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On the perils of environmentally friendly alternatives

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  • Alpizar, Francisco
  • Carlsson, Fredrik
  • Lanza, Gracia

Abstract

Environmentally friendly alternatives (EFA) are touted as a key component of a transition towards lowering the impact of human activity on the environment. Still, the environmental costs of these technologies are seldom null; they are simply less environmentally damaging than existing options. In this paper, we investigate consumer behavior when an EFA is introduced. Using a carefully constructed field experimental design, we look at plastic bags vis-a-vis biodegradable (bio) bags, when the latter are offered for free versus at a price. Moreover, we explore offering costly biodegradable bags as part of the default choice. We find that giving away the bio bags for free results in a large behavioral rebound effect, resulting in a substantial increase in the total number of bags. Setting a small, rather symbolic price offsets this rebound effect completely. Interestingly, when the bio bag is offered as a default, the behavioral rebound remains. Our results lead us to conclude against providing these EFA for free and to caution against the use of subsidies to promote their uptake.

Suggested Citation

  • Alpizar, Francisco & Carlsson, Fredrik & Lanza, Gracia, 2024. "On the perils of environmentally friendly alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    • Handle: RePEc:eee:jeeman:v:125:y:2024:i:c:s009506962400041x
    DOI: 10.1016/j.jeem.2024.102967
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    More about this item

    Keywords

    Plastic pollution; Behavioral rebound effect; Field experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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