On the perils of environmentally friendly alternatives

Peer Reviewed
30 April 2024

Francisco Alpizar, Fredrik Carlsson, Gracia Lanza


Environmentally friendly alternatives (EFA) are touted as a key component of a transition towards lowering the impact of human activity on the environment. Still, the environmental costs of these technologies are seldom null; they are simply less environmentally damaging than existing options. In this paper, we investigate consumer behavior when an EFA is introduced. Using a carefully constructed field experimental design, we look at plastic bags vis-a-vis biodegradable (bio) bags, when the latter are offered for free versus at a price. Moreover, we explore offering costly biodegradable bags as part of the default choice. We find that giving away the bio bags for free results in a large behavioral rebound effect, resulting in a substantial increase in the total number of bags. Setting a small, rather symbolic price offsets this rebound effect completely. Interestingly, when the bio bag is offered as a default, the behavioral rebound remains. Our results lead us to conclude against providing these EFA for free and to caution against the use of subsidies to promote their uptake. 

Sustainable Development Goals
Publication reference
Alpizar, F., Carlsson, F., & Lanza, G. (2024). On the perils of environmentally friendly alternatives. Journal of Environmental Economics and Management, 125, 102967. https://doi.org/10.1016/j.jeem.2024.102967
Publication | 19 April 2024