FORPOL-01413; No of Pages 10

Forest Policy and Economics xxx (2016) xxx–xxx

Contents lists available at ScienceDirect

Forest Policy and Economics

journal homepage: www.elsevier.com/locate/forpol

Insights from behavioural economics for forest economics and environmental policy:
Potential nudges to encourage woodland creation for climate change mitigation
and adaptation?
Gregory Valatin a,⁎, Darren Moseley b, Norman Dandy c,1
a
Forest Research, Alice Holt Lodge, Farnham, Surrey GU10 4LH, UK
b
Forest Research, Northern Research Station, Roslin, Midlothian EH25 9SY, UK
c
Centre for Rural Policy Research, University of Exeter, Lazenby Building, St Germans Road, Exeter EX4 4PJ, UK

a r t i c l e i n f o a b s t r a c t

Article history: Evidence from behavioural economics illustrates how cognitive factors can affect the preferences, values and
Received 5 June 2015 choices of individual decision-makers. The evidence also shows how policy ‘nudges’ that account for the influ-
Received in revised form 23 December 2015 ence of cognitive factors can shift choices in socially desirable directions. Despite a wide range of potential appli-
Accepted 26 March 2016
cations, little research has been published to date applying behavioural economics in forestry. As an example of
Available online xxxx
how behavioural economics could be used, this paper considers the potential for nudges in encouraging wood-
Keywords:
land creation to help meet climate change mitigation and adaptation goals. Although forests offer significant cli-
Nudge mate change mitigation and adaptation potential, land managers are often reluctant to create new woodlands,
Behavioural economics hindering accomplishment of national targets. Nudges could potentially help overcome the barriers. Disaggregat-
Environmental economics ing behavioural elements of woodland creation using the Stages of Change model, we identify a number of rele-
Afforestation vant intervention points at which nudges could be applied. It is argued that nudges may best be tailored towards
Public policy different types of land manager taking account of differences in attitudes, motivations, circumstances and
Climate change behaviour. To be effective, a combination with other policy instruments is likely to be needed. Pilot studies are
recommended in determining which nudges are cost-effective. The paucity of existing studies drawing upon be-
havioural economics, or testing out nudges, points to this as a current frontier of both forest economics and pol-
icy, but can also be considered a frontier of environmental policy more widely. Developing a consistent valuation
framework allowing for the social endogeneity of preferences and for optimization (or some other protocol) to be
used in selecting policy options remains a fundamental challenge.
Crown Copyright © 2016 Published by Elsevier B.V. All rights reserved.

1. Introduction influenced by cognitive, ethical, and behavioural factors – including

Calls have been made to extend the boundaries of forest economics
(e.g. Kant, 2003), including to account for findings from behavioural
economics (Knetsch, 2005; Shogren, 2007; Kant et al., 2013). However,
studies linking behavioural economics and forest economics and policy
remain sparse. Existing studies include: evidence of other-regarding
preferences of villagers in India (Shahi and Kant, 2013; Kumar and
Kant, in this issue); results pointing to potential counter-productive
long-term effects of incentive programs aimed at increasing forest
cover due to behavioural feedbacks, suggesting social learning and my-
opic decision-making can be important (Henderson et al., 2013); evi-
dence from Mexico indicating that valuation of forest carbon offsets is
⁎ Corresponding author.
E-mail address: Gregory.Valatin@forestry.gsi.gov.uk (G. Valatin).
1
Current address: The Plunkett Foundation, The Quadrangle, Woodstock, Oxfordshire
OX20 1LH, UK.
knowledge of emissions and acceptability of carbon offsetting (Torres
et al., 2013); results indicating how harvesting and resource levels can
depend on heterogeneity of forest owners' preferences and objectives
(Rinaldi et al., 2015); results indicating the relative importance of large-
ly non-market forest ecosystem services (social, cultural, and land use
related activities) compared to financial rewards from a study of life
satisifaction among First Nations in Canada (Kant et al., in this issue);
evidence from Finland on potential to reduce forest policy costs and in-
crease ecosystem service provision by shaping written communications
through cognitive appeal to positive subjective experience such as hap-
piness or goodness, and cognitive optimality to increase the ease with
which people can imagine and simulate the text (Matthies et al., 2016).
Building upon and developing earlier work on insights from behav-
ioural economics for ecosystem services valuation and sustainability
(Moseley and Valatin, 2013) and policy nudges (Moseley et al., 2014),
this paper explores some of the implications of behavioural economics
for forestry economics and environmental policy. Noting the

