People drop support for a carbon tax when getting less effective “nudges”

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A carbon tax would address carbon emissions across sectors, from industry to transport and residential use.
Enlarge / A carbon tax would address carbon emissions across sectors, from industry to transport and residential use.


“Nudge” policies have come in for a lot of positive attention. Small tweaks like changing the default on organ donation to opt in (still allowing people to opt out if they choose) seem to be effective at boosting pro-social behaviors. Nudges also work for things like saving for retirement or using less energy while still allowing people freedom of choice.

But nudges like these are “being used as a political expedient,” wrote economists George Loewenstein and Peter Ubel in The New York Times in 2010. Nudges, they wrote, allow “policymakers to avoid painful but more effective solutions rooted in traditional economics.” Now, Loewenstein has teamed up with colleagues David Hagmann and Emily Ho on a series of studies showing how this operates. Their results, published today in Nature Climate Change, suggest that if people are offered the chance to support a painless “nudge” policy on energy usage, they seem less likely to support a much more effective carbon tax.

Nudge vs. tax

Nudge policies can be implemented in different ways, but one popular tool is to change a default option to the desired behavior—like employers taking monthly retirement-fund contributions directly out of a paycheck or signing people up with a green energy supplier. Because people are still able to choose the non-default option if they prefer, policies like these are seen as not interfering with individual choice while still ensuring that the positive choice is used more often.

Unfortunately, a policy defaulting residents to a green energy supplier probably wouldn't be extremely useful. Even if it reliably shifted behavior in a more climate-friendly direction (and it's not clear that it would), residential energy use produces a relatively small fraction of overall carbon emissions. So the impact of this kind of shift would be limited.

Carbon taxes, on the other hand, would likely have a huge impact—assuming they could be implemented. Passing these taxes is a tricky business, as they would raise the average person's transport and energy expenses. There are ways to offset the pain of a carbon tax by lowering other taxes or redirecting the revenue back to citizens, but those subtleties are often glossed over during public debates.

Hagmann, Ho, and Loewenstein conducted six different studies exploring how the option to support a green energy nudge policy affected people's support for a more robust carbon tax. In the first study, participants were given details on the nudge and the carbon tax and then asked to imagine that they were policymakers who could choose to implement climate policies. Half of the participants were asked whether they would implement the carbon tax and were told that, if they did not implement it, there would be no climate policy. The other half were asked about both the carbon tax and the nudge policy, with the choice to implement both, or either, or neither.

Choices, choices

If people were asked to choose between a carbon tax or nothing, 70 percent of them said they would implement the tax. But if they could choose any combination of the tax or the nudge, only 55 percent supported the carbon tax. This suggests that the availability of a limited, comfortable nudge policy made people more likely to step away from the higher perceived cost of the carbon tax.

There are other ways to explain that result, though, and the five studies that followed dissected these explanations in different ways. Another experiment looked at whether participants maybe just shied away from implementing too many policies at once. So participants were presented with an unrelated “nudge” policy in an entirely different domain—this time, a default retirement savings contribution. Those people who read about the climate change nudge had lower support for the carbon tax, but those who read about the retirement nudge didn't show a drop in carbon-tax support.

A follow-up experiment recruited alumni from the Heinz College of Public Policy at Carnegie Mellon University to see if the same result appeared in people with public-policy training and experience. That still found a similar “crowd-out” effect, with lowered support for a carbon tax when a nudge was on the menu.

There were tweaks that kept carbon-tax support high even in the context of a nudge. When participants were given extra information on how ineffective the nudge policy was likely to be, as well as a description of how the revenue generated by a carbon tax could be used to lower other taxes and create useful funds, support for carbon tax was extremely high—above 70 percent across the board.

Shifting the focus

These results seem intuitive. Without detailed information on how effective different policies are likely to be, it's not surprising that people would go for the option that seems easier and less personally painful. Given the widespread emphasis on personal responsibility in averting climate change, the average person would think that reducing residential emissions sounds like a great plan.

Carbon taxes, on the other hand, can be pretty nebulous and hard to understand. The fact that support for the tax shifted with just a smidgen more information suggests that the problem may be the overall quality of public information on the possible policy responses to climate change.

The results might be intuitive, but that doesn't necessarily mean they're rock-solid. In one case, the results from one study didn't quite replicate in another. The first experiment saw a drop in carbon-tax support from 70 percent to 55 percent, but a replication of this exact condition in the second experiment saw a drop from 72 to 63 percent, which wasn't statistically significant. And because of the complex data and analyses involved, the likelihood of some exciting-looking results popping up by chance was high.

Still, it wouldn't be a huge cost to assume that these results are on to something. This would lead policymakers to change how nudge policies are presented to the public: as a nice little complement to hefty and impactful policies like a carbon tax but not hugely useful on their own.

Writing in Nature News and Views, Alexander Maki points out that citizens are faced with a wealth of climate policy proposals at every level, from local government to international agreements. Trying to understand how people make choices when faced with a range of different proposals is essential—and making sure they have decent information on the efficacy of those proposals is crucial.

Nature Climate Change, 2018. DOI: 10.1038/s41558-019-0474-0 (About DOIs).

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