The Bad News About Nudges: They Might Be Backfiring

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Yves here. A problem with “nudges,” as in manipulation that makes clever use of cognitive biases (like putting fruit ahead of cake in a school cafeteria line…which ought to work all of once in getting kids to chose healthier desserts but reportedly has a higher success rate than that) is that, in the climate change context, the measures that will have a big impact require collective action, not individual action.

But this study finding is even worse…..that successful nudges reduce support for broader environmental policies.

By Kate Yoder. Originally published at Grist

Nudges, those tweaks that use behavioral science to help people make smarter decisions, are popular all around the world. If you get a bill comparing your electricity use to your neighbors’, you’re more likely to turn off that kitchen light or unplug your TV. And if your employer automatically enrolls you in a retirement savings plan, you might save more money for retirement. It’s using a little change to have a big impact on your life.

These nudges seem pretty great on the surface. But some may have unintended consequences when it comes to policymaking, according to a new study in Nature Climate Change. Requiring large utilities to automatically sign customers up for environmentally-friendly energy could, in a twist of fate, erode support for substantive policies like a carbon tax.

This raises a question economists have been grappling with for years. Do people see nudges as substitutes for larger, more effective policies? If so, they could backfire, undermining support for serious action.

Over the course of six experiments in the last couple of years, researchers at Carnegie Mellon tried to find an answer. They asked participants to imagine themselves as “policymakers” (like members of Congress; one experiment was conducted on graduates of a public policy school). When a carbon tax was the only option presented, 70 percent of participants were in favor of it. But when they were also given the option of approving the clean-energy nudge, boom, support for the tax dropped to 55 percent.

Similarly, the researchers found participants liked the idea of expanding withholdings for Social Security in order to increase benefits. But when they were given the option of requiring large companies to sign their workers up for a retirement savings plan by default, support for the Social Security idea fell.

Why’s that? One explanation is that people tend to overestimate the power of nudges. Automatic enrollment in a greener electricity plan generally has “a pretty small effect” on carbon emissions, said David Hagmann, an author of the study and a postdoc at Harvard.

The idea of nudges was popularized by Richard Thaler, a Nobel Prize–winning behavioral economist, and Cass Sunstein, a legal expert who served in the Obama administration, in the 2008 book Nudge. “We are all too aware that for environmental problems, gentle nudges may appear ridiculously inadequate — a bit like an effort to capture a lion with a mousetrap,” they wrote in the chapter “Saving the Planet.”

Nudges are supposed to be a complement to beefier policies, not a replacement, but the Carnegie Mellon study suggests they run the risk of being seen as a low-lift substitute.

Not that a carbon tax has made a dent in U.S. emissions so far, either. Because, you know, they don’t exist in the U.S (though there are cap-and-trade programs in California and the Northeast). Carbon prices do exist elsewhere, like in Portugal, Sweden, and the Canadian province of British Columbia. All the state-level attempts to pass such a policy have failed so far, due to the usual suspects like political division and industry opposition. With climate denial’s grip on the Republican Party, it’s uncertain whether any state could manage to pass a carbon tax anytime soon, never mind Congress. And the carbon prices that already exist around the world are considered too low to be very effective on their own.

That said, scientists at the U.N.’s Intergovernmental Panel for Climate Change say putting a price on carbon is “necessary,” to curb emissions, along with other strong policies.

It makes sense that nudges are politically popular by comparison: Implementing them comes cheap. Across multiple policy areas, they’ve been shown to outshine conventional approaches like subsidies or taxes measured by impact per dollar spent.

And they do have the potential to lower our carbon footprints. In Nudge, Thaler and Cass explain how an object called the Ambient Orb — a small ball that glows red when your household is using a lot of energy, and glows green when energy use is low — dramatically lowered energy use in one experiment in California. “In a period of weeks, users of the Orb reduced their use of energy, in peak periods, by 40 percent,” they write.

But it’s concerning that simply pondering the idea of a green-energy nudge could reduce support for something meatier. Luckily, there’s a remedy: education! In the study, support for a carbon tax stayed high when the researchers told participants that revenue from the carbon tax would go toward reducing other taxes. Telling people that the nudge was relatively ineffective also kept support for a carbon tax from dropping, Hagmann said. (And it didn’t hurt support for using nudges.)

Still, the new research raises other questions. Could small environmental policy wins like banning plastic straws or plastic bags erode support for enacting more far-reaching legislation?

Sorting out recycling and compost certainly makes some people feel better, if also self-righteous (“That obviously goes in the brown bin!”), but apparently a bunch of the stuff often thrown into the recycling bin heads straight to the dump. The larger problem of mass consumption and waste remains.

Think of a gentle nudge like ibuprofen. It may alleviate your headache, and that’s great! But it’s no cure for chronic migraines that come from prolonged screen time.

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  1. albrt

    Hoocoodanode that Clintonian-Obamaian-Sunsteinian fake policies erode support for real policies?

