Tackling policy designs: Behavioral change for environmental sustainability

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Tackling policy designs: Behavioral change for environmental sustainability

With insight into behavioral patterns and motivations, policy makers can design cost-effective policies that encourage their target audiences to make sustainable choices.

Ismail, Hussein Ismail, and Abd Elkhalek, Abeer Mohamed Ali. 2021. “Insights from Behavioural Economics to Enhance the Environmental Dimension of Sustainable Development.” International Journal of Business and Economic Development (IJBED) 9 (1) (05). doi:http://dx.doi.org/10.24052/IJBED/V09N01/ART-02.  

Across the globe, people underestimate the future impacts of environmental risks such as climate change. Unfortunately, traditional public policies intended to encourage sustainable behaviors are often met with indifference. These policies are ineffective because they incorrectly assume that individuals make choices rationally and based on consistent preferences. Encouragingly, developed countries have created several successful market-based policies by incorporating insights from behavioral economics. Developing countries and even businesses can also adopt this approach as a more attractive and less costly alternative for environmental sustainability. Environmental policies, if designed to consider behavioral economics, can encourage individuals to translate good intentions into sustainable behaviors.  

An enlightening study by Ismail Ismail and Abeer Abd Elkhalek of the Arab Academy for Science, Technology, and Maritime Transport demonstrates that sustainability policies can be effective when designed with an understanding of people’s behavior. The study explores the linkages between behavioral economics, public policy, and sustainable environmental development. The two researchers surveyed 4000 households in 11 Egyptian provinces and asked respondents about their attitudes towards the following: energy-saving strategies, transportation choices, food production and consumption, and waste management. 

The survey found two main drivers of engagement in, and attitudes towards, sustainable behaviors: costs and environmental awareness. For example, some of the respondents were not in favor of voluntarily paying to address environmental problems. Others preferred public transport because of its low fare – but had little knowledge of its relative environmental benefits. In addition to the main drivers, it was discovered that demographics and education also influence attitudes. For instance, the results suggest that women are more willing than men to adopt sustainable behaviors and are more concerned about environmental issues. Additionally, respondents from universities showed greater awareness and positive attitudes towards sustainability. 

Behavioral economics is a tool for understanding core human behavior patterns. This study reveals some of these patterns: we are low risk-takers,  care about others, and highly value the present. Insights from behavioral economics surveys, like that of this study, can help measure our environmental values. Once policymakers know their constituents’ values, they can design appealing policy incentives that encourage the adoption of sustainable behaviors. In sum, making targeted behaviors the norm for public policy can help people translate good intentions into action.  

Psychology-based interventions have proven to be a more attractive and less costly strategy to encourage sustainable behaviors, compared to traditional incentives such as direct pricing or regulations. Importantly, behavioral incentives achieve tangible results without relying on rule-setting and are also effective in developing countries. To design successful environmental policies, policy makers need to understand the motivations and attitudes that drive their constituents’ behaviors. Designing policies that consider environmental awareness and incentives can help transition individuals towards environmentally sustainable lifestyles. 

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