SNS Research Brief 69. Green nudges as an environmental policy instrument. English summary

Fredrik Carlsson Åsa Löfgren Katarina Nordblom

SNS Analys 2020.12.14

Nudging is not some miracle cure for improving the climate and the environment, but it does play a role as one of several other environmental policy instruments. Nudging is most effective when it comes to choices not perceived by the individual as important. This is concluded by three economists in a new research survey published by SNS. They believe that it is better to strengthen behavioural science expertise at the agency level rather than creating a central nudge unit, such as the United Kingdom did with regards to its Behavioural Insights Team.

SNS Research Brief 69. Green nudges as an environmental policy instrument. English summary 43.1 KB PDF

The interest in using nudging (i.e., influencing people’s behaviour without coercive measures) has grown rapidly in recent years since Richard Thaler was awarded the Nobel Memorial Prize in Economic Sciences for his research in the field.

In a new SNS report, economists Fredrik Carlsson, Åsa Löfgren and Katarina Nordblom present a survey of current research on the impact of nudging in the area of climate and environment, something referred to as green nudging. They show that nudging may serve as an effective complement or substitute for other instruments, but also that it is highly dependent on the context.

Choices perceived by people as insignificant are the easiest to nudge. A classic example here is to hang towels on a hook when staying in hotels to indicate that they do not need to be washed. Important choices or choices driven by strong habits, on the other hand, are not all that easy to change by means of nudging (e.g., getting people to use public transportation instead of going by car).

“Green nudging should be seen as one instrument of among several and not as some form of silver bullet. The method can be effective, but it depends on the context to a great extent. What affects the results is not only how the nudge is justified but also how it is implemented”, says Fredrik Carlsson, professor of economics at the University of Gothenburg.

Several countries, including the UK, the US, Denmark and Norway, have created separate nudge agencies in order to use behavioural research as a policy tool. Sweden, on the other hand, has adopted a more decentralised approach.

“Since nudging can serve as both a complement and substitute for other instruments, they need to be developed together to achieve the desired effect. We believe that this is preferably done by the agencies possessing the necessary expertise. A separate nudge unit involves a risk of focusing on the method rather than on the objective. Using this approach, however, means that you also need to ensure that the right expertise exists at the agencies”, says Åsa Löfgren, associate professor of economics at the University of Gothenburg.

The researchers’ survey shows that there is limited knowledge on how green nudging works as well as that no comparisons with other instruments have been performed.

“It is remarkable that so few empirical studies have been carried out comparing the costs of nudging with the costs of more traditional instruments. We need more knowledge on this so that the taxpayers’ money is used in the best way possible”, says Katarina Nordblom, professor of economics at the University of Gothenburg.