Implications of Behavioral Economics for Designing Adaptation Policies

In order to prepare human and natural systems for arising challenges related to climate change such as more intense and frequent heat waves, droughts or floods, there are two main coping mechanisms: mitigation and adaptation. Despite concerted efforts to reduce climate-relevant emissions on a global scale (mitigation), total greenhouse gas emissions continue to increase. Therefore, the second coping mechanism – adaptation – is becoming increasingly relevant. However, when considering the potential of individuals to adapt to more extreme weather and slowly changing climate averages, decision anomalies, such as underestimations of risks or heuristics, as well as decision affects can constitute barriers for action. This paper provides an overview of these barriers and uses observations on efforts of households to prepare for hurricane events in the US and on private flood protection in Europe to illustrate them. Based on this overview, five policy recommendations are deduced that have potential to reduce the mentioned barriers or that take advantage of certain heuristics. Using social norms and peer pressure as well as establishing adaptation commitments and providing feedback are among these recommendations. Subsequently, a framework for policy-makers to develop behaviorally-informed interventions for nudging adaptation related behavior is outlined.