Psychology and Behavioral Economics Lessons for the Design of a Green Growth Strategy

A green growth agenda requires policy makers, from local to supranational levels, to examine and influence behavior that impacts economic, social, and environmental outcomes on multiple scales. Behavioral and social change, in addition or conjuncti...

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Bibliographic Details
Main Authors:	Weber, Elke U., Johnson, Eric J.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	ADVERSE CONSEQUENCES AGRICULTURE AIR POLLUTION AIR QUALITY ALLOCATION BEHAVIORS BELIEFS BONDS BOUNDED RATIONALITY CALCULATION CAPACITY BUILDING CARBON CARBON FOOTPRINT CARBON OFFSET CARBON TAX CLEAN AIR CLIMATE CLIMATE CHANGE CLIMATE VARIABILITY CLIMATOLOGY CLOUDS CO CO2 COAL COMBUSTION COMPLEXITY CONCEPTUAL FRAMEWORK CONSUMERS COST-BENEFIT CROP INSURANCE CULTURAL NORMS DAMAGES DECISION MAKING DECISION-MAKING DEVELOPED COUNTRIES DEVELOPMENT POLICY DISCOUNT RATE DISCOUNT RATES DISCUSSIONS DISTRIBUTIONAL IMPLICATIONS DNA DOMAINS DROUGHT DUMPS ECOLOGY ECONOMIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC IMPACTS ECONOMIC INSTRUMENTS ECONOMIC MODEL ECONOMIC MODELS ECONOMICS ELECTRICITY EMISSION EMISSION REDUCTION EMISSIONS EMPIRICAL RESEARCH ENERGY CONSUMPTION ENERGY SAVINGS ENVIRONMENTAL ENVIRONMENTAL CONSERVATION ENVIRONMENTAL DECISIONS ENVIRONMENTAL GOODS ENVIRONMENTAL IMPACTS ENVIRONMENTAL PROBLEMS ENVIRONMENTS EXPECTED UTILITY EXPECTED VALUE EXPLOITATION EXPLORATION FINANCIAL COSTS FINANCIAL INSTITUTIONS FLOOD INSURANCE FLOODS FORESTRY FOSSIL FUELS FUTURE CONSUMPTION GAS GLOBAL WARMING GNP GROSS NATIONAL PRODUCT GROUP LEVEL GROWTH POLICIES GROWTH POLICY GROWTH STRATEGIES HAZARDOUS WASTE HIERARCHICAL STRUCTURE HUMAN BEHAVIOR HUMAN BRAIN HUNTER-GATHERERS HURRICANE IDEAS INFERENCE INFORMATION PROCESSING INNOVATION INNOVATIONS INSIGHTS INSTRUCTION INSTRUCTOR INSURANCE INSURANCE POLICY INSURANCE PREMIUM INVESTMENT DECISIONS LEADING LEARNING LIVING CONDITIONS LOGIC LOTTERIES MEMORY MENTAL MODELS METRICS NATURAL RESOURCES NEGATIVE IMPACT NUCLEAR POWER NUTRIENTS OCEANS OIL OPTIMIZATION OPTIMIZATION MODELS PERSONAL RELATIONSHIPS PHYSICS POLICY DECISIONS POLICY INSTRUMENTS POLICY MAKERS PORTFOLIO POWER GENERATION PRECAUTIONARY APPROACH PRECAUTIONARY PRINCIPLE PRICE INCREASES PROBABILITY DISTRIBUTIONS PROBLEM SOLVING PRODUCTIVITY PROFESSIONAL ORGANIZATIONS PROSPECT THEORY PURCHASE PRICE RADIATION RADON RAINFALL RESOURCE CONSERVATION RISK AVERSION RISK MANAGEMENT SIDE EFFECTS SOCIAL FACTORS SOCIAL IDENTITY SOCIAL VALUES SOURCES OF INFORMATION SUBSTRATES SUSTAINABLE DEVELOPMENT SUSTAINABLE GROWTH SUSTAINABLE USE TAXONOMIES TECHNOLOGICAL CHANGE TECHNOLOGICAL RISKS TRADEOFFS UNCERTAINTIES UNEMPLOYMENT UNEMPLOYMENT RATES UTILITY FUNCTION UTILITY MAXIMIZATION UTILITY THEORY VALUATION WEALTH WILLINGNESS TO PAY WISDOM WORLD ECONOMY
Online Access:	http://documents.worldbank.org/curated/en/2012/10/16840415/psychology-behavioral-economics-lessons-design-green-growth-strategy http://hdl.handle.net/10986/12072

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Summary:	A green growth agenda requires policy makers, from local to supranational levels, to examine and influence behavior that impacts economic, social, and environmental outcomes on multiple scales. Behavioral and social change, in addition or conjunction with technological change, is thus a crucial component of any green growth strategy. A better understanding of how and why people consume, preserve, or exploit resources or otherwise make choices that collectively impact the environment has important and far-reaching consequences for the predictive accuracy of more sophisticated models, both of future states of the world and of the likely impact of different growth strategies and potential risk management strategies. The prevailing characterization of human decision making in policy circles is a rational economic one. Reliance on the assumptions of rational choice excludes from consideration a wide range of factors that affect how people make decisions and therefore need to be considered in predictions of human reactions to environmental conditions or proposed policy initiatives. In addition, a more complete and more fully descriptive understanding of decision processes provide powerful tools for policy design that complement legal or economic instruments or may lead to more effective implementation of such policy instruments.

Psychology and Behavioral Economics Lessons for the Design of a Green Growth Strategy

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