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Nudging as an Environmental Policy Instrument

Fredrik Carlsson (), Christina Gravert, Olof Johansson-Stenman () and Verena Kurz
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Olof Johansson-Stenman: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden, https://economics.gu.se/

No 756, Working Papers in Economics from University of Gothenburg, Department of Economics

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 (search for similar items in EconPapers)
JEL-codes: D90 H21 H23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-ene, nep-env and nep-res
Date: 2019-04
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