IndexIntroductionBehavioral Economics TheoryThe Behavior of Others MattersHabits MatterPeople's personal expectations influence how they behavePeople are loss averse and hold on to it that they consider "their own"People need to feel involved and effective in making a changeConclusionReferencesIntroductionEnvironmental degradation, especially in the form of climate change, is a global political issue. Despite agreements made by most countries, the United Nations reiterates the need for urgent action to combat climate change and its impacts. This essay addresses the issue of unproductive environmental policy and looks to the discipline of Behavioral Economics (BE) to understand how we can achieve a more effective strategy. Briefly there will be an introductory overview of BE theory as an improved tool over neoclassical rational choice theory when applied to this problem. The main argument supports examining climate change as an urgent environmental issue and appropriating BE theory to improve environmental policy. This is largely understood by studying its usefulness in ways that protect the environment through reducing human-caused contributions to climate change. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The topics culminate in 5 subtopics, each examining a different perspective of BE theory. These subtopics will draw on examples such as recycling, food, and travel behavior versus areas where BE may ultimately influence human-induced climate change. Each topic requires a different appropriation of BE theory and subsequently shapes different perspectives on its use. In conclusion, this article will propose relevant ideas on how BE theory could influence the direction of public policy changes. Furthermore, it will present initial ideas on how this might be achieved with caution over recommending further research. Behavioral Economics Theory Behavioral economics studies how people make economic choices. As an area of ​​research, it has received attention for its questioning of assumptions derived from neoclassical economics, particularly traditional economics and the rational choice theory that underlies it. Rational choice theory states that individuals, as the name suggests, are rational in making their choices, use all freely available information in doing so, and make these choices out of self-interest. (Organization for Economic Co-operation and Development, 2012, p. 1) Robert Cialdini (author of the best-selling title 'Influence') attributes the academic fields of BE and social psychology to a golden age now discovered in behavioral sciences. (Samson & Cialdini, 2018, p. VII) This statement provides an accurate overview of the framework in which BE operates, drawing on psychological and sociological insights in its quest to challenge the assumptions of rational choice theory. To draw influence from these fields, it is necessary to carefully consider how BE theory should be applied to a cause, as these fields of influence are not necessarily comparable or consistent. For example, a psychology-based economic approach relies on theories that focus on individual people/organizations. They could incorporate a theory such as the “Theory of Planned Behavior” where behavior manifests internally fromconscious thought or simply by "intention". In contrast, the “Attitude-Behavior Context” model understands that behavior is performed by both the individual and his or her environment. (UK Department for Transport, 2011, pp. 45-46) Despite their differences, both theories assume the deliberation of the individual, although neither considers habits, which are prevalent in other theories. Theoretical sociological approaches still differ with an emphasis on behavior as determined by factors beyond the individuals themselves, relevant examples of these factors might be transport infrastructure or waste management policies. These social practices can basically be reduced to 3 elements; things, skills and images/meaning. Understanding these determinants is central to these theories of behavior. (UK Department for Transport, 2011, p. 8) The hybrid influence of social psychology produces more nuances that contradict rational choice theory. Here we can understand behavior from the perspective of beliefs and attitudes (Avineri, 2012, p. 513), physical, cultural, economic constraints (UK Department for Transport, 2011, p. 7) and approval and of social status. (Brekke & Johansson-Stenman, 2008, p. 281) Interdisciplinary approaches, therefore, have provided BE with the arguments to examine, or re-examine large questions where prevailing rational choice paradigms may have hindered the path to effective solutions. Concentrated research conducted by (UK Department for Transport, 2011, p. 11) suggests that we can maximize the value of behavioral approaches by focusing on specific behaviours. This is an important point to remember when tasked with applying BE theory to inform policy outcomes, for example. A recent report on the United Nations (UN) Sustainable Development Goals provides updated information on challenges facing the environment. It has set many objectives, to be achieved by 2030, from which we can learn important issues on which BE can lend itself. Of importance is Goal 13, climate change and its impact, characterized by the urgent need for intervention. (United Nations, 2018, p. 10) Today it is believed that its changes are mainly due to human activity, (Brekke & Johansson-Stenman, 2008, p. 281) and this idea is crucial when referring to the intervention of science behavioral Most countries have now joined the Paris Agreement to provide information on their contribution to climate change. So far, developments in climate change policy have yet to