what climate policymakers can learn from development economists

I've been involved in discussions about ways to reduce greenhouse gas emissions for 11 years now. I focus on the transport sector - one of the hardest for governments to get a handle on because the people controlling how much gets emitted are not big corporations. They are the billions of individuals - 6.6 of them or so according to the US Census World POPClock - whose travel choices collectively determine the impact of the sector on the global environment.

Proposed strategies to reduce greenhouse gas emissions from the sector focus almost entirely on technological advances in vehicles, fuels, and batteries - particularly in the US. This is true despite the fact that existing vehicle technologies coupled with regular old gasoline could dramatically reduce these emissions in the US because so many of the vehicles on our roads guzzle fuel and belch out tons (literally) of carbon. One thing that would dramatically change our carbon emissions levels in the US is for people to make different choices when they buy cars (and that includes choosing to buy cars rather than trucks or UAVs - Urban Assault Vehicles). Many other behavior-based strategies exist as well, but listing them isn't the point of this post, so I won't.

To the extent that policy wonks and academics do talk about behavior and transport carbon emissions, they tend to focus on financial incentives such as taxes. Which they quickly dismiss as politically unrealistic, and we're back to the technology strategies. But I think that many people, given the right information and options, will make climate-friendly choices on their own. I'm not a psychologist, but it seems to me that this is basic human nature.

An interesting story from a couple of development economists illustrates this point. Esther Duflo, a preeminent young economist from MIT, and Rema Hanna of NYU were recently studying education in a remote region of India. Because of its remoteness, primary schools in this region are of the one-room-schoolhouse variety. One of the prerequisites for learning in a school setting is that both the teacher and the students need to be at school at the same time. This was a problem in this region, since in a one-room-schoolhouse there is no teacher oversight and both teachers and students often have responsibilities that compete with showing up at school. So even though both teachers and students would turn up at the schoolhouse on most days, there was no way to coordinate their attendance and it ended up that the average number of days of instruction - and therefore learning - for students was severely impacted.

Duflo and Hanna, along with a local organization, did an experiment in which they introduced an oversight scheme for teacher attendance (using cameras with time and date stamps), and paid them by the day that they showed up at school. Under the old scheme, teacher pay was not linked to attendance - teachers received a set monthly salary whether they actually showed up at school or not. To give the teachers a cushion in case of illness, under the new pay-by-the-day scheme the teachers were paid for 10 days of attendance even if they did not show up at all for the month.

Under the set monthly salary scheme, teachers actually showed up about 60 percent of the time. Under the pay-by-the-day scheme, teachers showed up about 80 percent of the time. Good. But there was one perverse outcome (and it is not in Duflo and Hanna's working paper on the topic, but Duflo explained this outcome at a seminar I attended last fall). Under the pay-by-the-day scheme, 10 percent of teacher-months were complete no-shows. These teachers were presumably in a situation where they were ill or had other responsibilities for enough of the month that showing up at school was no longer going to increase their earnings, so they didn't teach. They were acting as economic theory predicts - in their own rational, financial self-interest.

Here comes the interesting part. Under the old scheme, there were no recorded teacher-months of complete absence. None. I do not think these teachers came to school because they were afraid of losing their jobs if they were absent too much of the time. I think they came to school in spite of the lack of oversight because they valued education and wanted to contribute to their communities by teaching.

This says to me that people will at least make an effort to do the right thing when entrusted to do it on their own. It is simple human nature. But when they are coerced into doing what someone else has decided is the right thing (through some financial incentive program such as the Indian teachers faced - or a carbon tax!), then they no longer take personal responsibility. I'm certainly not against a carbon tax, but I do think Duflo and Hanna's experiment has a message for policymakers. Or perhaps a double message. Part I: Even if you can't get a financial incentive to become law, people just might do what is in the global interest if they simply know what to do and are clear on why they are doing it. Part II: If you can create a financial incentive, it is vitally important to set that incentive at the right level because people will assume that complying with the law is equal to doing their part (and they are unlikely to do anything extra).

So why aren't there more people asking for serious public education and marketing campaigns on this issue? What I'm suggesting would be on the same scale as car and truck ads - virtually ubiquitous, that is. The Ad Council is great and all, but can't we (and shouldn't we) do more?