Thaler, a pioneering economist at the University of Chicago, has helped redefine how we understand human motivation and decision-making. His groundbreaking research into behavioral economics has upended the concept of homo economicus —the notion that people are completely rational decision-makers — and found that humans are often quite irrational in their economic decisions. But Thaler’s discoveries aren’t limited to economics. We can also draw on his work as we address global challenges like climate change.

Human psychological biases and behavioral tendencies — such as preferring that things stay the same, avoiding things that are difficult, and discounting the future — exacerbated the effects of the 2008 financial meltdown. (In a memorable scene from the 2015 film "The Big Short," Thaler and pop singer Selena Gomez helped explain one of them). These tendencies also contribute to why humans are hard-wired to make climate change such a terrifically hard problem to solve. Changing behavior to address environmental challenges has proven difficult because it usually requires cooperation amongst groups, and the benefits often take time to see.

But the principles of behavioral economics, like those advanced by Thaler, give us reasons for hope.

One bedrock principle of Thaler and other behavioral economists is that people are emotional and “predictably irrational” in their decision making. For example, people tend to assign greater value to things if they own them. Thaler calls this the “endowment effect.” In a famous experiment, Thaler gave mugs to half the students in a classroom. The students who received mugs believed the mugs were twice as valuable as the students who did not receive one.

Read the full article about human behavior and the climate crisis by Brett Jenks at Stanford Social Innovation Review.