Does Active Choosing Promote Green Energy Use? Experimental Evidence

Abstract

Many officials have been considering whether it is possible or desirable to use choice architecture to increase use of environmentally friendly (“green”) products and activities. The right approach could produce significant environmental benefits, including large reductions in greenhouse gas emissions and better air quality. This Article presents new data from an online experiment (N=1,245) in which participants were asked questions about hypothetical green energy programs. The central finding is that active choosing had larger effects than green energy defaults (automatic enrollment in green energy), apparently because of the interaction between people’s feelings of guilt and their feelings of reactance. This finding is driven principally by the fact that when green energy costs more, there is a significant increase in opt-outs from green defaults, whereas with active choosing, green energy retains considerable appeal even when it costs more.

More specifically, we report four principal findings. First, forcing participants to make an active choice between a green energy provider and a standard energy provider led to higher enrollment in the green program than did either green energy defaults or standard energy defaults. Second, active choosing caused participants to feel more guilty about not enrolling in the green energy program than did either green energy defaults or standard energy defaults; the level of guilt was positively related to the probability of enrolling. Third, respondents were less likely to approve of the green energy default than of the standard energy default, but only when green energy cost extra, which suggests reactance towards green defaults when enrollment means additional private costs. Fourth, respondents appeared to have inferred that green energy automatically would come at a higher cost and/or be of worse quality than less environmentally friendly energy.

These findings raise important questions both for future research and for policymaking. If they reflect real-world behavior, they suggest the potentially large effects of active choosing — perhaps larger, in some cases, than those of green energy defaults.

Keywords: default rules, green defaults, behavioral economics, forced choice, active choosing

JEL Classification: D03, D91, K32, Q20, Q40, Q50, Q58