Much current thinking about climate change and renewable energy has been based on rational economic theory and standard modelling. A core assumption of this approach is that individuals always seek to maximise their utility; however, in many fields where human behaviour plays a substantial intervening role—such as finance, health, or taxation—this assumption has been shown to be flawed. It must therefore be of concern that the same flawed assumption is prominent in the response to climate change.
So far, the debate about changing individuals’ behaviour in relation to climate change has focused on market mechanisms. Better pricing of energy and costing of scarce resources can indeed steer individuals away from carbon-intensive consumption.
But the drivers of consumption behaviour by individuals and groups go far beyond prices. Many energy efficient technologies have been available for years, yet little action to really utilise these technologies on a mass scale has taken place. The trick is to grasp why—and this is where conventional economic theory fails to provide answers.
Awareness of climate change has increased without translating into individuals’ actions. We are more aware of climate change than ever, yet drive more large 4WDs, live in ever larger houses and we consume copious amounts of energy. What explains this disconnect between perceptions and actions?
This “green gap” in public attitudes partly stems from how climate science is communicated (with particular prevalence of deliberate disinformation by vested interests) and how our minds (mis-)understand climate dynamics. Standard “information-deficit” models of communication assume that if we “know” something, we also change our behaviour. Thus, on this model, knowing more about climate change should bring about behavioural change. But improved knowledge or even prior experience may not lead to corrective action; just look at the centuries of financial folly that have led to speculative bubbles and their inevitable meltdowns from the Dutch Tulip Mania to the sub-prime crisis or, arguably, the current Australian housing market.
Information can also lead to feelings of disempowerment (“you can’t change the course of nature”); which then may turns into ambivalent powerlessness. Similarly, playing up the multi-stakeholder nature of climate adaptation is a reminder that the solution rests with no single actor, resulting in a generalised feeling of limited agency, helplessness, and disempowerment.
An added challenge has to do with how we perceive the problem. The dynamics of climate change stretch our mental capacities in several ways. The fact that even the most drastic and sudden emissions reductions will not immediately stop further warming is something we struggle with. The delayed, intangible nature of climate change risks simply does not “move us.”
Understanding barriers to behaviour change also requires that we go beyond explanations based on the individual as a unit of analysis and embrace the way social factors influence perceptions, decisions, and actions. We tend to resist and deny information that contradicts our cultural values or ideological beliefs, such as information challenging notions of belonging and identity, but also of rights to freedom and consumption.
We also construct and reconstruct information to make it less uncomfortable, leading to socially organised denial that shape the way we interpret and respond to the challenges of climate change. The evolution of standard narratives about climate change provides an example.
In Australia the media focus on our relatively low gross national carbon emissions (1.7% of world total). Focusing on country emissions rather than per capita emissions, or even the fact that this 1.7% total places us at number 14 of national emitters among 190+ countries, can lead us to frame our perceptions against “perceived” big country emitters. Frequent calls for the need for an international response play down the fact that domestic action is required in any case.
As Bill Gates aptly pointed out on the 7.30 report this week, Australia’s effort to price carbon is admirable but also simply a responsible domestic action. He compared Australia with the US which despite not having a national carbon price, sports regional systems that encompass close to 45% of the country’s economy. Moreover, per head of population, the US is spending far more on clean energy research than any other country. Far from defending the US, Bill Gates was simply pointing out that each nation has to make domestic decisions to contribute to the greater whole, and different nations may choose different actions.
Policy makers need to be aware of these individual and social barriers to action, and treat policy options accordingly.
Two policy areas are especially relevant: communications and institutional measures.
From information to communication
Information, education, and awareness-raising are insufficient at best and may be counterproductive at worst. There are at least two potential avenues for a better approach in coverage of climate change.
First, creating the right communication opportunities and avenues to communicate requires more interaction between journalists and scientists. Second, communicating climate change needs to shift away from an information-driven approach to a group-centric one. Both scientists and the media need to work together on enhancing the group salience of the messages they relay. Well-designed climate communication campaigns that address individuals as members of a local community and not powerless members of an unmanageably large group can empower them to act. Third, “greenwash” from business and government needs to be both limited and “named and shamed” to avoid public confusion and public backlash.