http://dx.doi.org/10.1016/j.forpol.2016.06.012
1389-9341/Crown Copyright © 2016 Published by Elsevier B.V. All rights reserved.

Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
2 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx
importance of forests in meeting current climate change mitigation and
adaptation challenges, the potential for applying policy nudges to en-
courage woodland creation is focused on as a case study.
We begin by exploring some of the implications of behavioural eco-
nomics for forestry economics and policy. This is followed by a section
reviewing existing evidence on policy nudges – a form of instrument
that draws on insights from behavioural economics, outlining evidence
on their application in a range of contexts. The fourth section applies
these insights to a forestry case study, including background on barriers
to woodland creation, and considers potential for nudges to help over-
come these. This is followed by a discussion of some theoretical consid-
erations, practical and ethical issues relating to application of nudges.
Our concluding remarks then briefly reflect on insights from behaviour-
al economics as a research frontier for forest economics and environ-
mental policy.
2. Insights from behavioural economics
Evidence from behavioural economics illustrates how a variety of
cognitive factors and biases can affect choices (e.g. Groeneveld, 2010;
Hoehn et al., 2010; Pearson et al., 2012). These include effects of infor-
mation processing such as complexity, familiarity and salience; effects
associated with information presentation such as format and framing;
contextual factors including anchoring, hypothetical bias, setting and
reference state, as well as learning. The perspective that decisions are
constrained by the individual's ability to obtain and process information
(‘bounded rationality’) differs from the standard conception of ‘rational’
decision-making conventional in economics by considering the influ-
ence of cognitive factors including mental short-cuts (e.g. rules of
thumb) and habits in shaping preferences.
Behavioural economics insights could be viewed as critical for some
key elements of forestry economics and environmental policy. For
example, cognitive factors can influence the level of non-market
values for ecosystem services estimated using stated preference
techniques (Table 1), and also their variance (Table 2). Although
the extent to which different impacts are additive is unclear, the evi-
dence summarised in the Tables suggests that cognitive factors can
affect stated values by an order of magnitude in some cases.
Of the different cognitive factors, framing is fundamental in under-
pinning how forestry economics is analysed and policy conceptualised.
It shapes how problems are defined, causes diagnosed, remedies
suggested, moral judgements are made (Entman, 1993), and whether
solutions proposed are viewed as feasible to solve, or too complex or in-
tractable. It also shapes the findings of theoretical analyses. (An example
of how adoption of a safe minimum standards approach instead of un-
constrained maximisation one can reverse results in a game theory
model of international environmental agreements, can be found in
Valatin (2005)). There appears relatively little evidence at present on
the impact of framing on the effectiveness of environmental policies, al-
though potentially critical to their adoption and success (Nisbet, 2009;
Umpfenbach, 2014), and a focus of some analysis of media reports
(e.g. Corbett, 2015; O'Neill et al., 2015) and social media (Jang and
Hart, 2015).
The influence of cognitive factors on values poses a number of
important challenges at a theoretical level both for forestry and for
environmental economics and policy more widely. For example, once
individual preferences are recognised as dynamic, partly formed
through interactions with others (e.g. Kant, 2003) and social moulding
(Atkinson et al., 2012), rather than essentially fixed as traditionally as-
sumed in economics, optimality becomes difficult to define (Costanza,
2004).2 This poses a fundamental challenge to mainstream economics
to develop a consistent framework. This would need to allow for the so-
cial endogeneity of preferences – that values are formed partly in the
2
Entman (1993) notes a similar challenge relating to framing in gauging “true” public
