Nudging the Can Down the Road?

This week the UK’s Transport secretary Grant Shapps announced an initiative, supported by the UK’s Behavioural Insights Team (BIT), to introduce green license plates for electric vehicles. The rationale behind the initiative is nudging, a behavioural approach to policymaking championed by Nobel laureate Richard Thaler and Harvard law scholar Cass Sunstein.

A nudge is a small change in the environment in which a decision is taken which has a significant and predictable influence on the outcome of that decision. The green license plate is a nudge because it supposes there is constantly a decision in the back of our minds which we must make: should I buy an electric car? By increasing the salience of electric car ownership, the green license plate is theorised to nudge people into adopting this cleaner mode of transport as they realise electric car ownership is not quite so out-of-the-ordinary.

It’s a great idea and seems to have been met with significant enthusiasm from members of the nudging community. But beyond shining a light on electric car ownership, the green license plate nudge is also highlighting the potential limits of nudging.

It’s usually accepted that nudges have limits. Thaler and Sunstein, for example, have stated that they don’t believe nudges should be used to prevent murder — in many policy areas, the soft approach of nudging is inappropriate. And it is this rationale which argues murder is so important we cannot leave it to subtle nudges which can also be applied to the questions of air pollution and global warming.

The green license plate nudge can be called inappropriate in two ways. Firstly, because the nudge recognises the problem (polluting vehicles) and embraces a marginal solution (drive a different type of vehicle) rather than a more substantial solution (widespread investment in public transport, decentralise urban spaces to reduce commuting distance, roll-out reliable broadband to enable people to work from home). Thus, the first criticism of this nudge is one of opportunity cost: it is the easiest (and cheapest) option available, but probably not the most effective.

The second criticism is that the nudge launders political inaction, transforming this inaction (in appearance) into effective action. Nudges, by their nature, are technocratic solutions, and often receive tremendous praise when tackling technocratic problems such as paperwork. The problem with the green license plate nudge is that it’s a technocratic solution to a much larger problem, one which demands much grander solutions. The nudge might contribute to a solution, of course, but so long as the nudge masquerades as the solution, justifying political inaction, the green license plates may actually do more harm than good.

In my opinion, I think it’s good that behavioural policies like the green license plate are being met with both praise and scepticism. On paper, the nudge sounds like a very smart idea, and we should be reluctant to reject smart ideas when they pop up. But policymakers should also be reluctant when ignoring scepticism, for the scepticism will often enhance the policy. For example, the green license plate may encourage people to buy electric cars. But if they can’t afford to go electric, the nudge will subsequently be enhanced by the introduction of, say, a government incentive scheme.

For some (such as Thaler and Sunstein) this incentive would mean the nudge isn’t really a nudge anymore, but for most people, that’s not the point — the point is to clean up our transport. We need scepticism to reveal these opportunities, to hold policymakers to account, and to achieve substantial change when substantial change is needed. Nudges have a role to play in public policy, but so do the voices which disagree with them.