Rotman Management — Spring 2017

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doing something the same way for a while, or in the sense
that someone is recommending that you do something (like
sign up to be an organ donor) unless you decide otherwise.
Making arguments for the default first makes good sense,
because if you’ve been doing something for a while, you
probably had a good reason for doing it in the first place; and
if the government is recommending something, they prob-
ably have your best interest in mind.
However, in lots of situations, there is no default to work
with: there are just two or more choice alternatives, and the
question is, what determines which option you consider
first? In these cases, we have found that the surface attrac-
tiveness of the option matters a lot. Something as simple as
whether something has a nice name can determine whether
you consider it first.
A prime example is carbon user fees. One name for
them is carbon offsets, whereby you can travel across the
country and offset the carbon emissions of your flight by
paying a user fee. Ever since these offsets have been in ex-
istence, their uptake has increased each year. People love
them — in part because they can fly without feeling guilty. At
the same time, carbon taxes, another name for a carbon user
fee, have been very unpopular in the U.S. A few years ago I
wondered, Are the people who love offsets and those who
hate taxes different people, or are they the same, but react
differently to the two labels?
We decided to study this question, and found that the
answer depended on your political affiliation. When the fee
was described as a ‘carbon offset’, 67 per cent of users happily
chose to pay the fee. If it was called a carbon tax, it didn’t mat-
ter for the self-described Democrats in the study: They were
just as likely to pay it (67 per cent.); but for self-described Re-
publicans, the uptake went way down — from 67 to 27 per cent.
When we looked at which option people considered
first, we found that — consistent with Query Theory — when
Republicans heard the words ‘carbon tax’, they said to them-
selves, ‘I hate taxes’, and so immediately looked at the op-


tion without the user fee. But when it was called a carbon
offset — the ‘attractive’ label — they considered that option
first, just like the Democrats, and were much more likely to
choose it.

You have said: “If we can figure out ways to motivate be-
haviour change in the domain of environmental action,
every other looming social issue will become tractable,”
including retirement savings, smoking and obesity.
Please explain.
Thirty years ago, when I started to study decision making
related to climate change, I realized that I was tackling a per-
fect storm, because all of the barriers to making rational de-
cisions apply in this context, and they apply in spades. If you
think about the timeline for ‘fixing’ climate change, it will
take decades — maybe even hundreds of years — but may
require significant sacrifices right now. And yet we know
that humans don’t like to pay costs up front, especially when
the benefits will only come in the future. We also don’t like
to give up comfort, or to give something up for the benefits
of people in faraway places and faraway times. As a result,
we tend to deny the problem or postpone solving it. On top
of all that, there is the collective action problem: What if I
sacrifice today, but the people in China and India don’t? My
sacrifice will be in vain.
Other big issues — smoking, obesity, or saving for your
retirement — face similar challenges, in the sense that the
costs are up front and the benefits come later. ‘I can’t have
my pie today, but in the future, I will be healthy, and I might
even live longer.’ But at least these kinds of decisions are
made for my future self; it is much more challenging to
think about changing the way you live now so that other
people down the road — who you will never even meet —
will have a decent life. That’s why I believe that if we can
find solutions for the most severe example of a behavioural
perfect storm — climate change — solutions to the others
will become obvious.
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