CHALLENGING THE ASSUMPTIONS OF ENVIRONMENTAL POLICIES – RE-HUMANISING DECISION MAKING

Abstract

Mainstream policies regarding energy efficiency are based on the assumptions of traditional economic models of rational choice and ignore findings from behavioural economics such as cognitive limitations, self-control problems and social preferences. On the other hand, behaviourally-informed (BI) policies that take into account these limitations have a reductive perspective focusing exclusively on nudging. Over 196 behavioural insights units and initiatives across the world mostly focus on testing nudges with the use of randomised controlled trials (RCTs). Yet, this approach does not allow to detect the behavioural mechanism responsible for the success or failure of the nudge in order to apply findings to other policy contexts. Besides, RCTs focus exclusively on the choice architecture, ignoring external constraints therefore nudges might fail to address structural barriers, such as lack of access to capital or lack of awareness. The debate is often artificially truncated to nudge (soft paternalism) vs. traditional policies (hard paternalism), arguing that nudges are more cost-effective. We propose a new approach in BI policies, that includes traditional policies such as economic subsidies, information provision and mandates. And in which nudges are not used as alternatives to traditional policies, but rather as a way to boost their effectiveness, given the evidence of the behavioural failures. The evidence-based elaboration of the new version of the Flemish energy performance certificate serves as case study of this new approach in BI policy, in the context of energy efficiency policies, using a range of qualitative and quantitative research methods. A change of paradigm in policy making is needed - findings from behavioural economics should challenge the assumptions, influence the choice between alternative policies, their elaboration and implementation.