Behavioral Economics to Tackle Climate Change in Agriculture

Abstract

In addressing climate change, the role of farmers is critical, necessitating their adoption of sustainable agricultural practices that reduce greenhouse gas emissions and increase resilience. These practices offer environmental and economic benefits and enhance farmers’ resilience and socio-economic status. The adoption of sustainable practices is influenced by economic, social, cultural, and behavioral factors and their perceived advantages and compatibility among farmers. Despite the recognized benefits, global adoption rates of sustainable agricultural practices lag behind the ambitious targets set by the 2030 Sustainable Development Goals. Behavioral economics and behavioral insights, which is the application of behavioral economics to solve everyday problems, provide a comprehensive understanding of studying farmers’ decision-making processes when adopting or not adopting certain practices. This understanding can inform the design of policies based on choice architecture and nudges, which have demonstrated remarkable effectiveness in various contexts, including agriculture, by shaping decisions and encouraging sustainable behavior. Nudges are simple interventions that alter individuals’ attitudes and behaviors without resorting to mandatory or costly measures. This chapter presents a framework to explore the significant role of behavioral economics and behavioral insights in combating climate change. Green nudges are highlighted as a distinct and promising environmental and climate policy tool within this framework. The discussions in this chapter aim to offer guidance to policymakers specifically focused on addressing climate change in agriculture.