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The purpose of this section is to take the information we have gleaned about values and their role in helping to understand environmental problems and add the component of decision-making dynamics, both individually and multiparty, to our understanding. Consider that the process by which people make decisions can have a strong influence on acceptance of public policy in general, and environmental policy in particular (especially where environmental policy often means incorporating costs to the environment that were
previously externalized).1 Having some understanding of how value decisions are made, including the important role incentives play in decision-making, is a critical way of gaining insights into human behavior patterns that help to drive reactions to environmental policy proposals. This section is about introducing some of these behavior dynamics.
Underlying this process are the social mores of society, the ideas behind fairness, equity, and similar collective goals in our societal ideal. The way in which our decision-making process becomes more objective (repeatable) is if we are able to strongly connect the presumptions being made in the process identified above. Specifically, what rationale was used in determining the set of variables for the benefit-cost analysis? Also, how were the weights established for different variables, and what might happen if we change the weights: does changing the weights of different variables change the result?3
1
In some ways environmental policies require people to pay for things they previously did not have to pay for. An example is a tax on carbon to internalize the costs of climate change. None of us have had to pay for the amount of carbon we emit through our actions. Forcing us to pay for this cost (as real as it may be) fundamentally changes our expectations about society. If we always paid for this cost, then we may more accepting (habituated). However, because we are not accustomed to paying the cost we are likely to be recalcitrant, at least up-front.
2
Remember, the weighting is where personal bias (preference) can arise. In addition, the choice of variables also matters; it is possible bias can result in choosing certain variables over others. The point is the process is not entirely objective.
3
A simple example: we are engaging in a benefit-cost analysis of taking action today to curb climate change impacts. Two variables chosen are current generation and future generation (without defining specifically how these variables are distinguished from one another here in the example). In one analysis we weight current generation more than future generation. The result of the analysis is that we do less to curb our actions today because of the harm on the current generation. In a second analysis we weight future generation more than current generation. The result is that we do more today to curb our actions because of the harm on the future generation. The weighting reveals our bias;
So what we are really talking about here is ensuring a transparent process that is grounded in reason when we are engaging in making environmental decisions. To help us understand the role of bias, we explore human behavior dynamics at the individual and group setting to develop insights into presumptions used in environmental policy analysis.
weighting current generations higher is a bias towards wellbeing today, while weighting future generations higher is a bias towards wellbeing in the future. Underlying the weighting are ethical questions and implications. Stating these biases (presumptions) is one key to ensuring the analysis is transparent.
As noted in the text, the type of property right being described is often linked to the kinds of incentives that arise in individual decision-making. This is particularly true in questions related to environmental policy and management; precisely what incentives arise can be impacted by the characteristics of the resources (ala Mancur Olsons The Logic of Collective Action and Elinor Ostroms work on Common Pool Resources). Most difficult environmental problems today tend to be the kinds that represent situations where the characteristics of the resources are highly divisible but non-excludable. Knowing this can be helpful in a few ways: First, we can link individual incentives to the kinds of property right characteristics represented in an environmental problem. Second, where a property right characteristic is creating an incentive to act counter to an environmental goal, and the property right characteristic is capable of being changed, then a possible policy direction can be identified.4 Third, common values may be identified that aid in limiting defectors from environmental goals (in the group setting). This is not about changing individual incentives, but rather about identifying the factors that allow for the expression of
For example, changing the excludability characteristic (moving from low to high excludability) may result in better stewardship outcomes (through privatization of the resource).
individual incentives leading to undesirable outcomes. Altering the factors (rules) can marginalize the individual incentive to cheat (free ride).5 By understanding the connection between property right characteristics and individual incentives, we move closer to comprehending a key element of environmental policy: getting people to agree to a policy direction whether voluntarily or through coercion. By altering property rights we can focus on a framework that achieves the policy goal regardless of the values and incentives driving individual behavior you dont change people, you change actions.
