There seems to be a nearly endless list of things we’re required to do to address climate change: from quitting meat, to insulating your home, to planting trees. It’s true that all these actions by themselves only make a small difference in the grand scheme of things, but are they useless? Far from it. Because of the following psychological, economical and political principles the small environmental acts you do make a much bigger impact than you might think:
The mere-exposure effect states that people are more likely to prefer, appreciate and choose things that they are familiar with. So the first person to install solar panels on his roof was likely looked upon with some discomfort. It was unfamiliar and people hadn’t been exposed to it. But now you see them everywhere and people appreciate it more.
So as you adopt a new environmentally friendly technology, product or behavior, you make it easier for all people around you to choose it as well. People’s internal resistance to it dissolves and they more likely to join you as they get more and more exposed to it.
The social norm effect states that people like to conform to the social norms of the groups they identify with. Whether it is with the people at work, at your sports club or even with your fellow citizens in general, there is to some degree an urge in us to fit in. Even people that go against the fundamental social norms of society usually form their own groups to identify with.
Returning to the solar panels situation: if 18 out of 20 people in the street installed solar panels, those last 2 people will likely feel a little bit of pressure to install solar panels as well and conform to the newly created social norm. Similarly if you were a vegetarian a few decades ago, you deviated from the social norm and would likely feel pressure once in a while to eat meat. Nowadays it has become much more accepted to be a vegetarian and in some groups it has even become the social norm.
So every time you are ahead of the curve and help to create new, more environmentally friendly social norms you might run into some resistance, but as you help to shift the norm you contribute to massive changes in society and make it easier for all people, companies and governments to join you.
Negative externalities are the negative effects for society or nature that companies create when making their product that don’t negatively affect the company. For instance if you produce steel using outdated coal fired plants and release massive amounts of carbon dioxide and toxic pollutants into the air, those emissions are negative externalities because in most countries the company won’t be directly negatively affected by them.
In a purely capitalist system without regulations or morally driven behavior, the most ruthless firm usually wins, since they are willing to maximally drive profit while having the least concern for negative externalities. But there are two main ways to internalize the negative externalities, which means that there are mechanisms through which the company is also negatively affected by them and not just society.
The first way is to set up a government controlled system where the company has to pay a significant price for the pollution they cause. Or in the worst case face huge fines or even close down if they fail to comply with regulations.
The second way is when consumers and other businesses know about the pollution this particular type of steel plant produces and begin to avoid buying from this supplier. This way the company’s revenue goes down and the market forces them to reduce their pollution, for instance by switching to hydrogen based steel production or seize operations entirely. In short: you’re voting with your wallet how companies should behave.
Through these two mechanisms what’s good for society and the environment becomes what’s good for the company and we avoid an evolution towards ruthless environmental destruction. So as you vote with your wallet you help to internalize negative externalities for companies so that they change their practices.
Companies are always looking to catch new trends to differentiate themselves from the market and explore new opportunities. So if people buy more of a certain environmentally friendly good, it will be noticed by them. Initially prices may go up because the supply is lacking. But soon bigger investments will be made to capitalize on the new trend.
Because of these larger investments economies of scale kick in which state that if a good is produced at a larger scale the costs per item go down. Because of increased demand new companies are likely to enter the market as well so competition increases, which further brings down prices and makes the products more attractive.
Given these investments, companies are likely to spend more on advertising these sustainable products as well. This creates further awareness about the more sustainable option in the market and increases demand even further, resulting in a more sustainable society.
If you ask politicians to push for more environmentally friendly policies, their first instinct is to look at the political support for these policies in their electorate, since those are the people they serve and that will determine if they get to keep their jobs. So in a truly democratic society the attitudes of the electorate determine how far politicians will go with their environmental policies.
All of the four previously mentioned principles help to change the attitudes of the electorate, which gives politicians more incentive to go further in their sustainable ambitions. So all these small actions you do in daily life, even contribute to some grand environmental policies down the line.
By letting us plant trees for you in Tanzania to offset your carbon footprint you also get access to the program ‘In harmony with earth’ where you learn more and more about how to make most environmentally friendly choices to make in life. So order your trees now: