A soft approach for better climate and energy related outcomes for disadvantaged communities (II/II)

This is part two of a two-part series on addressing environmental justice issues for disadvantaged communities. You can find part one here.

Abstract

Soft approaches, or nudges, can be useful in addressing issues of equity in the areas and energy and climate justice for disadvantaged communities. The application of behavioral economics is relatively new in the area of climate research and there is, therefore, a knowledge gap currently in understanding the complex dynamics of justice and power in these areas. Not only is a more nuanced approach to climate research needed through newer methods and perspectives, such as intersectional feminist theory, but considerations such as ethics of climate nudging must also be weighed. Beyond an updated macro approach to climate research, specific soft approaches to energy and climate issues, like nudging and boosting, can also benefit disadvantaged communities in related outcomes and decision making. 

Analysis

This paper explores how nudges can help address environmental justice issues resulting in communities of color and other underserved communities experiencing barriers to effective climate and energy related decision making. As part of this exploration, this paper also looks at the environment in which these soft approaches are developed and utilized for disadvantaged communities when it comes to decision making surrounding energy and climate. 

Intersectionality and behavioral Economics

In “Developing an intersectionally-informed, multi-sited, critical policy ethnography to examine power and procedural justice in multiscalar energy and climate change decision making processes”, Ryder (2018) looks at using an intersectional approach to energy and climate justice. Ryder argues that using methodologies like intersectional feminist theory is one way to better account for imbalances in power and justice in decision-making processes (Ryder, 2018). The concept of “intersectionality” was first coined by Kimberle Crenshaw to describe the identities of black women existing in systems of discrimination, with intersecting oppression based on identity (Ryder, 2018). The term has continued to evolve and is now used in an environmental justice context as well as in other areas.

“Intersectionality has begun to be developed in socio-environmental studies, such as feminist political ecology, sustainability, resource extraction, climate change, environmental risk, pollution, urban ecology, and disasters” (Ryder, 2018).

Ryder suggests that conventional approaches to environmental research have left gaps in knowledge by not considering this intersectional approach. “There remains a need to further develop and incorporate issues of scale into justice research as ‘few studies attempt to grasp how environmental justice (EJ) struggles function at multiple scales, from the cellular and bodily level to the global level and back’” (Ryder, 2018). Ryder (2018) proposes one way to do this is to develop methods that include multi-scalar approaches that incorporate systems of oppression, power, and domination. Without a clearer understanding of the overall system of decision making, specifically as it relates to people of color and other disadvantaged communities, empirical research on the impacts of their decision making will not be properly understood. 

Individual impact on choice architecture 

In the Mormann (2022) article, “Climate Choice Architecture,” the author highlights the importance of focusing on both individuals and institutions when it comes to using choice architecture to address climate change. “Behavioral research has proven that minor tweaks to the choice environment can usher in a paradigm shift toward more climate-friendly decision-making” (Mormann, 2022). This article argues that while policymakers often historically focused their attention on areas like the energy sector to address global warming, other areas that involve individuals also have significant impacts on climate change (Mormann, 2022).

One of these areas is the food system which encompasses nearly one quarter of global greenhouse gas emissions. An example of choice architecture in this area is carbon labels on foods. An Australian and American research team conducted two related experiments. One experiment asked participants to estimate the carbon intensity of selected foods, which they consistently underestimated. However, in the other experiment, participants were given a choice among selected foods with carbon intensity labels and participants in the treatment group more frequently chose the lesser-impact foods than the control group (Mormann, 2022). Mormann concludes that by focusing on the individual, climate choice architecture encourages disadvantaged communities and others to take a more active role in climate change and climate justice decision making.

The framing effect and loss aversion

In “People’s decisions matter: understanding and addressing energy poverty with behavioral economics,” DellaValle (2019) examines the impacts of limited cognitive resources and scarcity conditions on decision-making. This study gives insights into the decision making process for disadvantaged communities and how conditions of scarcity can lead to negative outcomes when making energy related decisions and gives insights into how this may be avoided. The author references the “rational actor” theory of behavioral economics in examining issues of energy poverty.

“While several measures have been adopted to address the structural conditions of energy poverty from a top-down perspective, only a few, such as those related to information provision, acknowledge that an understanding of the behavior of vulnerable individuals offers a crucial contribution in reaching better outcomes for themselves and their surroundings“ (DellaValle, 2019).

The article goes on to examine risk aversion through the “prospect theory” of behavioral economics, which also speaks to decision making for disadvantaged communities. This relates to decisions that are presented as gains or losses, also referred to as the framing effect. Individuals experiencing scarcity and stress may weigh gains and losses differently which often results in increased risk aversion toward losses (DellaValle, 2019). If a decision to choose energy efficient technologies, for example, is framed as a way to avoid loss as opposed to a way to increase gain, then beneficial decision making in the area of energy may be increased for individuals already facing adversity (DellaValle, 2019). 

Nudging and boosting

The study by DellaValle & Sareen (2020), “Nudging and boosting for equity? towards a behavioural economics of energy justice” suggests taking advantage of choice architecture to adjust behavior for more optimal outcomes in energy access. This approach utilizes the dual system of thinking as described in “Thinking, Fast and Slow,” by Nobel Prize winner Daniel Kahneman, where System 1 leads to more intuitive decision and System 2 leads to more analytical decision making (DellaValle & Sareen, 2020).