opinion.
Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
process of making choices and influenced by others (cf. Bromley,
2008; Laband, 2013), with choices dependent on the choice set in
which they are embedded (Sunstein, 2000). It would also need to
allow the use of optimization or another protocol (e.g. ‘satisficing’,
cost-effectiveness in ensuring safe minimum standards, or in pursuing
a rights-based approach) to select policy options.
Developing a consistent framework that allows for the social
endogeneity of preferences could provide a sounder foundation to un-
derpin the rationale for interventions to steer and shape markets (cf.
Umpfenbach, 2014). It could also be more consistent with pursuit of
sustainability goals (Gowdy, 2004) and some existing strands of
policy-making. Endogenous preferences are more consistent with
behaviour change perspectives such as in public health, for instance
(e.g. that reducing the incidence of obesity requires altering preferences
and behaviour). Similarly, tackling problems such as global climate
change and biodiversity loss are argued to require changing behaviour
and social norms, which may then also lead to changes in values as
new norms of behaviour become internalised (Kinzig et al., 2013).
Behavioural change perspectives may seem anomalous to those
used to basing economic analysis upon consumer sovereignty. Howev-
er, they have the advantage of recognising that personal preferences
are not invariant and that cognitive factors can lead to systematic biases
which can inadvertently result in some behaviours that harm the
interests of the individual concerned, as well as those of wider society.
Meeting societal goals such as national carbon emission reduction tar-
gets, for example, is increasingly recognised as feasible only if people
change their behaviour – especially those responsible for the most
environmentally-damaging activities. Understanding how to change
behaviour is therefore a concern of government in order to ensure
policy success (House of Lords, 2011).
The next section considers existing evidence on use of a type of
policy instrument (‘nudges’) that aim to change behaviour by drawing
on insights from behavioural economics.
3. Policy nudges
Policy ‘nudges’, are a means of encouraging, or guiding behaviour
(Halpern, 2015). They aim to influence people's decisions without elim-
inating options, or appreciably altering their relative costs (Thaler and
Sunstein, 2008).
Nudges influence choices as a consequence of bounded rationality,
or cognitive biases. Hausman and Welch (2010), for example, consider
that nudges “are called for because of flaws in individual decision-
making, and they work by making use of those flaws”. 3
Nudges can shift choices in socially desirable directions (Thaler and
Sunstein, 2008). They are attractive within a policy context because
they can be perceived as relatively unobtrusive influences on individual
decision making. A benefit of using the approach is that (unlike regula-
tion) it is not compulsory and does not require additional financial in-
centives or disincentives. Consequently, policy nudges have potential
to offer a cost-effective approach that may be used in as an alternative
to, or often, alongside, more traditional ‘carrots’ and ‘sticks’.
Nudge has been promoted in the United States as sitting between
state interventionism and market driven norms (Selinger and Whyte,
2012). It was taken up by the UK Government through the formation
in 2010 of the Behavioural Insights Team (BIT) with a remit to find ‘in-
telligent ways to encourage, support, and enable people to make better
choices for themselves’ (BIT, 2010a). BIT has applied behavioural ap-
proaches to a range of policy areas, including health, environmental be-
haviour, consumer empowerment, crime, fraud, debt and error. Some
approaches combine regulation, incentives and nudges such as social
3
Much evidence on different biases exists, but the extent to which bounded rationality
per se is flawed remains disputed. Levine et al. (2015), for example, argue that bounded
rationality is fundamental to an empirically realistic characterization of humans as effi-
cient complexity managers.
 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx 3

Table 1
Influence of cognitive factors on stated non-market values.

