Difficult Tradeoffs: The Psychology of Energy Decisions and Energy Policy

For a long time the human inaction concerning climate change was justified by a deficit of information. This information is now available: the UN Intergovernmental Panel on Climate Change (IPCC) released the third and final volume of its Fifth Assessment Report in April 2014, which provided massive evidence that climate change is happening now. Sure, it is a massive problem, requiring collective action, involving lot of uncertainties and without any single solution, but, still, why is climate change action so hard?

This inaction can be explained by economic diagnoses (lack of knowledge about technology, principal-agent problems) as well as by psychological diagnoses. These two diagnoses are not mutually exclusive, and Prof. Weber’s talk focuses on the cognitive and motivational barriers that often prevent us from making wise decisions impacting the environment. Behavioral research aims indeed at improving the implementation of political and economic solutions as well as providing an additional currency (like emotions or care for the future generations) while weighting choice options.

The evolution has not provided the humans with appropriate visceral reactions to many environmental risks. Unfortunately, climate change is not perceived as worrying, there is thus no action. Moreover human analytic evaluations are biased towards inaction due to loss aversion, steep discounting of future benefits when immediate consumption is possible or risk seeking in domain of losses (maybe the changes won’t be that bad).

Nevertheless some others human cognitive processes can be harnessed to act on climate change. First, humans have multiple and mutable goals. These multiples goals (material, psychological or social) are often conflicting but they influence decisions only when they are activated. Yet a choice context can affect a temporary activation: for example a legacy motive increases the environmental concern and action. Emphasizing legacy motive can then direct attention to the future. Second, there are multiple ways to represent information. This is crucial as labels trigger different reactions and choices. As a consequence a proper rephrasing (e.g. tax versus offset) can leads to behavior change. Third, decisions can be based on calculation, emotion or rule. Default options which will be implemented in the absence of active choice tend to be processed first and carry an advantage. A careful choice of an environment friendly default option can then lead to change. Fourth, people will object to change. However the initial opposition to change will fade over time as the changed situation become the new status-quo, and then become more difficult to change.

Solutions to environmental problems require broad-based behavior change related to energy use. Nonetheless these behavior changes can be facilitated by reframing or rephrasing labels, by defining pertinent no-choice default option or changing the status-quo.