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Climate policies change people’s orientations

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According to a team of researchers led by the Potsdam Institute for Climate Impact Research (PIK), which published the study “Resource and Energy Economics” lo studio «The economics of climate change with endogenous preferences» in the journal «Resource and Energy Economics», climate-friendly policies change the way people think about what they do. People’s preferences are more dynamic than economics often assumes. The researchers’ advice to policymakers is to take people’s changing attitudes into account when tailoring policies such as carbon taxes or building low-carbon infrastructure.

«The design of climate mitigation policies is based on economic models, » said Linus Mattauch, researcher at PIK and the University of Oxford. «Our research shows that it is possible to improve such models to represent changes in orientations that represent values and habits, meaning essentially what you like, what you prefer to consume more of and less of. Economists generally assume that you are basically born with a fixed set of values and orientations that remain that way throughout your life, simplifying with respect to reality. And, above all, if you assume that your predilections will always remain the same, it would be difficult to undertake a real change such as the transition to a decarbonised economy».

Changes in orientation are well documented in the past: when the negative health impacts of smoking were raised in educational campaigns along with price interventions and bans, more and more people stopped smoking. However, economics rarely interprets this as a change in preferences. Thus, climate policies may constitute a change in the way people see things. For more information, consult here.