The 20 million ballots cast at the recent Australian Federal election have made one thing abundantly clear: Australians want a government that takes strong climate action.
The remarkable success of the teal independents focused on a climate action agenda and the unexpected swing towards the Greens in Queensland has given the incoming Labor government a clear mandate to go beyond their emissions reduction target.
Labor ran on its Powering Australia plan, which aims to reduce national greenhouse gas emissions by 43% by 2030, based on 2005 levels, with net zero to be reached by 2050 through industry focused initiatives. This might not be ambitious enough.
According to Murdoch University research, it appears to be consistent with capping global warming at 2℃, which is not quite in line with the Paris Agreement goal for “well below” 2℃ warming.
Furthermore, the Intergovernmental Panel on Climate Change (IPCC) Climate Change 2022: Mitigation of Climate Change report, indicated that greenhouse gas emissions must peak no later than 2025 for warming of just 1.5℃ to be possible.
The international and Australian community is likely to push the Government to go even further than their pre-election plan. If they hold back, the Senate Crossbench are sure to drive a hard bargain on climate in return for supporting government bills.
A more ambitious plan is needed – one that calls on the everyday Australian to play their part. Indeed, the IPCC report suggested that a 40-70 per cent reduction of carbon emission could be achieved by individuals making greener choices in day-to-day life.
This is where behavioural economics comes in. Behavioural economics draws from a deeper understanding of human behaviour to help design policy, programs, and communications, that maximise behaviour change in areas where monetary incentives like subsidies and taxes cannot.
Sometimes we are motivated to do things because doing it is easy, or fun, or even cool.
Think about how fewer electric cars would be on the road today if Tesla never managed to establish its electric vehicles as aspirational products – without that social incentive, fewer people would be willing to spend the money on a new electric car.
Some governments have already caught on to how human behaviour can be harnessed to help the climate. These “nudge” policies encourage people to make environmentally friendly choices without removing their freedom to choose or financially coercing them.
One way this can be done is through considering our default bias. There is a wealth of research showing that people trend towards picking the default option when presented with a list of choices. In 2015 German researchers partnered with an electricity company to examine how 40,000 households chose to set up electricity contracts and select the sustainability mix of their tariff.
Half the households had the choice to opt-in to a 100 per cent renewable (and slightly more expensive) tariff, while half were presented with a contract that had automatically selected the renewable tariff, with an option to opt out.
The results? Just 7 per cent of the opt-in households selected the renewable option – but 70 per cent of the other group chose to remain with the renewable option.
Another example includes “gamifying” environmentally friendly actions. Reducing the price of electric vehicles is important, but it could be even more attractive if EV drivers could share how much carbon they’ve saved from the switch on social media.
The Australian Government Behavioural Economics Team that has produced research providing insights into how something as simple as a redesigned electricity bill can encourage consumers to engage with different retailers and find a better deal.
This has only scratched the surface on the power of behavioural economics to change behaviour for a more sustainable future.
Amid the current energy and natural resources crisis, the government needs to move now to support behaviour change at the grassroots level and move fast to build on the momentum that this election has created for climate action. Deliberate focus on behaviour change through behavioural economics solutions, alongside industry based solutions is essential if we are to effectively tackle climate challenges.