What makes consumers tick when it comes to the climate emergency?

Pricewatch: Price mechanisms are crucial to long-term decision-making, says behavioural scientist Pete Lunn

Last weekend Pricewatch spoke to Dr Pete Lunn, the founder and head of the Economic and Social Research Institute’s behavioural research unit, at an event in the Irish Museum of Modern Art.

It wasn’t a casual chat but rather a public interview which focused on how we, as consumers, view the climate crisis and what shapes our spending decisions when it comes to the environment.

Towards the end of the conversation we asked the good doctor how people 100 years from now might look back on this current phase of the climate crisis and how we responded to it.

We were asking Dr Lunn, a scientist who deals in facts and data, to step outside his comfort zone and into an entirely speculative zone.


But he didn’t miss a beat and suggested that one of the questions future humans would most likely ask about the present ones was: how could we have been so stupid? ”All of the information was there. All you had to do was look for it properly,” he said.

His comment sounds harsh but the conversation that preceded it made it clear Dr Lunn recognised that the odds are stacked against us when it comes to making the right calls now. That is despite a recognition among most people of the need to take action when it comes to the climate crisis and a clear willingness among most people to do more.

He pointed to research carried out by his team at the ESRI which assessed how much we care about the environment. “You can imagine the different ways you can do that,” he said. “If you ask someone if they care about the climate, obviously they’re inclined to say yes, it’s pretty socially unacceptable to say no.

“Another thing you can do this be more subtle [and] say to people totally out of the blue: ‘What do you think the biggest issues facing the country are now and just ask them to write them down. What you discover is that health and housing come up really high and the climate emergency comes third.”

He says Ireland is fortunate to have “a very high level of concern about the climate and we have almost no climate deniers. [They] make up less than 2 per cent of the population based on our measures [and] in most other developed countries we would be looking at double figures for the proportion of the population who are in denial about the science.”

Consumers who care can, however, feel overwhelmed by the scale and timing of the problem, which makes making the right decisions difficult, he said.

“One of the classic findings of behavioural science is that people discount the future really sharply,” said Dr Lunn. “That is to say anything that’s going to happen in terms of rewards or outcomes, you know, a month, a year, five years, 10 years from now will alter your decision-making far, far less than something that’s going to happen this morning or tomorrow afternoon.”

He said that as humans we “are really, really bad at long-term thinking. We are not designed to make decisions that have an impact in 30 or 40 years’ time, so what you have to do is build systems to help us to do that.”

The ESRI has studies which show people really want to behave in pro-environmental ways but struggle with the understanding of what is behind much of the problem

This is where price mechanisms come in. “If you really want to change the way people behave, you make the things that cause the damage more expensive. That is what a carbon tax is all about. It’s about making that day-to-day decision easier by building it into the price of goods.”

He stressed the positive rather than the negative aspects of this approach. “If all we’re doing is building systems that are punitive, don’t be surprised if we don’t get a lot of support. We’ve got to build things that are really positive, that make people enthused, where the long-term benefits are good but also where the immediate benefits are there too.”

The ESRI has studies which show people really want to behave in pro-environmental ways but struggle with the understanding of what is behind much of the problem. “It is safe to say that people are hopeless. And I’m not surprised, because my team were hopeless at it when we first designed the task. People know that flying generates greenhouse gas emissions, although they do tend to underestimate quite how much it generates,” said Dr Lunn.

He said people tend to think that the pro-environmental actions that have the greatest benefits “are those that for the last 20 or 30 years we’ve told them to do. So people greatly overestimate how important recycling is for greenhouse gas emissions. They greatly overestimate things like using reusable bags. They underestimate the impact what they eat has.”

Outside of understanding, another big challenge is getting people to pay attention. “And that’s not because people don’t care; they do care. It’s because they care about lots and lots of other things and they’re living busy and complex lives [and] unless as a society – and that means the grubby business of politics – we build systems that are convenient for people, that help people to make the right decisions to reward people for making the right decisions, we won’t get the kind of behaviour change that we need.”

