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I N C LU S I V E G R E E N G R O W T H: T H E PAT H WAY TO S U S TA I N A B L E D E V E LO PM E N T

BOX 2.4

(continued)

A new partnership—Wealth Accounting and Valuing Ecosystem Services (WAVES)—is expanding efforts to account for ecological services. Botswana, a WAVES partner country, has defined one of its overarching objectives as to continue to grow while diversifying away from diamonds (which currently account for about 35 percent of national income) and eradicating poverty. Several natural resource– based sectors are being tapped to play a lead role in this development strategy, including nature-based tourism, mining (especially coal for export), and irrigated agriculture. Water plays a critical role in Botswana’s development, given its scarcity; the increasing reliance on shared, international water resources; and the water-intensive nature of sectors identified for

economic growth and diversification. A key component of WAVES in Botswana will be the establishment of water accounts—physical supply and use accounts as well as monetary accounts (for supply costs, tariffs paid, and the value of water in different uses). Water accounts will enable Botswana to answer the following questions: Is there enough water in the right places to support the diversification strategy? What are the economic tradeoffs among competing users? How can incentives for water effi ciency be created? In the wake of the recent privatization of water under full cost recovery management, what will happen to poor households’ access to water resources? The answers to these questions are critical for helping policy makers chart the best path forward.

Avoiding fear mongering. Given cognitive myopia and people’s tendency to weigh emotion-filled consequences more heavily than abstract consequences, policy makers may be tempted to scare people into adopting environment-friendly behavior. Using “catastrophism” to make people change their behavior is ineffective, however, for two reasons. First, fear is only briefly effective. Once people get used to the problem, they revert back to their initial behavior (Weber 1997). For example, farmers informed about weather risks have a tendency to implement one mitigating measure (such as buying insurance), after which they consider their vulnerability problem solved, without considering how additional action may help. Second, people have only a limited ability to worry; an increase in worry about one hazard decreases worry about other hazards (Weber 1997, 2006). This means that a policy based on fear leads to competition among hazards, and success in one area (for example, climate change) comes at the cost of failure in others (for example, water pollution). Greening default options. An important behavioral bias that environmental policy makers can use to their advantage is the tendency of people to stick with the default option (box 2.5). In European countries,

where organ donation is the default option, more than 85 percent of people are organ donors. In contrast, in neighboring countries where people must designate themselves as organ donors, less than 30 percent of people do so (Johnson and Goldstein 2003). In the United States, automatically enrolling employees in saving programs and requiring them to opt out if they preferred not to participate increased participation from 37 percent (under the opt-in design) to 86 percent (Madrian and Shea 2001). Using nudging. In recent years, behavioral economists and the behavior change community overall have stepped up their interest in the potential role of nudges to influence behaviors. This approach advocates tweaking “choice architectures” to nudge people to make better decisions about their health, the environment, or other desirable outcomes without restricting their freedom of choice (Thaler and Sunstein 2009). To count as a nudge, the intervention must be easy, inexpensive, and voluntary. Nudges are increasingly being used to stimulate green behaviors; studies show promising results. For example, an electrical outlet (designed by Muhyeon Kim) that displays how much power it is using makes people more conscious of their energy use (figure 2.1). The Danish Nudging

Inclusive Green Growth  

As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that may or may not b...

Inclusive Green Growth  

As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that may or may not b...