Green Defaults: Information Presentation and Pro-environmental Behaviour

Abstract There is inconsistency in many people's choice of electricity. When asked, they say they prefer a ‘green’ (i.e., environmentally friendly) source for this energy. Yet, although green electricity is available in many markets, people do not generally buy it. Why not? Motivated by behavioral decision research, the chapter argues that the format of information presentation drastically affects the choice of electricity. Specifically, this chapter hypothesizes that people use the kind of electricity that is offered to them as the default. The chapter presents two natural studies and two experiments in the laboratory that support this hypothesis. In the two real-world situations, there was a green default, and most people used it. In the first laboratory experiment, more participants chose the green utility when it was the default than when ‘gray’ electricity was the default. In the second laboratory experiment, participants asked for more money to give up green electricity than they were willing to pay for it. The chapter argues that changing defaults can be used to promote pro-environmental behavior. Potential policymaking applications of this work are discussed.