“Due to limited cognitive capacity, System 1 often prevails over System 2, leading to errors. These errors create externalities and ‘internalities,’ or self-imposed costs due to limited cognitive capacity that individuals are unable to internalize” (DellaValle & Sareen, 2020).

Depending on what system is being used, System 1 or System 2, can determine which form of intervention should be employed. By offering an easy or cheap option in decision making, nudging can often utilize System 1, while boosting can harness System 2 by enhancing an individual’s skill or knowledge. The authors go on to describe specific scenarios that indicate whether nudging or boosting is more suitable. For an “information problem” scenario, when the goals of an individual are not known then boosting is preferable. A “multidimensional problem” where an individual might lack the motivation or cognitive ability then a nudge would be useful. For a “political economy problem” where public officials are facing issues of fallibility then boosts intended to support self-nudging is preferred (DellaValle & Sareen, 2020). These are some examples where using choice architecture through nudging and boosting can help in improved decision outcomes for disadvantaged communities in relation to more equitable access to energy.  

The ethics of nudging

Siipi & Koi (2022) discuss the ethics of nudging in “The ethics of climate nudges: Central issues for applying choice architecture interventions to climate policy.” While nudges are often hailed as a soft approach without having to rely on hard regulations, there is still some debate about the ethics of nudging both in the context of climate change and other areas. The article describes a climate nudge as any intentional modification of the choice architecture that aims to alter behavior towards climate-friendly actions while maintaining existing alternatives (Siipi & Koi, 2022). Siipi & Koi focus on justification for nudges; transparency; best behaviors; justification for nudges and justice concerns (Siipi & Koi, 2022). In the context of justice, this article looks at both local and global justice. When looking at nudging and climate change on a global scale, the question of responsibility and burden is apparent for developing countries and disadvantaged communities. On a local level, the burden of cost is also an issue that impacts disadvantaged communities to a larger extent and must be considered when developing climate nudges. Further, the question of who benefits from nudging can be asked as it relates to climate justice.

“Climate nudges are not self-regarding in the sense that they would primarily benefit the nudge…yet the benefits form the climate nudges fall on numerous people – including the nudgee and members of future generations” (Siipi & Koi, 2022). 

Through these and other related studies, it is apparent that research shows soft approaches can help increase beneficial decision making for disadvantaged communities when addressing energy and climate, and how behavioral economics intersects with environmental justice. 

Discussion

Soft approaches can help address environmental justice issues that result in limited tools for communities of color and other underserved communities around energy and climate justice decision making. A dynamic of inadequate research methods of energy and climate justice has resulted in less than optimal outcomes for disadvantaged communities when facing these issues. This pattern impacts a host of issues like energy governance, energy justice, and equitable response to climate change. Analysis of the literature includes using new methodologies like intersectional feminist theory to better account for power imbalances in energy and climate related decision-making, using choice architecture and nudging for more optimal outcomes in energy access, and examining the impacts of limited cognitive resources and scarcity conditions on decision-making.

These are all significant factors that can limit self-beneficial decision making resulting in less than optimal outcomes for disadvantaged communities. Conversely, strategic soft approaches, as mentioned above, can help these communities with improved outcomes in relation to energy and climate justice issues. More research needs to be done to look at the system wide ramifications of historically discounted power structures in energy and climate justice, as well as the effects that specific tools of behavioral economics can have on disadvantaged communities that are disproportionately impacted by climate and energy justice issues. 

References

DellaValle, N. (2019). People’s decisions matter: Understanding and addressing energy poverty with behavioral economics. Energy and Buildings, 204, 109515. doi:10.1016/j.enbuild.2019.109515

DellaValle, N., & Sareen, S. (2020). Nudging and boosting for equity? towards a behavioural economics of energy justice. Energy Research & Social Science, 68, 101589. doi:10.1016/j.erss.2020.101589

EPA. (2022). Environmental Justice. United States Environmental Protection Agency. Retrieved from https://www.epa.gov/environmentaljustice

Kahneman, D. (2011). Thinking, fast and slow (1st ed.). New York, NY: Farrar, Straus and Giroux. ISBN: 978-0-374-53355-7 

Mormann, F. (2022), Climate Choice Architecture. Boston College Law Review, Vol. 64, 2023, Forthcoming, Texas A&M University School of Law Legal Studies Research Paper No. 22-47, http://dx.doi.org/10.2139/ssrn.4096179

Provost, C., & Gerber, B. J. (2019). Political control and policy-making uncertainty in executive orders: The implementation of environmental justice policy. Journal of Public Policy, 39(2), 329-358. doi:10.1017/S0143814X18000077

Ryder, S. (2018). Developing an intersectionally-informed, multi-sited, critical policy ethnography to examine power and procedural justice in multiscalar energy and climate change decisionmaking processes. Energy Research & Social Science, 45, 266-275. doi:10.1016/j.erss.2018.08.005

Siipi, H., & Koi, P. (2022). The ethics of climate nudges: Central issues for applying choice architecture interventions to climate policy. European Journal of Risk Regulation, 13(2), 218-235. doi:10.1017/err.2021.49