Greener by Default

AuthorCass R Sunstein and Lucia A Reisch
PositionRobert Walmsley University Professor, Harvard University and Harvard Law School/Professor, Copenhagen Business School, Department of Management, Society, and Communication
© 2018 Cass R Sunstein, Lucia Reisch, and Dublin University Law Society
Careful attention to choice architecture promises to open up new
possibilities for reducing greenhouse gas emissions possibilities that go
well beyond and that may supplement or complement the standard
tools of economic incentives, mandates, and bans. How, for example, do
consumers choose between climate-friendly products or services and
alternatives that are potentially damaging to the climate but less
expensive? The answer may well depend on the default rule. Indeed,
climate-friendly default rules may well be a more effective tool for altering
outcomes than large economic incentives. The underlying reasons include
the power of suggestion; inertia and procrastination; and loss aversion.
Climate-friendly defaults are likely to have large effects in reducing the
economic and environmental harms associated with various products and
activities. In deciding whether to establish climate-friendly defaults, public
officials (subject to legal constraints) should consider both consumer
welfare and a wide range of other costs and benefits. Sometimes that
assessment will argue strongly in favour of climate-friendly defaults,
particularly when both economic and environmental considerations point
in their direction. Notably, surveys in the United States and Europe show
that majorities in many nations are in favour of climate-friendly defaults.
I. Beyond Mandates and Incentives
Many people think that the problem of climate change is best handled
through two familiar tools: mandates and incentives. If the world needs to
reduce greenhouse gas emissions, perhaps regulatory mandates should be
* Robert Walmsley University Professor, Harvard University and Harvard Law School.
** Professor, Copenhagen Business School, Department of Management, Society, and
Communication. We are grateful for support from the Programme on Behavioral
Economics and Public Policy at Harvard Law School. This essay draws heavily on Cass R
Sunstein and Lucia Reisch, ‘Automatically Green: Behavioral Economics and Environmental
Protection’ (2014) 38 Harv Env L Rev 127. The treatment is, however, substantially revised,
redirected, and updated to focus on the climate change issue more directly.
32 Trinity College Law Review [Vol 21]
imposed on coal-fired power plants, (combustion engine) automobiles, and
other emissions sources, ensuring significant cuts in a short time. Or
perhaps it is best to proceed with some kind of carbon tax, or with a
national (or international) cap-and-trade programme.
We agree that both
regulatory mandates and incentives, both positive and negative, should
play a significant role in the worlds efforts to come to reduce the risks of
climate change. But it is increasingly clear that such efforts must also come
to terms with something that is potentially both a problem and an
opportunity: human behaviour.
Greenhouse gas emissions are driven, in large part, by voluntary
behaviour, produced by some mixture of perceived benefits, perceived
costs, and perceived social norms. Even apart from mandates and
incentives, changes in such behaviour, produced by new norms and
different kinds of choice architecture, could produce substantial emissions
reductions. Of course, those changes are unlikely to do everything that
must be done. But if a tonne of carbon emissions is valued at an
appropriate level say, around $35, as the United States believed during
the presidency of Barack Obama then even seemingly modest steps could
easily produce monetised benefits in the hundreds of millions, or even
billions, of dollars (or euros). And if any nation is adopting some kind of
Clean Power Plan, designed to reduce greenhouse gas emissions, a
serious question remains: How will such a plan achieve its goals? At least
part of the answer lies in uses of behavioural science, including
behavioural economics our main topic here.
For orientation, suppose that in a relevant community, there are two
sources of energy, denominated greenand grey. Suppose that consistent
with its name, greenis better than grey on climate change grounds.
Those who use green energy emit lower levels of greenhouse gases and
also of conventional pollutants. Suppose that those who use grey energy
save money. Which will consumers choose?
The obvious response is that the answer will depend on the
magnitude of the relevant differences and the nature and the distribution
of preferences among consumers. Suppose that green energy is far better
than grey in terms of climate change and that grey energy costs only very
slightly less. If so, consumers will be more likely to choose green energy
than if it is only slightly better on environmental grounds and if it costs
For a superb discussion, see William Nordhaus, The Climate Casino (Yale 2013).
See Lee Ross and others, ‘The Climate Change Challenge and Barriers to the Exercise of
Foresight Intelligence’ BioScience (2016), available at
[2018] Greener by Default 33
far more. Individual preferences certainly matter. Across a reasonable
range of imaginable differences in magnitudes, we would expect to see a
great deal of heterogeneity across people, nations, and cultures. Some
people do not much care about greenhouse gas emissions, and the
monetary figures will drive their choices. For other people, reducing such
emissions is important, and such people may be willing to pay a great deal
to make the environmentally preferable choice. On standard assumptions,
peoples decisions will depend on the relationship between economic
incentives and underlying preferences.
The standard assumptions are not exactly wrong, but as behavioural
economists have shown, they disregard important variables that do not
involve strictly economic incentives.
Some kind of choice architecture lies
behind peoples decisions, and that architecture may have large effects on
what people choose.
One question involves prevailing social norms.
choices are other people making, and why? If choosers know that most
other choosers are selecting green energy, there will be an increase in the
likelihood that they will themselves choose green energy.
If, by contrast,
environmentalists lament the fact that few people are choosing green
energy, the result might well be to aggravate the very problem that
environmentalists are seeking to solve, by drawing attention to, and thus
reinforcing, a social norm that they hope to change.
And if there is a
widespread belief that reasonable and good people select climate-friendly
products, that norm will exert pressure in favour of green energy.
For a valuable collection, see Eldar Shafir (ed), The Behavioral Foundations of Public Policy
(Princeton 2013).
See Richard H Thaler and Cass R Sunstein, Nudge: Improving Decisions about Health,
Wealth and Happiness (Yale 2008).
See Hunt Alcott, Social Norms and Energy Conservation, (2011) 95 J Pub Econ 1082; Hunt
Alcott and Todd Rogers, ‘The Short-Run and Long-Run Effects of Behavioral Interventions’
(National Bureau of Economics Research, Working Paper No 18492, 2012), available at
See ibid 108295.
Robert B Cialdini and others, ‘Managing Social Norms for Persuasive Impact[2006] 1 Soc
Influence 3, 1012.
ibid 12. Note in particular the finding that drawing public attention to the existence or
pervasiveness of undesirable behaviour can actually increase such behaviour:
‘It is worthy of note that our most ineffective persuasive message simulated the sort of
negatively worded, descriptive norm message that . . . is regularly sent by public health and
community service officials regarding a wide variety of social problems. Our results
indicate that appeals of this type should be avoided by communicators in their persuasive
undertakings. Unfortunately, this is not always the case. . . . For instance, after we reported
the outcomes of the present study [showing the ineffectiveness of park signs containing

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