The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Tuesday, April 4, 2017

Strategic CSR - Cognitive dissonance

The article in the url below contains some interesting information on Americans' awareness of climate change as a problem, as well as their willingness to pay to solve that problem. It appears that, increasingly, Americans are aware that climate change is real, that it is a human-caused problem, and it is something that needs to be addressed:
 
"Americans of all political stripes are increasingly worried about climate change. This is undoubtedly good news for those advocating for robust policies to reduce carbon emissions, the main contributor to climate change."
 
Unfortunately, while awareness is growing, it appears that Americans are much less willing to pay, even a small amount, to solve the problem:
 
"This is what researchers from the Energy Policy Institute at the University of Chicago (EPIC) and the Associated Press … set out to better understand. Their nationally representative poll found that 43% of Americans were unwilling to pay an additional $1 per month in their electricity bill to combat climate change—and a large majority were unwilling to pay $10 per month. That's despite the fact that a whopping 77% said they think climate change is happening and 65% think it is a problem the government should do something about. Support plummets as the amount of the fee increases."
 
This response is out of all proportion to the threat posed by climate change, both to the group and to each household individually:
 
"This is an upside-down result. The best available science tells us that Americans should be willing to pay considerably more, because the damages from climate change are so great—including to them personally. If we use the federal government's estimate of the combined social cost of carbon pollution and apply it to the typical U.S. household's electricity consumption on today's national grid mix, the average household faces damages of almost $20 per month. Yet just 29% of respondents said they would be willing to pay at least that much."
 
So, the interesting question is how can we keep these contradictory thoughts in our heads at the same time? Humans' well-known capacity for cognitive dissonance allows us to recognize a problem as potentially existential, while at the same time not being willing to sacrifice individually for the benefit of the group. My sense is that the existential threat, even if believed, is perceived as distant, while the costs associated with preventing it are perceived as immediate. We have a collective need for short-term gratification that seems to override our longer term self-interest – there is a reason why so many of us have not saved enough for our retirement. In terms of the climate in the U.S., however, this mechanism seems disproportionately influential. While the article includes examples of different communities around the world that are willing to pay for a clean environment, the data suggests that willingness has yet to emerge in the U.S. As the author concludes:
 
"This is potentially bad news for climate policy. After all, if 43% of Americans are unwilling to pay even $1 to solve  a $20 problem, the policy landscape is likely to be challenging."
 
Take care
David
 
 
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Few Will Pay for Climate-Change Fight
By Sam Ori
November 14, 2016
The Wall Street Journal
Late Edition – Final
R8