Exploring Applications of Behavioral Economics Research to Environmental Policy-making in the Chesapeake Bay Watershed

Many pressing environmental management challenges, including restoring the Chesapeake Bay, are complicated and intractable. Solutions are elusive because these problems are influenced by a myriad of factors, including social and political ones. Their messy, or what has been termed “wicked “nature, stems not only from their biophysical complexity but from stakeholders ' differing perceptions and values, and the trade-offs that may be needed in problem-solving. Batie (2011) argues that normal science assumptions are inadequate for addressing wicked problems. The complexity of such problems implies that new research approaches are needed. The social sciences, including the emerging fields of behavioral economics and behavioral decision making, have much to offer in helping resolve these problems. The workshop we propose for Fall 2014 will investigate potential applications of behavioral economics and behavioral decision research to policy-making in the Chesapeake Bay watershed. The proposed activity will build on findings of the successful “Integrating the Social Sciences into Chesapeake Bay Restoration” workshop funded by the CRC (Paolisso, et al. 2011). In March 2011, researchers and decision-makers participated in a first-time discussion of the use of social sciences in Chesapeake Bay management. One of several areas of inquiry at the event was how to better understand individual decision-making utilizing social science theories and research findings. Greater understanding of individual behavior change holds promise of more effective policy decision-making for restoring the Bay. Our proposal for a follow-up workshop has the goal of increasing the depth of STAC and other social scientists’ knowledge about behavioral economics and behavioral decision-making and exploring potential applications in the Chesapeake Bay watershed. For more than 30 years bio-physical research conducted on the Chesapeake Bay has been elevating awareness of serious water quality problems and has been used to support better management of pollutants. Science-based policy has been instrumental in organizing command-and-control efforts directed towards the regulated sector of polluters, mostly larger point source polluters that are easier to identify. One challenging and “wicked” aspect of Chesapeake Bay management is how to address the countless individual actions by consumers and households, farmers and smaller landowners, and others located throughout the watershed, that cumulatively affect the Bay. Traditional educational and incentive-based policies have produced less than desired performance in dealing with unregulated sectors. Policy innovations such as market-based approaches like water quality credit trading entail daunting transaction costs. Many such policies also face intractable implementation obstacles. Given the need to make progress on implementing the Chesapeake Bay TMDL, contributions from across the sciences should inform Bay watershed management decisions. In particular, more involvement and integration of the social, economic, behavioral and decision sciences will be critical. The National Research Council concluded in its 2012 report “Science for Environmental Protection: The Road Ahead” that there was “a need to integrate theories, evidence, and tools for understanding how people respond to changes in the environment, how people respond to policy interventions that are designed to alter human behavior, and how specific policies can be implemented within the legal system of rights and strongly held, diverse cultural values”. A major conclusion of the report was that EPA’s