Serving Both Humans and Environment

Disclaimers: The views expressed herein are those of the author and do not necessarily reflect the views of any parties cited here.

As we are about to commemorate Indonesia’s 75th Independence Day tomorrow, amid the Corona Virus pandemic lest we forget that we carry huge responsibility to the environment and the future.

As a mother of one, I could only worry about what will happen to my daughter and her generations in the coming years, say 10-20 years from now, if we as adults only do minimum actions to curb global warming. Indonesia is an archipelago nation that sits beautifully on the equator. We are still considered as a developing nation but truth be told, the potentials of this nation are enormous. But only and only if this archipelago is not heavily impacted by climate disaster in the (near) future. One of pressing issues for developing countries such as Indonesia is on how to balance economic growth and environmental sustainability.

As a consumer researcher, I observe people’s behavior mostly in business context, e.g. how to understand their pain points towards specific products and/or services and how brands/companies could proactively move to cater consumers’ needs. Recently, I have read and got some grasp of findings about human behavior, thanks to the ever-growing behavioral knowledge domain. So, I think I’d like to propose some ideas in the intersection of human behavior and environment as per what I have understand.

Up Close and Relevant

Climate change is a long-term issue, at least for now. We are wired to “quick-fix” - fixing something that seems more urgent because it is already in front of us. Economic actors (government, companies, and the general public) consist of individuals. Individuals are more “reactive” when it comes to short-term impact rather than long-term.

Theory of Hyperbolic Discounting says that the value of future outcomes is discounted very steeply very close in time to the outcome, but more gently further away (Soman, Dilip, Jing Xu and Amar Cheema (2010), “Decision Points: A Theory Emerges,” Rotman Magazine, Winter 2010, pp.64-68.).

To help the general public and companies understand the urgency of climate change, one of the ways is to change the way the institutions (governments, NGOs, and other institutions within the climate change domain) communicate. The communication somehow needs to emphasize short-term impact of climate change and try to make it as relevant to daily life as possible.

For example: there are currently xx tonnes of carbon dioxide produced by each individual each day in Indonesia. Xx tonnes of carbon dioxide equals the size of yy standard public school classrooms in Indonesia’s big cities. Imagine that, and try to multiply it by 265 million times (Indonesia’s populations). If we keep mounting those CO2 productions and not trying to cut it, in the next year we will likely experience a more unpredictable climate: higher temperature by aa% and heavier rains which will be directly linked to the disturbance in crop production. If the crop production cycle is disturbed so does our food stock on the table. So what we need to do is ___ (state your proposed actions).

Compare with: there are currently xx tonnes of carbon dioxide produced by each individual each day in Indonesia. Xx tonnes of carbon dioxide equals the size of yy standard public school classrooms in Indonesia’s big cities. Imagine that in 2050, the temperature will rise to xx degrees in most parts of the world.

1. 2050 is still 30 years from now, next year is just another one year. You want immediate action? Put urgency to it.
2. You want people to notice? Bring messages that are relevant and close to them.
3. You want those who read to act on it? Give ideas on what contributions they can make.

Default and Decision Points

There are so many things that the government and policy makers can do to “nudge” people's behavior using default and decision points principles. Default is a pre-selected option. For instance when you buy a laptop and install the software, there are always default settings. Default settings make decision making easier for people. Laptop users off course can still change the settings, but if they want to change it, there will be a “transaction cost”: they need at least the knowledge on how and the time to modify the settings.

Take an air conditioner (AC) for example. When producers innovate new type of AC that provide default settings that the AC will be turned off within 3 hours after users turn it on, the scenario would likely be like this:

1. Users bear “transaction cost” to modify it - producers can heightened the game by making the barriers harder - of course producers need to state up front that the default settings are there to help users optimize electricity costs to maintain “we do it for your own good” mindset
2. Users pause and think twice before they turn the AC on again (do I really need to turn it on again? Now temperature’s already fine) → implementing decision points principle

Okay, that is from the user's side.

What about from the producers' side? What makes factories want to produce such new type of AC?

What about if we give them incentives?

Incentives are a great way to change current situation to new expected outcomes. For example, AC products that carry default turn-off feature would get tax reductions for every unit sold. So government can manage to ensure that:

1. Producers are more motivated to sell ACs with default turn-off feature - the tax reductions can be used by producers so they could get more profit, or to lower the price to make the product more competitive, and
2. For every AC units sold, government could expect less energy usage compared to ACs that do not have the default turn-off feature

Those above are my two-cents. I’m pretty new in this area. But, I think environment and human behavior are two inseparable things. Policy makers need to understand people’s decision making process to formulate more effective policies. Yes, those above are still very broad concepts and I am sure the devil is in the details.

If there are any policy makers who read this thought piece and find it useful, it’s a relief for me because it heightens the chance that behavior knowledge will be more considered when creating policies.

To close this, I do genuinely hope that Indonesia will thrive and achieve its twin goals: safeguarding the environment and promoting nations’ prosperity.

Selamat Hari Kemerdekaan Indonesia yang ke-75!