Nudge: The Final Edition

by Richard H. Thaler

Companies that end up on the list have strong incentives to reduce their emissions. Even better, companies are motivated to ensure that they do not end up on the list.

Governments should be creating a greenhouse gas inventory (GGI), requiring disclosure by all significant emitters.

Extreme climate events are becoming increasingly common, and a great deal could be done to draw attention to emissions trends, including which parties are part of the problem and which are creating solutions.

the goal is to make the environment cleaner, a simple idea is to make the green option the easy option. And if the goal is to make it really easy, make it automatic.

Architectural solutions, making things easy or automatic, can have a much bigger impact than asking people to do the right thing.

Opower, a company now owned by Oracle, created a vivid nudge in the form of the Home Energy Report, which gives customers a clear sense of how their utility bill compares with the norm in their neighborhood, and what they might do to save energy.

For individuals, climate change is the mother of all free-rider problems, compounded by behavioral biases; the same is true for nations. Large-scale emissions reductions are going to be essential for poor nations as well as rich ones, and that creates real challenges for international negotiators. To get those reductions, we are going to need to change incentives, if for no other reason than to stimulate the kinds of technological innovation that will be necessary to make breakthroughs. Incentives can come in many forms; for example, taxes, subsidies, target dates, and contests. But better choice architecture, and a lot of nudges, can also play an important role.