Using Economics to Fuel Responsible Energy Consumption Decisions

Citation:
38
ELR 10842
Issue
12
Author
W. Kip Viscusi

Examining individual consumption behavior is pertinent to both the current sources of greenhouse gas (GHG) emissions as well as policies designed to limit these emissions. A wide variety of private household decisions generate externalities that have environmental ramifications both now and in the future. Because household decisions may not be fully aligned with broader societal objectives, improving these decisions could foster society's environmental policy objectives. If, however, it were always as inexpensive to reduce pollution after the fact using the analog of end-of-pipe treatment, then there would be no need to alter consumption behavior, as it would be no more costly to address the harm after it has occurred.

This Article considers the determinants of individual consumption decisions and how these decisions might better account for environmental impacts. In addition to exploiting the quite direct forms of regulatory incentives to alter behavior, such as taxes and regulatory standards, policymakers should take advantage of the potential of informational remedies that can assist people in making more efficient choices for themselves and more responsible decisions for the environment. This Article considers as a case study ways in which current information provisions for household energy utilization might be improved. In exploring the potential role of more environmentally responsible consumption decisions, I do not mean to imply that such policies alone are sufficient to fully address all climate change problems. However, to the extent that substantial benefits can be generated at little cost, consumption-oriented efforts should be included in a broad mix of climate change initiatives.

W. Kip Viscusi is the University Distinguished Professor of Law, Economics, and Management at Vanderbilt University.
Article File