In an opt-in design, political preferences were paramount. But with a 'green default', political preferences no longer mattered. Stunningly, the default completely eliminated the effect of environmental preferences.
Daily life is increasingly accompanied by the equivalent of green defaults, replacing grayer ones.
Consider motion detectors that turn out the lights when people do not appear to be in the room. In this way, motion detectors create the equivalent of an 'off' default.
Or consider appliance and computer settings that turn the equipment off when it is not in use. If the default setting on office thermometers is turned down in winter, and up in summer, we should expect significant economic and environmental savings, at least if the default setting is not so uncomfortable that people will take steps to change it.
Both policy and technology are making green defaults of this kind readily available. For purposes of illustration, consider four domains in which choice architects may or may not select such defaults.
It works on paper
Human beings use a lot of paper, and paper requires use of a large number of trees. Suppose that a private or public institution wants both to save money and to protect the environment by reducing its use of paper. It could, among other things,
- educate people about the potential value of use reductions ('just the facts');
- attempt moral suasion by appealing to economic and environmental values;
- impose some kind of charge or fee for the use of paper;
- or impose ceilings on the total amount of paper used by relevant individuals or groups (with an inventive approach being a kind of cap-and-trade system).
But consider a much simpler intervention: Alter the institution's default printer setting from 'print on a single page' to 'print on front and back.' A number of years ago, Rutgers University adopted such a double-sided printing default. In the first three years of the new default, the result was to reduce paper consumption by well over 55 million sheets, which amounted to a 44% reduction, the equivalent of 4,650 trees.
An impressive experiment at a large Swedish university also found a substantial reduction, with a significant and immediate effect in the form of a 15% drop in paper consumption, with that effect staying stable over time.
It is evident that if private and public institutions decided in favor of a simple change of the default, they would have a large impact on paper usage. Many people use far more paper than they need only because of the 'single page' default; a change would produce significant savings at negligible costs in terms of convenience and changing reading habits.
At least in the face of weak preferences, the default has a large effect, even when switching costs are negligible. Notably, that large effect can be found even though strong efforts to encourage people to use doublesided printing have essentially no impact.
Also notably, the effect of the double-sided default has been found to be far larger than that of a 10% tax on paper products, which would produce a mere 2% reduction.
I began with a choice between utility suppliers. It is far too simple, of course, to suggest that the available possibilities fall in two dichotomous categories of 'green' and 'gray'. There are multiple options, and the environmental and economic consequences of diverse sources of energy require careful investigation; disputes are easy to find.
Recall that the very label 'green' can affect consumers, even for candy bars, whether or not the underlying good or service is healthy or protective of the environment. For present purposes, it is sufficient to stipulate that from the environmental point of view, some sources are preferable to others, and consumers might want to consider environmental factors when choosing energy, especially if they can save (or do not lose) money at the same time.
Many jurisdictions do offer some kind of choice. In some nations (including the United States), people are generally defaulted into a particular source, with the option to opt out.
Typically, the default is relatively gray (perhaps because some of the green options continue to be expensive). To use green energy, people have to seek out relevant information and choose it affirmatively. The deterrent effects of that requirement are large, even in circumstances in which people would give serious consideration to green options if presented with the choice unaccompanied by a default.
Not long ago, my own electricity provider sent me a note, inviting me to send in a form to change to green energy. The form was short and simple, and the idea of switching seemed to me attractive. I decided that I would focus on the issue and send in the form, within a day or two. But of course I lost the form.
What would be the effects of switching to a green default? The question has been examined through studying actual behavior and a series of laboratory experiments.
In Germany, many people say that they would use green energy if presented with a choice, but for a long period, few consumers actually opted for green. In almost all communities, the green usage rate was at one point under 1% (though it has significantly increased in recent years).
From 1% to 94% - proof positive that green defaults work
But even when the green usage rate was generally close to zero, two communities showed usage rates well above 90%. The reason is simple: They used green defaults.
The first such community is Schönau in the Black Forest, consisting of about 2,500 people and (notably) dominated by conservatives, with a weak Green Party (receiving only about 5% of ballots in the relevant time period).
In the aftermath of the Chernobyl disaster in the 1980s, a citizen referendum established an environmentally friendly energy supply, in which the Schönau Power Company became the incumbent utility and many of the Schönau citizens became owners of the cooperative. That company promotes solar energy and places a great deal of reliance on renewables.
Customers are allowed to opt out and to use other energy sources, but they have to find relevant information in order to identify alternatives. Almost no one opts out: In many years, the opt-out rate was only slightly above 0%.
The second natural experiment involves Energiedienst GmbH, which supplies energy to an area in southern Germany. In 1999, the company established three separate tariffs. The default was green, and it turned out to be 8% cheaper than the previous tariff. The second option was less green but cheaper (by an additional 8%), and the third was greener but more expensive (by an additional 23%). If customers did not respond, they would remain with the default.
About 94% of customers so remained, with 4.3% switching to the cheaper tariff, and the rest switching either to the greener alternative or to a different supplier.
These results testify to the extraordinary power of defaults. Recall that elsewhere in Germany, the use of green energy was at the time of the study less than 1%, even though many consumers said that they would be willing to pay a premium for it. But outside of the two areas just described, people were required affirmatively to select green energy, and overwhelmingly they did not.
'A green default triggers feelings of conscience'
It is fair to speculate that at least within a large range, the default rule determines the kind of energy that people use. A more recent and especially impressive study, based on a later time period, finds the same results. In a large randomized trial, again in Germany, setting the default to green energy increased use of somewhat more expensive green energy nearly tenfold.
In an opt-in design, political preferences greatly mattered, which is hardly surprising: being a member of the Green Party was a strong predictor of whether people would opt in. But with a green default, political preferences no longer mattered. Stunningly, the default completely eliminated the effect of environmental preferences.
With that finding, it would be possible to worry that the green default was affecting outcomes without people's conscious awareness, in a way that would raise troubling ethical questions. But follow-up experiments found that worry to be baseless. People were fully aware that they were relying on the green default, and they consciously decided not to opt out.
One reason, as we will see, is that a green default triggers feelings of conscience. Experiments and surveys. Experimental and survey results should be taken with many grains of salt, because they may not predict actual behavior, but they can be informative - and they also find a large effect from green defaults.
We also found that with a green energy default, people feel more guilty about not using green energy than they do with a gray default - and guilt is a good predictor of what people will do. Active choosing produced even higher green energy usage rates than green defaults, apparently because of reactance. Recall, however, that survey evidence might well find higher levels of opt-out than would be observed in reality.
We cannot know for sure, but my own prediction is that in most real-world settings, automatic enrollment would be far more effective than active choosing. If green is the goal, green defaults are probably best.
The book: The Ethics of Influence: Government in the Age of Behavioral Science is published by Cambridge University Press on September 8th, price £19.99.
Cass R. Sunstein is Robert Walmsley University Professor at Harvard University. From 2009 to 2012, he was Administrator of the White House Office of Information and Regulatory Affairs. He is the founder and director of the Program on Behavioral Economics and Public Policy at Harvard Law School. Sunstein is a contributing editor to 'The New Republic' and 'The American Prospect', and author of many articles and books, including the best-selling 'Nudge: Improving Decisions about Health, Wealth, and Happiness' (with Richard H. Thaler, 2008).
This article is an extract from Chapter 7 of The Ethics of Influence: 'Green by Default? Ethical Challenges for Environmental Protection' (pp. 162-167).