 A team of researchers led by the Potsdam Institute for Climate Impact Research (PIK) shows that adhering to climate-related policies actually changes the way people think about what they are doing. People’s interests are far more powerful than what is commonly thought about the book economy. Researchers’ advice to policymakers is to consider changes in the form of policies such as carbon taxes or to build low-carbon infrastructure. “The design of climate change policies depends on economic models. Our research shows that it is possible to develop such models to reflect changes in preferences,” said Linus Mattauch, lead author and researcher at the Potsdam Institute for Climate Impact Research (Climate Impact Research-PIK) and Oxford University.
“Preferences represent values ​​and practices, meaning that basically what you like as a person is not what you choose to eat and what you eat less. Economists often think that you are born with a consistent set of values ​​and preferences that pervade your life. And, most importantly, when you consider that preferences will always be the same, the real transformation of the transition to an unchanging economy is extremely difficult. “Preferential changes have been well documented in the past: When the negative health effects of smoking are exacerbated in education campaigns associated with price controls and prevention, more and more people are quitting smoking – economists rarely understand this as a change in preferences.
Climate policies can change the way people view things
“The price of carbon is crucial to climate change,” said author Nicholas Stern, who published the 2006 Stern Review on Economics of Climate Change. “However, if carbon prices change people’s preferences – and there is evidence that they do – this has consequences. They simply act as consumers: as citizens, they will develop lower carbon preferences, and more environmental protection can be achieved through the amount of tax provided.
“Another example is the redesign of the city,” adds Mattauch. “If the government invests in and makes the city infrastructure less accessible to cyclists, citizens will move away from driving and using public transport or bicycles”.
Reducing the emission of the side of need for the benefit of the planet and humans
One could argue that the pursuit of popular change is something that should not be done by policies. “Our short answer to this objection is: If the public does not disagree on how the preferences are made, it is in danger of being molded again for the benefit of special interest groups rather than in a democratic way favorites can produce better climate policies for all – and help advance the recent recommendation of the Intergovernmental Panel on Climate Change to implement the necessary measures to curb carbon emissions, “concluded Mattauch.
Source Journal Reference: Linus Mattauch, Cameron Hepburn, Fiona Spuler, Nicholas Stern. The economics of climate change with endogenous preferences. Resource and Energy Economics, 2022; 101312 DOI: 10.1016/j.reseneeco.2022.101312
