Article

Behavioral environmental economics: Promises and challenges

Rachel Croson, and Nicolas Treich

Abstract

Environmental issues provide a rich ground for identifying the existence and consequences of human limitations. In this paper, we present a growing literature lying at the interface between behavioral and environmental economics. This literature identifies alternative solutions to traditional economic instruments in environmental domains that often work imperfectly. But it also faces a set of challenges, including the difficulty of computing welfare effects, and the identification of a robust environmental policy based on context-dependent (socio-) psychological effects. We illustrate our critical discussion with two behavioral schemes that have been widely implemented: “green nudges” and “corporate environmental responsibility.”

Keywords

Behavioral economics Environmental policy Nudge Corporate social responsibility Environmental psychology;

See also

Published in

Environmental and Resource Economics, Springer Netherlands, vol. 58, n. 3, July 2014, pp. 335–351