A valid question is whether detailed public understanding of complex issues such as climate change is feasible, and even necessary, for effective policymaking. The answer may be no, or at least not always. Much policy making is based on technicalities fully ignored by the public. Few people understand the intricacies of trade policies affecting the price of the food they buy and eat.
Yet discounting the importance of information altogether would probably be a mistake. Some excellent recent and ongoing research that can be found on the US Behaviour Energy and Climate Change conference portal vindicates the assertion that information is key for the public to back costly measures. The benefits of providing more accurate information about people’s consumption decisions—say, through carbon labelling and smart power meters have been observed. Similarly, opposition to environmental taxes seems to decrease once the public fully understands that they are a way not simply to raise money, but to change behaviour and reduce a negative externality.
Institutional measures
Beyond communication, a key question for climate policy is to design interventions that take into account psychological and social constraints to positive action.
The design of effective adaptation interventions should include measures that reduce the transaction costs for individuals in making decisions while enhancing the ownership of the information available. One way to achieve this might be for adaption strategies to be informed by communities’ own perceptions of risk, and be framed as an opportunity to act, highlighting the perceived benefits of action.
There are already many such success stories in Australia at the local government level. For example, Newcastle’s highly-regarded “Climate Cam” programme has reportedly achieved a 28% reduction of GHG emissions since 2008.
In South Australia, Victor Harbour, a town of 15,000, has developed a comprehensive climate change programme with extensive community consultation that has installed 2100 rooftop solar panels, has generated 24 installation jobs for electricians, established a micro wind turbine manufacturing facility, saved local ratepayers over $350,000 in utility charges and replaced all existing street lighting with solar powered lighting.
Climate policy should heed people’s tendency to favour local and visible outcomes.
To most, the benefits of mitigation and adaptation are distant, abstract, and uncertain, while its actual and associated costs are immediate, concrete, and certain. Interventions can be devised to better highlight upfront the “ancillary” benefits. For instance, cost benefit analysis (CBA) of energy-efficiency projects often do not include non-energy co-benefits. These include public health benefits from cleaner air and water, improved comfort of building occupants, increased labour productivity, and increased jobs through the multiplier effects of switching energy expenditure.
Paradoxically there are instances where opponents to mitigation actions use CBA to “enhance” intangible costs to support their case. I experienced this first-hand in recent months while working on a container deposit programme for WA, whereby consumers could return their beverage containers to depots and receive a 10c refund. This program will cut visible litter while also cutting costs and increasing efficiency of kerbside recycling.
I was confronted with a plethora of industry-sponsored CBA studies that inputted “guestimates” of “inconvenience” to consumers that such a programme might entail, for example by calculating that an average consumer would need to make 30% more trips to the local supermarket to return their containers.
These unsubstantiated “inconvenience” inputs added as much as 45% to the cost estimates provided by industry, and naturally supported their claims that such programmes were not viable. Coca Cola Amatil, one of the chief purveyors of many of these CBAs and a principal opponent of such schemes, has today been taken to task by the grass-roots organization GetUp, whose video reveals more about Coke’s actions in response to a proposed program that has been working flawlessly for decades in most European countries and in neighbouring South Australia.
Community Based Solutions
These measures are obviously not sufficient to ensure the success of climate policy. But they might well prove to be necessary. Encouraging behaviour change for mitigation and adaptation goes well beyond providing additional information, finance, or technology. Traditional measures can be complemented by alternative types of interventions, often at low cost. Rather than simply treat these social and psychological drivers of behaviour as barriers to adaptation and mitigation, policymakers have the option to use them to build more effective and sustainable policies and interventions.
Psychologist, social psychologists and behavioural economists are making great progress in helping understand where rational economic approaches to addressing climate change continue to fail, while simultaneously indentifying new effective methods to tackle this complex challenge.