Behavioural instruments in environmental law and policy: Potential and challenges

Abstract

The behavioural revolution in law and economics led to the insight that command‐and‐control and market‐based instruments have limitations in bringing about behavioural change. Environmental behavioural instruments use persuasive strategies or techniques rather than direct incentives to encourage environmentally responsible decision‐making. This article investigates the potential and challenges of behavioural instruments in environmental policy based on a survey of theories and examples concerning environmental behavioural instruments. Behavioural instruments can reduce the information costs of environmental regulation while increasing self‐efficacy for environmental compliance. More importantly, behavioural instruments can be cheap and effective by activating various norms in specific contexts. However, the behavioural approach, because of its focus on individual compliance, may not be well suited to address (transboundary) externalities. Behavioural instruments are especially important in generating positive externalities by appealing to social norms. Such mechanisms are, however, less suited to internalising negative externalities. The effects of behavioural instruments may not be easily guaranteed (in the long run), especially when the environmental goal of the behavioural approach clashes with private interests or fails to consider individual differences and contextual factors. We therefore argue that behavioural instruments should be included alongside standard regulatory tools, thus reaching an optimal mix between both.