Friday, February 01, 2008

How much to drive behavior change...

The New York Times highlights a program in Ireland that drastically cut the use of plastic bags. What was the program? An incredibly hefty charge on plastic bags that are used to the amount of $0.33 per bag. That completely blows away any Redemption Value or deposit we have on cans and bottles today, and is an order of magnitude greater than the $0.03 you save when you bring an alternate bag.

In effect since 2002, within weeks plastic bag use dropped an incredible 94%, not a misprint. It also made carrying a plastic bag a social taboo. Receiving the kind of ostracizing reserved for smokers. This makes me wonder about the nature of incentives and the power of negative incentives to shape behavior. I wonder what would happen if Ireland did the same for paper cups? Tax proceeds also went directly to environmental causes which I think improved it's acceptance.

Part of the Irish success story is a result in the lack of interests, with no domestic producers of plastic bags there was no industrial opposition to the law. The Irish law was also clear to make sure that stores could not pay for the bags on behalf of the customer and offset the costs elsewhere. Even if the stores switched to paper, there would be a charge, so it extended to the notion of taxing consumables in general. Stores who were originally opposed even were converted:

Today, Ireland’s retailers are great promoters of taxing the bags. “I spent many months arguing against this tax with the minister; I thought customers wouldn’t accept it,” said Senator Feargal Quinn, founder of the Superquinn chain. “But I have become a big, big enthusiast.”

The question that comes out of this is how do you change negligible behavior. Plastic bags are a norm and people are use to them. The argument is that people won't change because of the convenience, but in the case of Ireland they did.

Do positive incentives or negative disincentives work better in shaping environmental behavior? An effort of mine is facing this exact question.


At 8:20 PM , Blogger arduous said...

Great question!! I think it depends on how big the positive incentive is versus how big the negative incentive is. I think a small negative incentive (.33 is not that much) can work wonders. By contrast, a small positive incentive, say 5 cents per reusable bag brought, does much less. I think that's because while people might not care that much about EARNING a nickel, they do care about PAYING a few cents.

By contrast, a large positive incentive can work wonders too. For instance, Trader Joes in LA offers a raffle ticket to anyone who comes in with a reusable bag. The raffle is for a $25 TJs gift certificate. Because the possible positive outcome is fairly large, a lot of people participate.


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