    These folks say more education sustains the support for the real policies, but that probably does not work as well when people realize that the authority figures are self-serving crooks and everything is just bullshit and there’s no point in supporting anything.

  2. H. Alexander Ivey

    Since when is manipulating people, especially those over 4 years of age, ever considered a “good idea”? Oh yeah, after neoliberalism. Thanks.

  3. Sub-Boreal

    Who was it that said that small reforms are the greatest enemy of large reforms?

  4. cuibono

    my favorite nudge anecdote: my 5 year old was not going to brush his teeth at night without repeated prompting. I made him a deal. earn a gold star for every time he did so on his own. Fill up the book with stars and he would earn a trip to a game center he so badly wanted to go to. Needless to say he did so. We went. The next morning he said to me at the breakfast table: ” Dad, I was thinking about this. if you had given me a gold star for doing some bad stuff I would have gotten there much faster.”

      1. Antoine LeBear

        That’s because gold stars are extrinsic motivators and they work not so well in the long run and have all sort of nasty side-effects (kids will ask for them for every task after realizing they could get « paid » to do it, for example). You need intrinsic motivation, but it’s hard to induce in some situations (like boring tasks)

    1. H. Alexander Ivey

      Ha! Proof of my claim above that over 4 year olds understand and resist the “nudge”.

      Thanks cuibono.

  5. The Rev Kev

    Reading this a second time, the article states that nudges run the risk of being seen as a low-lift substitute for real action, right? Fair enough. So, could you say that the mirror-image of a nudge on a person would be virtue-signalling on their part then?

    1. willf

      Not to mention that some of the examples given of “nudges” are not comparative. Here:

      Similarly, the researchers found participants liked the idea of expanding withholdings for Social Security in order to increase benefits. But when they were given the option of requiring large companies to sign their workers up for a retirement savings plan by default, support for the Social Security idea fell.

      Wow, while participants liked the idea of expanding SocSec withholdings, they were less enthusiastic about the idea that their employees could sign them up for a retirement plan without asking first.

      Gosh, since those two options are almost identical, what could possibly account for the difference in support?

  6. Clive

    Jimmy Carter sat in the White House wearing a cardigan trying to nudge the country into setting their thermostats to 60 degrees in winter (and, I think, later, 80 degrees in summer).

    The last time I was there, this had no discernible lasting impact on a population (businesses, individuals, society as a whole) which is determined to reserve the right to sauté its population in the colder months and freeze them penguin-like in the warmer ones.

    As a general piece of advice to authority figures attempting to influence behaviour, it does help if you are consistent in the efforts to exercise your position of authority with your actions — which also need to be trustworthy. Otherwise you’ll end up just being ignored.

    1. TimH

      The cardigan approach is wonderfully middle class. The poor don’t have A/C and can’t afford the heating in winter.

      I prefer the UK approach, contemporary to Jimmy Carter (and similarly middle class) to give discounts and fibreglass insulation for celings/roofs. Didn’t apply to those renting of course…

      1. Joe Well

        In my grandmother’s old housing project, people used to leave the windows open in winter because they didn’t have thermostats and the heat was kept so high. I doubt that’s still the case, but I bet a lot of people have heat included in the rent.

    2. a different chris

      >which is determined to reserve the right to sauté its population in the colder months and freeze them penguin-like in the warmer ones

      I am never so cold as when I visit Florida and have to be inside for any length of time. WTF.

    3. beth

      Actually Clive, I did move the thermostat to 60 degrees the next winter and lots of people in Ohio did the same. So many people did that the utility company said that we didn’t cover their fixed costs that year so they abandoned the idea.

    4. Jo

      Carter urged people to set their thermostats to 68, not 60, in winter. Before that, it had been common for most people to keep their house at 72, so it was not a huge difference in temp and a sweater would have sufficed.

      1. Joe Well

        IIRC, 68 is still the default “indoor” temperature, so President Carter may have had a lasting impact?

    5. Joe Well

      Yes, this infuriates me about the US and I’m American. It seems to be regionally influenced. In Boston, people don’t expect to wear sweaters in summer but do expect to be kept toasted in winter.

      Why haven’t we just moved toward heated/cooled blankets and sweaters, or some other way of heating and cooling the actual individuals rather than all the space in a building? Also, I thought I’d heard about a system for shooting heat and cold air at individuals directly as they moved about?

    6. Yves Smith Post author

      Many if not most office buildings in Manhattan DID set their summer temps to 77. Many photos at the time of fancy firms abandoning the requirement to wear a jacket indoors.

  7. kk

    Evgeny Morozov is a great writer to read about these issues, briefly: the utopianism of the initiatives promoted by the digital companies as political solutions. In fact they are not even utopian, they are reactionary (but wrapped up as a fashionable “disruptive app”).

    I cannot but highly recommend his books, you can also see his articles in the MSM and on Twitter.

  8. vlade

    Nudges tend to work, but they work like a dripping water erodes rock – veeery slowly. We don’t have the time.

