Why slowing down climate change is hard (and how it might be done anyway)

(featured image: <flooding,jpg> Sue Thompson/Flickr CC BY-ND 2.0)

Countries get together to discuss how to address climate change, but it’s people’s behaviour that needs to change

If, one evening, you were to discover that your house is on fire, I would guess that your response would be as swift as it would be robust: without hesitation or procrastination you would make sure that every member of your household is safely outside, and contact the emergency services. But when was the last time you checked the batteries in the smoke alarms? (You do have smoke alarms, don’t you?)

We are better at addressing what demands our immediate attention than on what is distant and not so urgent – however important it is. Urgent situations that we neglect tend to get more urgent very quickly, so we promptly get the lesson that we had better get our socks on. What is merely important, though, usually doesn’t get more important, or even noticeably more urgent, if we ignore it – and we can continue doing so with impunity for quite a while. When it eventually does become urgent, responding is much harder or more costly – and what’s worse, we rarely learn the lesson.

Nice graph, but I don’t see much change right here, right now (image: Met Office)

In behavioural science, this is phenomenon is sometimes called present bias. Retirement saving is often cited as an example: it is more fun to spend money now than to save it for the dim and distant future. In many ways, climate change – the theme of the COP26 mega conference currently taking place in Glasgow – is similar. We hear that the seven hottest years since 1850 occurred in the last ten years. But for most of us, the consequences are far away or decades into the future. We hear UK prime minister Boris Johnson saying, in his opening speech to the conference, that the world is at “one minute to midnight”. But most of us don’t feel that urgency at all. And so taking action (which would involve giving up things we enjoy) is not a priority.

Climate change may be similar to retirement saving, but the comparison only goes so far. Steering the policy making of nearly 200 countries, the activities of millions of companies, and the behaviour of billions of people away from a potentially rather unpleasant future, that is a challenge of a different scale.

Countries are not people

One important difference is that addressing climate change involves collective action. We can save for our pension and don’t need anyone else to do so, but no single country can slow down climate change just for itself – not Liechtenstein, not China. This is only going to work if countries representing the vast majority of the world population take action together. It’s like a small town, threatened by a wildfire. If every household sends one person to join the volunteer fire brigade, the fire can be put out, but if there are too many who don’t participate, those who do will risk their lives for nothing. The risk is real that everyone waits to see what the others do, and nothing happens until it is too late.

Now in a small town, and with real people, social conformity might well influence behaviour. Provided the town is saved in the end, anyone who failed to join the efforts may well find themselves shunned and ostracized. That prospect might be enough to encourage most people to sign up.  But countries are not people, and the fear of being rejected later on, what would that even mean for a country – being kicked out of the UN? So what?

Political leaders are people, though, and they face the same tension in their policy making that we all experience in our decisions, the tension between the present and the immediate future on the one hand, and the future decades away on the other. In particular, politicians’ time horizon rarely reaches much beyond the next general election. Committing to significant sacrifices in the short term (even if they will – hopefully – deliver benefits in tens of years’ time) is not the kind of choice they believe wins many votes. Just ask Australian premier, Scott Morrison, who “plans to keep coal mines open for as long as possible.

Governments do have leverage

Yet ultimately, it is not countries that must change their behaviour. It’s policy makers, business leaders and ordinary citizens. And this is where governments do have some indirect, but very powerful, levers that can bring about change of the magnitude that will be required.

One such measure is as drastic as they come: mandates. The UK brought forward by 10 years its anticipated ban on the sale of fossil fuel powered cars by 2040, and joins Germany, the Netherlands and Ireland (only Norway is more radical, with a ban from 2025). This is reminiscent of a similar challenge in the 1990s, when emissions of ozone-depleting substances (like the CFCs then widely used in refrigeration) needed to be halted to close the hole in the ozone layer. Germany mandated that new refrigerators should be CFC-free, and the German white-goods manufacturers took op the gauntlet, leading the world in the development of more efficient, ozone-friendly products. We see a similar response now, with Ford committing to selling only electric cars in Europe from 2030 and Jaguar becoming electric-only by 2025. When business gets a clear, realistic steer from governments, such wisely formulated mandates can – and do – provide the necessary focus for profound behaviour change.

In a sense, this way of announcing a decision well ahead of when it will be implemented echoes a classic behavioural intervention in retirement saving: the Save More Tomorrow approach, developed by Nobel laureate and nudger extraordinaire Richard Thaler and Shlomo Benartzi. Its core idea is that workers commit now that they will allocate a portion of a future pay rise to their retirement fund. This time delay lowers the threshold of making the decision itself – including for political leaders! – and reduces the chance they get cold feet and postpone the decision when the time has come.

But electric cars (and heat pumps instead of gas boilers etc) alone won’t fix the problem. Ultimately, it is every individual’s fossil fuel usage that needs to be cut. Some of that we control directly (the energy we use in our households), but there is a big chunk that is encapsulated in the production and supply processes of the products we buy. How can we, the citizens, be encouraged to reduce our carbon footprint? Social proof – copying what other, similar people do to fit in – might help, but there are many obstacles, including present bias, the intention-action gap, and the same collective action challenge that exists at country level.

Not everyone is sold to the idea of a carbon tax just yet (photo: Global Panorama/Flickr CC BY-SA 2.0)

Here, one of the oldest conventional economic instruments in the book holds a lot of promise – and again, it is a policy decision for governments: a carbon tax which, as economist Tim Harford explains, chops the huge challenge up into innumerable tiny, but feasible steps. Even if levies are placed on industry, that will be reflected in the price to consumers. And if they have to pay for every kg of carbon their actions cause to be released in the atmosphere, they will be ready for cheaper alternatives. This will then encourage suppliers to develop them. Whether it’s a holiday flight, a new smartphone, tomatoes from heated greenhouses or simply how we heat our homes, our choices will drive change. (In case anyone is worried that this will hit the poorest disproportionately, I have no doubt that clever economists can devise mechanisms that spread the burden fairly.)

What, no behavioural economics?

So, while it’s not countries and governments that need to change their behaviour, a country’s political leadership can develop and adopt policies that bring about crucial changes in the behaviour of firms and people – altering both supply and demand. But we’ve seen mostly conventional interventions. Is there no way that more behavioural interventions can also provide a nudge, if not a shove?

I am reminded of an op-ed I wrote for a Belgian newspaper in which I made a case for 100% inheritance tax, on the basis of its economic efficiency, and its equality promoting power. It received more than 500 reactions, most of them of outrage: how dare I take away people’s right to pass on their wealth to their children! Well, perhaps there is an opportunity here to make a similar connection to people’s offspring. If that is what they find important, just like they can enhance their kids’ inheritance by making sacrifices now and save rather than spend, they can make choices that help keep the global temperature increase below the threshold needed so generations of their descendants will have a pleasant environment to live in.

Ultimately, all decisions are rooted in emotions. And this emotional connection might be just the cornerstone that provides – at least to parents and prospective parents – that little extra motivation.

About koenfucius

Wisdom or koenfusion? Maybe the difference is not that big.
This entry was posted in Behavioural economics, Cognitive biases and fallacies, Economics, Emotions, politics, Psychology, Society and tagged , . Bookmark the permalink.

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