Nudging as an Environmental Policy Instrument

31 Pages Posted: 27 Oct 2020 Last revised: 24 Feb 2021

See all articles by Fredrik Carlsson

Fredrik Carlsson

Goeteborg University - School of Economics & Commercial Law

Christina Annette Gravert

University of Copenhagen

Verena Kurz

University of Gothenburg - Department of Economics

Olof Johansson-Stenman

Goeteborg University - School of Economics & Commercial Law

Date Written: April 25, 2019

Abstract

We discuss the use of green nudges – nudges intended to reduce negative externalities – as an environmental policy instrument. A review of empirical studies reveals that green nudges can have a sizeable impact on behavior and the environment, but that the effects are context dependent. In the policy discussion, drawing on both the empirical overview and basic welfare-economic models, it is emphasized that while green nudges seem to have a large potential, they offer no panacea for solving environmental problems. Instead, they should be seen as a policy instrument among others in the regulator’s toolbox. In particular, we discuss the potential role of nudging when environmental externalities can be dealt with using optimal Pigovian taxes, and when they cannot. Nudging has a greater potential when such taxes are not available or feasible.

Keywords: nudge, environmental policy, behavior

JEL Classification: D90, H21, H23

Suggested Citation

Carlsson, Fredrik and Gravert, Christina Annette and Kurz, Verena and Johansson-Stenman, Olof, Nudging as an Environmental Policy Instrument (April 25, 2019). CeCAR Working Paper Series No. 4, Available at SSRN: https://ssrn.com/abstract=3711946 or http://dx.doi.org/10.2139/ssrn.3711946

Fredrik Carlsson (Contact Author)

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46 31-773 4174 (Phone)
+46 31-773 1043 (Fax)

Christina Annette Gravert

University of Copenhagen ( email )

Nørregade 10
Copenhagen, DK-1165
Denmark

Verena Kurz

University of Gothenburg - Department of Economics ( email )

Sweden

Olof Johansson-Stenman

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46-31-773 25 38 (Phone)
+46-31-773 13 26 (Fax)

HOME PAGE: http://www.handels.gu.se/econ/EEU/johansso.htm

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