Values Trump Cash Incentives as Inducement to Environmental Action

My last article focused on Costa Rica’s highly successful forest protection and ecosystem restoration program. Its remarkable achievement is attributed to placing a monetary value on the services received from the natural world.

In recent years, there is increasing use of cash incentives in policies aimed at ending ecological degradation. Most research by behavioral economists, however, cautions against this approach or at least urges its use in combination with social and moral incentives. Michael Sandel, in his publication What Money Can’t Buy: The Moral Limits of Markets, demonstrates that markets aren’t neutral: They always touch, and frequently taint, the processes they are trying to influence. 

Merely mentioning market roles can push aside our intrinsic motivations. An online survey asked participants to think of themselves as one of four households sharing a well and facing a drought-induced water shortage. Half were described as “consumers,” the other half as “individuals.” Those referred to as consumers reported feeling less responsibility to take action and less trust that others would take action than did those labeled individuals. Simply thinking like a consumer triggers self-centered behavior and divides rather than unites groups facing a common challenge.