By Rory Wilding
TriplePundit recently featured an excerpt from "A New Psychology for Sustainability Leadership" that discusses the psychology of sustainability from an executive perspective. But what about at the consumer level?
With some in the mainstream media predicting societal collapse by 2040, it’s clear the climate change problem is gaining mass awareness. Right now there is a golden opportunity for businesses to let people know what they could do on an individual level. Based on logic, the arguments are solid: Change our behavior today to preserve current living conditions for future generations.
So, what’s stopping us on an individual, consumer level? Well, if the study of behavioral economics has taught us anything, it is that people are far from rational. Nobel laureate and psychologist Daniel Khaneman regards climate change as the most challenging cognitive psychological phenomena possible.
Psychologists have found we have two systems we use for decision-making. System one is fast, instinctive and emotion-driven, based around mental shortcuts. These shortcuts are also often called mental biases because they allow us to act by a quick rule of thumb. System two is slower and more deliberative, involving greater mental effort.
These shortcuts are correct most of the time meaning we can survive in our environment. However occasionally we are led down the wrong path by using a system one for a system two decision.
So, how do mental biases lead us away from sustainable living?
The first obvious bias is analysis paralysis. Overanalyzing a situation means action is never taken -- paralyzing the outcome. With so many things we could do to tackle climate change, it’s hard to know what to do. Linked to analysis paralysis is ‘over choice.' Climate change touches so many aspects of daily living: transport, food, clothing, hobbies, even our choice of partner. As consumers, we are faced with ‘choice overload’ when considering a more sustainable lifestyle -- biasing us toward inaction.
The status-quo bias leads us to prefer to keep things as they are. Change is hard, and human action takes time. Why are we so resistant to change? For an informed third party, it is easy to tell someone else what they ‘should’ be doing – for someone wrapped up in their day-to-day life, just taking the time to think about switching involves mental effort or using system two. For most people, it’s easier to make a quick choice not to change.
Calculating the financial implications of change put up bigger barriers still. A classic example of this problem is illustrated by the following question:
A bat and a ball cost $110. The bat costs $100 more than the ball. How much does the ball cost?
If you answered $10 you fell victim to attribution substitution, a process by which we go off an intuitive calculation rather than taking the time to be accurate.
The answer is actually $5 because the bat costs $100 more than the ball, but the ball still costs something: $5 + $100 equals the price of the bat, or $105; $105 + $5 equals $110.
This is a simple example. Imagine you are a homeowner with kids and a job plus no experience of payback costs. It’s clear to see why, for some, sustainability is perceived as more hassle than help.
While sunk costs cannot be recovered, we still factor them into our decision-making process. For a homeowner who has ‘perfectly working’ equipment, money spent on sustainability may be looked at as a loss, with sunk costs reinforcing the status quo. Consumers may not easily understand that there could be a net positive after the up-front cost. We may also face a ‘knowledge-action gap’ as we know what we should be doing but fail to take action.
Next add in the Anchoring effect: We rely on the first piece of information presented (the anchor) when making decisions. Sustainable technologies typically cost more up-front with longer-term payback. Historically, we've had anchors set by cheaper, less efficient equipment -- making efficient technologies seem even more expensive than they really are.
Finally, hyperbolic discounting distorts the way we calculate delayed rewards. We apply a steeper discount to rewards further away in the future. This means the longer away the payback period, the less likely we are able to accurately calculate the benefit.
It is obvious that these barriers make climate change possibly the most challenging issue in consumer psychology. A respect for these cognitive barriers can lead to innovative ways of framing new products and services to help consumers understand the value of sustainability. Breaking down these barriers means those organizations that value people and planet will profit from longer-term informed thinking. In my next post, I'll look at what can be done to tackle some of the psychological barriers we have discussed.
Image credit: Pixabay
Rory is the commercial director of Which LED Light, the UKs leading independent LED light comparison service. Rory has a background in Psychology and is interested in the climate change challenge from a behaviour change perspective. Follow Rory on Twitter at @WhichLEDlight.