The example provided in the text discusses privatizing parts of the atmosphere by charging for each unit of carbon emitted into the atmosphere. By doing so the common resource (atmosphere) becomes excludable, and like a toll good the user must pay to pollute. The incentive to pollute (externalize the cost) does not change, but rather the rules providing an opportunity to exercise the incentive have changed.
First, consider the importance of compulsion in non-cooperative games like the Prisoners Dilemma. When information is not freely shared (no opportunity to negotiate between players), then we often find individual incentives will dominate (people will tend to express their personal value preferences and individual incentives without consideration of other people). However, this is not complete. Consider the visual example of learning from the text copied below. Even without the ability to directly communicate between players, the actual results of each game being played provide learning opportunities; the likely actions of ones opponent may be gleaned from previous interactions (iterations of the game). This is an example of reinforcement learning in action; a person can learn from past experiences and alter their behaviors in the future, even if this does not mean altering underlying value systems. Thus, reinforcement can be a powerful policy tool regardless of individual preferences.
Second, consider that compulsion, and thus the need for reinforcement learning, is less important in cooperative games like the Stag Hunt. Because both players have the opportunity to exchange information before selecting a strategy, there is the opportunity to achieve a superior strategy where the payoffs are highest for both players. This underlies the idea that sharing of information is a key component to an optimum expression of preference.6 If information can be shared
Note the difference in how information aids in learning between the Prisoners Dilemma (non-cooperative) and Stag Hunt (cooperative) games. In the Prisoners Dilemma, there is no voluntary sharing of information; the information is gleaned only through
prior to action being taken, then there is a greater likelihood that sharing leads to better (more efficient) policy outcomes. Third, the Standing Ovation Problem brings up the dynamic of group interactions and how the expression of preference can be altered in the group setting. What is important here is the role of peer pressure (compulsion) in altering the expressing of personal values; a person can often feel compelled to applaud by the actions of surrounding actors; what goes on around us can influence how we behave (even if it does not influence what we believe).
experience (past games) between the players. In the Stag Hunt, the information is learned voluntarily before a strategy is chosen. Thus, in the Stag Hunt parties can agree to a superior strategy early in the interaction (because of cooperation). When information is not voluntarily shared, as in the Prisoners Dilemma, the learning dynamics are time consuming and thus more costly.
Second, we can see how the structure of interactions between individuals and within group settings can impact value expression. Game theory helps us understand the dynamics that can occur in cooperative and non-cooperative settings. In addition, agent-based modeling allows us to see how dynamics might occur within group settings, particularly the factors that might influence the expression of individual preferences including when an individual might feel compelled to act in a way that differs from their personal value system.
This is a complicated arena (human behavioral dynamics) that is continually evolving; we are constantly learning new things about how humans believe and express their beliefs individually and within a larger social context. The final part of this chapter focuses on how different government settings can influence behavior dynamics. Ultimately policy acceptance on the group level (societal level) may come down to ensuring that, regardless of individual preference, the group as a whole understands the policy provides greater benefits than costs, and to the degree possible, creates a sense that the benefits will be distributed in such a way that individuals will receive those benefits in a manner that exceeds individual costs. Consider how this might work in something like a carbon tax; individuals will have to feel that whatever they are paying for the tax, they are individually receiving greater benefits from the reduced potential for climate change precisely how to get that message across would be a huge win for environmental policy.7 I hope you have enjoyed the materials presented in this course. More individual work on certain areas is undoubtedly required, but upon completion of these materials you have a truly solid foundation from which to understand the dynamics of environmental policy thank you! END OF SECTION.
One way to do this is to focus on secondary effects. If the carbon tax can be shown to limit the burning of coal, and the burning of coal can be shown to increase respiratory illnesses (due to increased air pollutants), then people may more easily identify with the secondary effects being highlighted in the policy initiative (prevent respiratory illnesses like environmental asthma) because they are more directly connected to immediate human health concerns (whereas climate change may be less connected).