it could encourage us to reduce our energy consumption. The same insight could be used in various pollution mitigating contexts like eco-friendly product usage, pollution emission between corporations, garbage classification etc.
Status quo bias
Encouraging behaviour change could be difficult to bring out as many people can be unwilling to make changes in how they behave. One of the reasons could be that they want to remain in the status quo because of either misinterpretation or uncertainty with the new behaviour. This insight could be applied to encourage new behaviour by shifting the status quo.
For example, making an eco-friendly design of buildings as the default case can encourage how buildings are designed in cities which could eventually make energy consumption efficient.
Depending on the context, such insights and many more can be used to curb pollution in our cities. Let us look at some of the real-life examples.
Example 1: China energy label
China has seen an increase in pollution levels in recent times. To mitigate it, they adopted many policies. One of them was to make it mandatory for all producers and importers to evaluate the energy-effectiveness of the products and print a little sign showing the energy-saving performance level on the products.
The performance level is then used by consumers to make informed decisions about the purchasing of these products and nudge them to consume more “green” based products.
More adoption of this policy worldwide, especially in polluted countries like India, can greatly nudge consumers to adopt greener products which in turn incentives firms to adopt greener ways to produce products.
Example 2: The Green Deal
The Green Deal was launched by the UK government to encourage citizens to be eco-friendlier and more energy-efficient.
It was achieved by providing all of the energy-saving products to the people for free at first. Since a lot of energy consumption was saved, there was a reduction in energy bills for households. The government raised the energy bill a little bit higher, but still less than what the people would have to pay if they had not taken use of the products, to make up for the money they spent on installing the products for the people for free at first.
With the help of many different government departments and many corporations, the Green Deal covered 45 different types of improvements and saved a large amount of money for both the people and the country, also helping with the environmental well-being.
Curbing pollution in cities require a structural level policy initiative. In that space, behavioural economics insights can go a long way in framing policies to curb pollution levels.
A thorough focused on the context and the methodology of science can help produce robust solutions to this problem.
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