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Behavioral Environmental Economics: Promises and Challenges

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  • Rachel Croson
  • 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.” Copyright Springer Science+Business Media Dordrecht 2014

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  • Rachel Croson & Nicolas Treich, 2014. "Behavioral Environmental Economics: Promises and Challenges," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 335-351, July.
    • Handle: RePEc:kap:enreec:v:58:y:2014:i:3:p:335-351
    DOI: 10.1007/s10640-014-9783-y
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