W J Wouter Botzen, Louison D Thepaut, Sanchayan Banerjee
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Kahneman's Insights for Climate Risks: Lessons from Bounded Rationality, Heuristics and Biases.
Daniel Kahneman's pioneering research in behavioral economics has profoundly influenced the field of environmental economics, shaping what is now known as behavioral-environmental economics. This paper provides a scoping review of how Kahneman's theories have been applied by environmental economists to individual decision-making for climate change risks. We focus on deviations from rational behavior that impact climate adaptation decisions, such as loss aversion, the underweighting of low-probability events and the influence of heuristic-driven System 1 thinking over analytical System 2 reasoning. Our review outlines diversity in methodologies, including household surveys and economic experiments, used to analyze actions like investments in climate resilience and the purchase of disaster insurance. We synthesize these findings showing how Kahneman's legacy explains suboptimal preparedness behaviors and discuss policy strategies derived from these insights, such as risk communication, nudges, and financial incentives for disaster preparedness. We conclude by proposing an agenda for future research to more systematically assess Kahneman's ideas across various climate risk contexts and to deepen the application of Kahneman's theories in tackling broader, wicked environmental problems that require changing human behaviors.
期刊介绍：
The primary concern of Environmental & Resource Economics (ERE) is the application of economic theory and methods to environmental issues and problems that require detailed analysis in order to improve management strategies. The contemporary environmental debate is in a constant state of flux and new or relatively unexplored topics are continually emerging. The Journal provides a forum for the further exploration of the causes, consequences and policy responses linked to these topics, across a range of spatial and temporal scales up to the global dimension. Contributions to the Journal should directly or indirectly be relevant to the policy formulation and application process. Areas of particular interest include: evaluation and development of instruments of environmental policy; cost-benefit and cost effectiveness analysis; sectoral environmental policy impact analysis; modelling and simulation; institutional arrangements; resource pricing and the valuation of environmental goods; environmental quality indicators. The editors wish to encourage a pluralistic approach to both theoretical and applied contributions. The publication of empirically based, policy-oriented research is given a high priority in the Journal in order to further critical discussion. Environmental & Resource Economics will also accept papers with an interdisciplinary approach, where this helps to improve knowledge of the real world complexities present, provided that the analysis retains links to or components of economic thinking. The Journal is required reading for economists, economic geographers and other academics, professionals and officials with a working interest in environmental matters.
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