Carbon tax

His team has measured people’s willingness to pay the carbon tax. “It will come as a big surprise to you to learn that, actually, more people in Ireland think the carbon tax should be increased than decreased. I’ve never in all of my professional life come across a tax that people thought should be increased more than should be decreased.”

And he noted that if people do a short quiz on the climate crisis – “a very quick and dirty education” – their support for increasing the carbon tax “goes up markedly”.

However, he added that people are suspicious because “they don’t really believe it is actually having benefits for the climate and they think it’s just another way for the government to raise revenue”.

He pointed to the popularity of greenwashing as more proof that people are willing to pay more, as companies would not bother putting environmental claims on packaging if they didn’t think people would pay a premium for such products.

“I’d rather people were paying less, I’d rather products that are causing the damage had a tax on them [so] other ones are cheaper. If people are willing to pay more then it’s got to be the case that we regulate that information well enough that it is reliable.”

It is, he noted, “difficult when you’re going around the supermarket and you’ve already got a huge amount to think about. You’ve got to worry about the fact that your kids like totally different things, have absurd brand preferences and will be hugely disappointed if you come home with the wrong thing.

“And you’re trying to juggle all of this while being barged out of the way by somebody with a trolley. And you’ve also got to worry about what your partner likes too and then, finally, you might even start thinking about what you might want to eat over the next few days. Am I going to start looking at packaging, turning it over looking at the environmental footprint of what I’m buying and then deciding whether to buy a certain type of vegetables that are in a certain type of packaging versus another type of vegetable in another type of packaging for each and every one of the products? I’m not and consumers don’t.”

He said the industry wanted to make it about consumers but there is “no way from a behavioural science and behavioural economics point of view that individual responsibility can ever be taken, because the decisions you’re asking people to make are too difficult, too complex. The only way to do it is through regulation.”

He pointed out that in many areas there are “really big private-sector lobbies [and] the minute they see regulation coming down the track they pay smart, argumentative people to go out and get counter research and go talk to government. They are lobbying all the time and it’s only if there is enough political pressure coming to bear the other way that we can beat that kind of lobbying.”

Dr Lunn said businesses need to be told: “If you keep doing what you’re doing, we’re going to fine you for it. You’ve got to make your profit by doing something cleaner and you have to do it credibly and you then have to fight the lobbyists off and that takes publicly-funded research to help you combat the lobbyists.

“But it also takes political pressure. It also takes people to say: ‘Look, this does matter to us a lot and we really want something done about it.’ It’s only when politicians really start to feel that someone might vote against them if they don’t act on these issues and they don’t seem to take on the business lobby that we will really get that kind of action.”

He said people “instinctively know that our fight against climate change is a collective one, so when we see other people making the effort and doing things that we could do, we become more inclined to want to do it. Those social forces become really important.

“And government supporting those social forces becomes really important, because you get a tipping point. You get situations where if enough people start retrofitting and it becomes one of those norms that people who’ve got the savings and the ability to do should do them more, and more people will do it.”

He was gloomy about what was needed for more collective actions to be taken. “It pains me, as a behavioural scientist ... that we have to wait for something immediate to happen that looks terrible. It needs to be something that’s emotional, it needs to be something that grabs us.

“Science and history suggest people know that it’s going to take those more visceral and emotional impacts before we really start pulling together doing something about it [and] in the meantime it’s vital that the dots are drawn between the calamities of the weather-related events that we are seeing happening around the world.”

Financial decisions

By coincidence we heard from the ESRI’s behavioural research unit on an entirely different matter in the middle of last week. It is trying to understand more about how people in Ireland make financial decisions such as taking out mortgages, loans, bank accounts and credit cards so that they can help people get better deals.

The research is funded by the Department of Finance and the unit is looking for volunteers to do two short, anonymous online surveys. If you are over 18 and have a mortgage, loan, credit card or current account or if you plan to get one of these in future they want to hear from you. Everyone who takes part will get advance access to a new app that takes a user-friendly and fun way to show you how to get a better deal, whether you already have one of these financial products or are just looking. Sign up here: www.esri.ie/survey.