Aiding Decision Making to Reduce the Impacts of Climate Change
Penn collection
Degree type
Discipline
Subject
decision processes
behavioural economics
energy efficiency
mitigation and adaptation measures
choice architecture
Behavioral Economics
Other Earth Sciences
Other Life Sciences
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Contributor
Abstract
Utilizing theory and empirical insights from psychology and behavioural economics, this paper examines individuals’ cognitive and motivational barriers to adopting climate change adaptation and mitigation measures that increase consumer welfare. We explore various strategies that take into account the simplified decision-making processes used by individuals and resulting biases. We make these points by working through two examples: (1) investments in energy efficiency products and new technology and (2) adaptation measures to reduce property damage from future floods and hurricanes. In both cases there is a reluctance to undertake these measures due to high and certain upfront costs, delayed and probabilistic benefits, and behavioural biases related to this asymmetry. The use of choice architecture through framing and the use of default options coupled with short-term incentives and long-term contracts can encourage greater investment in these measures.