Green Lifestyles and Social Tipping Points

We introduce the concept of green lifestyles in an economic discrete choice model of consumption behaviour. Agents behave in either a ‘selfish’ or ‘pro-social’ way by choosing different degrees of internalisation of environmental damage from the consumption of an environmentally harmful good. Pro-social behaviour means lower consumption, and is rewarded with warm-glow. Moreover, the agents’ decision is influenced by social norms, which endogenously depend on aggregate choices. The model is developed in a dynamic framework, allowing agents to switch behaviour. Our results show that conventional measures limiting consumption at an individual level may increase consumption at the aggregate level. We characterise social tipping points for sustainability transitions in terms of equilibria bifurcations and hysteresis of population dynamics. The model is extended in different directions, with different types of social influence and with a state dependent warm-glow. This more complicated decision environment gives alternative regimes with either dampening or self-reinforcing feedback in decisions. Three scenarios are identified: for strong social norms positive feedback leads to multiple equilibria. For moderate social norms there is a unique equilibrium. For weak social norms, we obtain periodic dynamics of behaviours. In particular, more informed choices and lower variability across agents are ‘destabilising’, leading to periodic dynamics or multiple equilibria.