Beckenbach, F. et al.Behavioral-economic insights for designing environmental policy instruments

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Frank Beckenbach, Maria Daskalakis, Christoph Bühren, David Hofmann, Florian Kollmorgen, Christian Kind, Jonas Savelsberg, Walter Kahlenborn & Stefan Puke

Release date:
December 2016

German Federal Environmental Agency, texts 83/2016

The report on the research project "Enhancing environmental economic instruments - Innovative approaches to improving the incentives for environmental policy instruments - part II" (INCENT II) focuses on the following central question: How can environmental economic instruments be designed in a way that they are more effective for encouraging citizens to act more environmentally conscious?

The research combines theory development and systematization of prior empirical findings with new empirical studies applied to the field of energy saving. The behavioral economic findings offer a number of starting points for the design of new instruments as well as for the specification or development of existing instruments. Within the framework of the INCENT II project, a systematization of instruments was developed that distinguishes between cognitive, interactive, incentive and prescriptive instruments. In an analysis of 30 practical examples and field studies, the effect of these types of instruments was analyzed; the results show that often a mix of instruments is applied and cognitive instruments were most frequently used.

As part of the empirical work of the project, a number of instruments were tested on the design of electricity bills and for labeling running costs of white goods in electronic stores. The analysis for designing electricity bills was done using a survey in vignette style and a laboratory experiment, accompanied by an agent-based simulation. The investigation for white goods was conducted in form of a field experiment over six months in two electronics stores in Berlin. Building on this empirical work, a policy-oriented manual for the development of behavior-based environmental economic instruments was prepared.

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