fully materialize due to a “free-rider” problem. (Bhargava & Loewenstein, 2015, p. 399) The problem arises from a country realizing that it can save costs by trying to reduce emissions because it can profit from sincere actions taken by other countries. (Brekke & Johansson-Stenman, 2008, p. 288) A look back at traditional economic theory could help us understand this stagnation. On this topic Avineri (2012, pp. 519-520) promotes further insights into climate change behavior understood across cultural and geographic contexts, including a BE-led research agenda to better understand climate change mitigation. Furthermore, Bhargava and Loewenstein (2015, pp. 399-400) in their work on public policies attest that BE has a positive role in addressing climate change, the expansion of which could strengthen public support for economic policies. Specifically in the environment, BE adds value to public policies by providing mechanisms to influence theenvironmental behavior, since many of the so-called choices that influence environmental outcomes come from different motivations. (Organization for Economic Co-operation and Development, 2012, pp. 1-2) Indeed, this is where BE theory has a niche as it can use tools to influence decision-making by understanding the motivations that emerge from the behavioral sciences. A great example of the influence of BE theory on decision making comes in the form of a “nudge,” a simple and inexpensive way to change behavior using choice architecture. This was recently elaborated by the United Nations Environment Program which attributes BE to designing sound and cost-effective policies that promote more sustainable consumption behaviors by improving existing choices. (United Nations Environment Programme, 2017) At the government level, nudges are considered largely politically acceptable because they improve the public good for progressives while minimizing government intervention and preserving personal freedoms for conservatives. (Samson & Cialdini, 2018, p. IX) Typically, the use of wing thrust is most effective when applied to “automatic” behaviors in a controlled environment. (Avineri, 2012, p. 519) An example would be a coffee vending machine where certain levels of water or sugar are presented as an automatic option when ordering. Alternatively, print quality/ink usage is automatically assumed without further specification. Perhaps we could interpret them as “defaults”. Complying with predefined rules while taking into account environmental impact can have remarkably large effects, potentially these effects could overshadow attempts at moral suasion, economic incentives or educational initiatives. (Sunstein & Reisch, 2014, p. 128) The idea of ​​default presented through BE theory when applied to environmentally sensitive contexts is often referred to as the “green default.” Sunstein & Reisch (2014) review environmental default settings in depth and generally recommend them because they can significantly reduce environmental harms associated with products and activities. Another policy-relevant recommendation is the benefit of reaping the gains of green defaults while still giving people free choice. As mentioned above, BE theory takes into account non-rational choices and in an environmental context must address a complex set of motivations. According to (Avineri, 2012, p. 514), (Dawnay and Shah, 2005) set out a number of key principles relating to these numerous motivations, some of these will now be used as headings (iv) to further examine the value of BE theory to a variety of environmental issues, especially with respect to climate change. The Behavior of Others Matters A strong theme in BE theory's contention with rational choice theory is that there is more to making an individual choice than simple self-interest. In the transport sector, for example, climate change linked to travel choices constitutes a social dilemma rather than an individual problem. (Avineri, 2012, p. 517) Social pressure is particularly effective in promoting green alternatives and influencing behavior, since individuals in this area prefer to integrate, even wanting to appear generous. (Garcia-Sierra, Van den Bergh, & Miralles-Guasch, 2015, p. 301) Furthermore, it is clear that the successful introduction of such ideas can become a contagion, since the willingness to contribute to good social causes also increases with simple perception of the contributions of others. (Brekke & Johansson-Stenman, 2008, p. 289) according to (Levitt and List, forthcoming). When theSocial norms support this type of action and people are environmentally educated, which can motivate pro-environmental behavior that spreads with little persuasion. (Garcia-Sierra, Van den Bergh and Miralles-Guasch, 2015, p. 298) In these cases Garcia-Sierra, Van den Bergh and Miralles-Guasch argue that a green alternative should be presented as the recommended default option in an architecture of choice system, (2015, p. 301) in fact this is a simple way to promote green alternatives, simply by exploiting the default bias. (2015, p. 295) Habits matter We can understand human behavior as largely habitual or non-habitual. Where non-habitual behavior arises from consciousness (the reflective mind), habitual behavior is more subconscious and routine (the automatic mind). (UK Department for Transport, 2011, p. 6) Habitual choices have been found to exist in the wider environmental context and a cost-benefit analysis is often not carried out by individuals when making relevant choices. (Sunstein & Reisch, 2014, p. 152) Since behavior in this case tends to be driven by the subconscious, using defaults must be a carefully constructed process and habits of choice play a significant role