The DomPost carries the story that the government is investigating a plan to charge supermarket shoppers for every plastic bag they buy:
Based on a “polluter pays” scheme, the initiative would push grocery shoppers to reduce the one-billion plastic bags used each year.
But rather than funding environmental research or sustainability schemes, the cash would help boost supermarket profits.
Environment Minister Nick Smith said yesterday that New Zealanders were over-using plastic shopping bags, and officials were considering whether to legislate bag charges.
“We are a country of just four million people, we use over a billion bags a year, and to me that’s excessive,” Dr Smith said.
He had asked the Environment Ministry to investigate a “polluter pays” scheme that would see charges of about 5c introduced for each plastic shopping bag.
I’m delighted to hear this. One of the things that drove me crazy about Labour was their gut-level Green Party style impulse to ban everything they didn’t like. I think you get a lot further by incentivising peoples actions than you do by sanctioning and punishing them.
If Labour had placed a levy on incandescent bulbs, making them as expensive as compact fluorescent lights then people who needed to buy the old bulbs would have been able to, most consumers would have switched to the energy efficient ones and the environment would be a lot better off, since National repealed the ban on incandescent bulbs as soon as they got into office. (Due to Labour’s ham-fisted botching of this issue, and National’s moronic anti-Nanny state populism it’s going to be almost impossible to have a rational debate around light bulbs and energy efficiency for at least another six years).
Moving along, there’s an emerging body of economic theory around this issue, nicely articulated in a book called Nudge, written by University of Chicago economists Richard Thaler and Cass Sunstein. Since I haven’t actually finished Nudge yet – having put it down half-way through to read a Steig Larson thriller – I won’t try and sum it up myself, instead I’ll quote Freakonomics author Steven Levitt:
The main point of the book (paraphrased) is as follows:
Since people don’t think very hard about the choices they make, it is a lot easier to trick them into doing what you want than to try to educate them or incentivize them to change their behavior. There are many ways to trick people, but one of the easiest is simply by giving thought to the way choices are arrayed to them, or what they call “choice architecture.”
Let’s say you want men to stop accidentally peeing on the floor instead of in urinals in an airport bathroom. (Dubner is fascinated with airport bathrooms, so I’m sure he could think of some incentive schemes.) Or maybe someone could invent a new urinal. The choice architects have an easier solution: paint a fly in the urinal. It turns out with something to aim at, “spillage” is reduced 80 percent.
The Guardian has a more in depth review:
Thaler and Sunstein want to help real, fallible people make better choices without removing their right to choose. In many cases, the nudge required is to remove the need for people to do anything at all, on the grounds that inertia and bone idleness are fixed components of human psychology. Occupational pension schemes, for example, can be established either on an opt-in basis – meaning employees have to make a positive decision to join – or as an opt-out, with workers automatically enrolled in the fund unless they choose to get out.
For Rational Economic Man, there’s no difference. He carefully weighs up the pros and cons of the scheme and makes his decision. But a real person, afflicted by both a ‘status quo bias’ and what Thaler and Sunstein dub the ‘yeah, whatever’ heuristic, the differences are pronounced. Opt-in schemes have participation rates of around 60 per cent, while otherwise identical opt-out funds retain between 90 and 95 per cent of employees. It is no wonder that Adair Turner, in his report on pensions, urged legislation to push pension schemes to an opt-in default position and that policy is moving in this direction.
I wonder how the authors could nudge me into finishing their very worthy and interesting book instead of picking up another Swedish crime novel?