Mitigating the effects of climate change is one of the most pressing challenges of our times. Massive efforts have been invested to develop technologies reducing the amount of CO2-emissions emitted by human activity. However, many of the now widely available technologies struggle to reach a widespread adoption, which risks delaying the urgently needed reductions of CO2-emissions.
A better understanding of the psychology behind human decisions and consumer preferences for sustainable technologies may help solve this puzzle. Research from the behavioral sciences has shown that cognitive biases can be important blockades to the effective mitigation of climate change. Cognitive biases, i.e., systematic distortions of judgments that result from a mismatch between the cognitive strategies used by an individual and the specific decision context, can lead to individually and collectively adverse outcomes. Present bias can result in insufficient retirement savings, loss aversion can block investments in energy-efficient technologies. But fortunately, a better understanding of biased decision making can also point to solutions: When cognitive biases can be effectively addressed, this can counter or even eliminate their adverse effects. In the present research, we tested this approach in the context of consumer preferences for electric vehicles.
Despite their potential to drastically reduce mobility-related CO2-emissions, many people remain skeptical about battery-electric vehicles. Their shorter driving range often raises concerns to run out of battery in the middle of a trip. This range concern reduces consumers’ willingness to adopt electric vehicles. But is it justified?
Research across many countries has shown that currently available battery ranges can cover the daily driving needs of the vast majority of drivers. This suggests that drivers tend to systematically underestimate the compatibility of available battery ranges with their driving needs – their perception seems to be biased.
To investigate this possibility, we collected data from two representative car owner samples from the United States and Germany. For each car owner, we estimated actual driving needs based on detailed self-reported mobility data and determined the percentage of individual trips that could be covered with various battery ranges. We then compared this objective compatibility with car owners’ subjective estimations of battery range compatibility.
The discrepancy between these two estimations was considerable: On average, US and German car owners underestimated the objective compatibility of electric vehicles by about 30%. Crucially, this bias related to preferences for electric vehicles: The larger the bias, the lower were car owners’ intentions to buy an electric vehicle and the higher was their demand of large (i.e., oversized) batteries.
Our findings confirmed previous research pointing to battery range perceptions as an important psychological barrier to the adoption of electric vehicles. But on top of that, it suggested a potential solution: countering the biased perception of compatibility. In the second part of our research, we designed a behavioral intervention targeting the compatibility bias with the aim of reducing range concern and increasing preferences for electric vehicles.
We conducted two online experiments with car owners in the United States and Germany. We again estimated the objective compatibility of different battery ranges with car owners’ individual driving needs. Car owners then reported how much they would be willing to pay for a number of electric vehicles with varying battery ranges, and indicated their concern to run out of battery with a given vehicle.
Importantly, we experimentally varied how battery range information was presented to different groups of car owners: In the control group, car owners were only provided with the battery range of electric vehicles – the status quo on the car market. In the intervention group, car owners saw the same battery range information, but in addition to that, information about the compatibility of a given battery range with their individual driving needs. For example, for a specific car owner we provided the information that more than 90 % of their individual annual car trips could be covered with a battery range of 120 miles. This compatibility information drastically reduced car owners’ range concern and increased their willingness to pay.
This means that providing compatibility information may usefully complement conventional strategies of promoting electric vehicles by increasing battery range, the density of charging infrastructure, or by providing purchase subsidies. Such a behavioral intervention could be implemented on a large scale and at low costs, providing a novel approach to limiting the demand for oversized, resource-intensive batteries.
We moreover observed a more pronounced effect of the compatibility intervention for car owners with higher current mobility costs, for whom an electric vehicle would yield higher financial benefits. This alleviates concerns about distributional effects of behavioral interventions, as the compatibility intervention did not “push” low-income households to exceed their mobility budget but incentivized those who would benefit most from buying an electric vehicle. Accounting for the heterogeneity in intervention effects allows to more precisely target behavioral interventions, increasing their positive impact and avoiding unwanted side-effects.
Overall, our work contributes to a growing field of research demonstrating the importance of cognitive blockades and knowledge gaps to the adoption of low-carbon behaviors. Identifying and correcting cognitive biases in individuals’ judgements and decisions will be crucial to a successful climate mitigation. Otherwise even highly environmentally motivated individuals may struggle to identify the most appropriate and useful behavior to effectively reduce their carbon footprint.