    I’d rephrase the nudge problem a bit. If you put in the nudges AND tell people about them (most of the nudges we get are skillfully placed otherwise, so we don’t notice them unless looked for), they will get the warm and fuzzy feeling doing their bit for the environment. And stop there.

    We need to get things done AND get the people to do their bit (to have a buy in, to see that what goes against it as trying to devalue and destroy their effort. There’s little that gets people behind a cause as much as seeing someone else devalue and destroy the work they put in). And that, especially with so little time, takes way more than nudges.

  9. PlutoniumKun

    Nudges work – business knows this. Its why fast fashion shops have clothes recycling bins and organic cotton lines and McDonalds sells salads (apparently, people are more likely to ‘go large’ if they see a salad). Its a pity subtle nudges have become unpopular because of the people who promote them, but that doesn’t mean that they shouldn’t be used – we are surrounded with constant ‘nudges’ in the form of adverts and displays and at the very least, they should be countered by more positive ones.

    But as the article points out, they have to be used carefully and intelligently, and they are no substitute for strong action.

  10. Abi

    Interesting. Takes me back to my policy making class at King’s College London. British people love and believe in nudges. I think they work. But as Ken said, these are complimentary tactics to achieving a broader goal

  11. Susan the other`

    China has a long list of achievements. Like fleets of electric busses. Multiple hydroelectric projects. Water conservation. They’ve gone into southern Siberia with a land grant from the Russian government to farm. Big time farming. They have done all this and reduced extreme poverty at the same time. Most Chinese respond favorably to questionnaires about their government. Because it actually does stuff. The Belt-and-Road could be a mistake because it encourages turbo manufacturing and trade in a time when we should all be learning how to “shelter in place” as they say. So their mistakes might be as big as their successes. I’m waiting to hear about the big one: how China is going to manage climate change politically. I can see how we are doing it – we’re nudging. Nudge nudge wink wink. They put James Hansen in front of the camera in a 15 second clip to tell us solemnly, “It’s going to get much worse.” So why is there so little apparent coordination? If they want to nudge us into figuring out how to survive on our own there should be some guidelines, like Do not build a cement bunker along the Missouri River. I think it’s going to turn into chaos. If this is their best shot they should at least be building local shelters for all the people who will be soaking wet, freezing, starving and pissed off beyond belief.

    1. vlade

      I’ll put just one thing here. The Chinese also went to Siberia to do some massive unconstrained logging, that’s removing so much forest that it’s actually visible from space.

      And this is not a “western” complaint, many Siberians say that, it was even raised in Duma (Russian parliament). Even Putin called Russian forestry industry “a very corrupt industry” (and did zilch).

      Not that he official one is much better. IIRC, the cost of permit to log a hectare of forest in Siberia is something like $2. Less than a cup of coffee.

  12. Anarcissie

    Since nudges are fundamentally an insult to the intelligencje, dignity, and autonomy of their targets,
    even when they are superficially imperceptible, my guess is that a homeostasis of behavior
    will eventually vitiate their effect. People will account for them and offset them. This will
    especially be the case when the class war has become obvious, because of the differences
    of interest between the manipulating and the manipulated classes.

  13. Frank Little

    I see the failure of these nudging policies as a symptom of the larger delusion in the US that we need to simply change the source of our energy rather than use less of it. Sadly when you try to bring up these kinds of constraints people assume you are advocating some kind of pastoral “return to nature,” when really all it means is trying to talk seriously about what we need (access to medical care, clean water and air, healthy food) and what we don’t (new TVs or cars every few years, fast fashion, same day delivery) .

    The US economy, like that of many others, was built around fossil fuels, from the way our infrastructure was designed to the nature of our geopolitical alliances and financial system. Trying to nudge this system into working within ecological limits is like trying to tread water on a bicycle.

  14. JEHR

    I will be very interested in seeing how the “big nudge” works as climate change really gets going. All the people will be paying attention (and acting), I bet.

  15. Synoia

    zIf I’m the tecipient of many tepeated small nudges, when l notice the nudges, my reaction is quite large.

  16. EGrise

    This nudge stuff from the Obama administration always struck me as a case of “literally doing the least we can do” while still getting credit for doing something.

    1. polecat

      It’s too bad Barry wasn’t nudged enough to jail, for all enernity, some high-profile banksters …
      But then there’s hope that, if certain political skull-duggeries come to light, Barry of O gets the opportunity to share a jail cell with some nice, protective Bubba !

  17. political economist

    Nudges work best in cases where the decision is profound, the nudge is towards one that seems reasonable or moral, and where it is unlikely to be reassessed without another nudge. The best example is being nudged when applying for a driver’s license into agreeing to donate one’s organs upon one’s death. If this were made a law with an option to sign for an exclusion, it might not work as well as the nudge does. People might not want the state to automatically tell you what to do with your body but still be fine with a simple opt-out when receiving the license.

  18. Charger01

    The premise of the article, automatically signing up a customer for more expense, greener energy caused them to resent the manipulation? That sounds pretty linear to me. People do not want to pay more for their basic needs, full stop.

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