Escaping the economist's straightjacket: Overcoming the free-rider mentality which prevents climate change from being effectively addressed

Abstract

Economists' ability to propose radical solutions to the problem of climate change is severely limited by one of the assumption they normally make about human nature, namely that it is fundamentally selfish and that this defining characteristic cannot be changed. An important consequence of this characteristic is known as free-riding, which occurs when people do not bother to take eco-friendly actions as these are costly to them, preferring to wait for others to take such actions and enjoy the resultant benefits. The problem is that, if all behave in this way, social paralysis may easily occur and climate change is likely to remain unaddressed, or to be addressed only superficially. Using a simplified version of George (2001)'s model of first and second order preferences, this paper considers ways of motivating people at a deeper (second order) level to take actions (at the first order level) that are eco-friendly. These include reducing market pressure/advertizing, promoting contact with nature and relying more on spirituality and mindfulness.