in this for a number of reasons. First, the default rules may not be "work" simply because people have a strong enough preference to contend with them. (Sunstein & Reisch, 2014, p. 144) Travelers, for example, rarely change their behavioral traits. (Garcia-Sierra, Van den Bergh, & Miralles-Guasch, 2015, p. 295) On the other hand, situations may arise where habits may make people more susceptible to the influence of nudges that may not be very beneficial for them. According to (Just & Gabrielyan, 2016, p. 28), (Wansink & Sobal, 2007) state individuals make hundreds of food-related decisions daily. Such a cognitive task is overwhelming and here individuals must fall back on habits. Therefore, food-poor individuals are vulnerable to behavioral cues relative to other choice factors such as price and nutrition. (Just & Gabrielyan, 2016, p. 30) This is symptomatic of a larger problem since, according to (Just & Gabrielyan, 2016), Schaffner (2014) stated that current prejudice is one of the main reasons why those in poverty he makes bad economic decisions. People's personal expectations influence how they behave. Although nudges have clear benefits, Avineri (2012, p. 519) reminds us that they do not make objective changes to available choices or impart much knowledge to individuals. As an illustration, research on recycling behavior has discovered a “moral licensing” effect, where resource conservation in one sector (which may have been suggested by BE theory) leads to resource waste in another. (Trudel, 2016) The study found that individuals are less likely to recycle distorted items and more likely to recycle items linked to some elements of their identity. Referring to (Reisch, 2003), Sunstein & Reisch (2014, p. 129) note that an individual deciding on ecological behavior may be driven by the desire to act in accordance with idealized self-conceptions. Solutions to these recycling problems proposed by the author involve minimal distortion, easy opening of packaging and the creation of strong ties to identity. Disposal-related biases are addressed on an individual level to increase the effectiveness of environmental ideals. (Trudel, 2016) The application of BE theory here recognizes and seeks to preserve existing behavior, rather than a workaroundthrough nudges or choice architectures, since, as mentioned above, these often do not educate to inform choices or face resistance from existing behavior. With further research, approaches like this could be ready-made solutions for environmental policy. People are loss averse and cling to what they consider "theirs." So far, we can understand that BE theory has inputs on decision making through often habitual behaviors related to social behavior and self-expression. We can understand that these factors have weight behind them (inertia) when people are presented with new choices. BE theory often advocates default choices that prioritize maintenance of the status quo over broad, beneficial change, or simply states that "people dislike losses much more than they value corresponding gains." (Sunstein & Reisch, 2014, p. 143) Known as loss framing, it is strongly present in the architecture of choices. Avineri (2012, p. 517) also supports this technique within information measures to instigate change in travel behavior. Avoiding loss is closely linked with decision inertia, as it wishes not to disturb the decision-making process too much. As such, choice architects have more power in small changes than in larger ones, a change that is sudden and inconsistent with preferences is likely to be rejected. (Sunstein & Reisch, 2014, p. 142) In the case of green defaults, this can encourage selection if appropriately framed through loss aversion. (Sunstein & Reisch, 2014, p. 154) For example, when it comes to changing the energy supply, it may be possible to encourage the choice of an environmentally friendly option as long as the cost of switching (inertia) is considered low. (Garcia-Sierra, Van den Bergh and Miralles-Guasch, 2015, p. 298) with reference to Löfgren et al. (2009). To understand the meaning of inertia and (at the meta level) loss aversion, consider Sunstein and Reisch (2014, p. 157) who note that getting people to identify and make pro-environmental choices can be costly when a Green choice is not automatic. People need to feel involved and effective to make a change. Previously we have understood the theory of BEING in different forms applied to different causes. Fundamental to the understanding and application of these principles is that there is a presumption of relevance for those making the choice. Some research suggests that environmental issues will not move people to take serious action unless the issue is urgent and may have an imminent effect on them. (Mitomo & Otsuka, 2012, p. 406) In an era where information on environmental issues is more abundant and easier to access, an increase in awareness is perhaps expected (Mitomo & Otsuka, 2012, p. 400) and perhaps worry. The reason this does not manifest in change could be attributed to an “intention-action gap,” where claims to behave sustainably and conserve resources do not manifest in actual behavior change. (United Nations Environment Programme, 2017) According to (Mitomo & Otsuka, 2012, p. 401), Kahneman and Thaler (2006) make a clear behavioral distinction between intention/action as two utilities; 'decision utility' created when making decisions and 'expert utility' when taking action. Since these utilities do not need to coincide, green action may never occur even with an abundance of information. The main recommendation we need to consider from this research is that consumers need to be aware that protecting the environment and their own.