Category Cognitive factor Aspect Impact on value Key references

Information Familiarity Awareness of threatened status of species 68% if aware versus 40% if unaware White et al. (2001)
processing (proportion of respondents willing to pay a
stated amount)
Salience Charismatic species used as a proxy for 6 times higher White et al. (2001)
biodiversity value
Information Format Textual compared to tabular information 2.5 to 4 times higher Hoehn et al. (2010)
presentation (acreage of new habitat considered
sufficient to compensate for lost habitat)
Framing Structural species groups compared to 2 times higher Milon and Scrogin (2006)
functional description (e.g. water levels)
Named species compared to a group of five 1.7 to 1.8 times higher marginal rate of Jacobsen et al. (2008)
unnamed species substitution
Label effect 1.3 times higher when ‘National Park’ label Czajkowski and Hanley (2009)
used
Context Anchoring One question (‘single-bound’) compared to 1.3 times higher Flachaire and Hollard (2006)
(starting point bias) initial question with follow-up
(‘double-bound’) choice experiment
Single choice experiment compared to a series 1.3 to 2.7 times higher Groeneveld (2010)
of choice experiments
Hypothetical bias Lack of payment mechanism compared to 2 to 10 times higher Macmillan et al. (2002)
expectation of payment based upon response
Setting Individual compared to group values 3.5 times higher Macmillan et al. (2002),
Kaplowitz and Hoehn (2001)
Citizen compared to individual values 2.1 to 2.4 times higher Ovaskainen and Kniivila (2005)
Reference state Initial question on environmental beliefs and 1.8 times higher Pouta (2004)
values
Learning Discussion with friends and family 1.2 times higher Macmillan et al. (2002)
Lexicographic Protest votes Median 3 times lower Dziegielewska and
preferences Mendelsohn (2007); Pearson
et al. (2012)

norms, e.g. smoking cessation – banning smoking in public places, in-
centives to quit smoking, and increasing social unacceptability of
smoking.
As nudges can have short-term effects and often do not actively
engage the individual, three related approaches have also been pro-
posed: ‘Steer’ (Grist, 2010) enables individuals to understand better
how humans make judgements, empowering them to steer their in-
stinctive (automatic) behaviour, through learned habits, towards
better decisions; ‘Ask’ (Ampt and Ashton-Graham, 2013) engages
the target audience to articulate their objectives and the behaviours
they can adopt to achieve these (the ‘ask’ element); ‘Think’ (John
et al., 2009) asserts that citizens, given the right context and framing,
can think themselves collectively towards a better understanding of
the problems and solutions.
3.1. Evidence on nudges
The United States and the UK have pioneered the application of be-
havioural economics to policy (although other countries have also
made a number of innovative applications) and consequently are the
source of much of the evidence on the application of nudges.
The evidence summarised below comes primarily from randomised
control trials (RCTs). These compare the response of a group subject to
an ‘intervention’ with a ‘control’ group.
None of the published applications reviewed below relate to forest-
ry. However, some relate to wider environmental policies such as reduc-
ing energy consumption and encouraging recycling.
The EAST (Easy, Attractive, Social, Timely) framework (Table 3) – the
approach currently used in the UK by BIT, is adopted in presenting evi-
dence below.
3.1.1. Easy - making it easier to do things
3.1.1.1. Defaults. Many people tend to accept pre-set options (Dolan
et al., 2012). Thus, providing options that benefit both the individual
and society seems sensible. For example, changing from ‘opt-in’ to an
‘opt-out’ scheme can significantly increase employee savings in pension
plans (Halpern, 2015), with one study in the United States finding the
impact to more than double (from 37% to 86%) in enrolment of recently
recruited employees (Madrian and Shea, 2001). Similarly, countries
where individuals are required to opt-out of organ donation are report-
ed to have far higher organ donation rates than those where they opt-in
(Johnson and Goldstein, 2003).
3.1.1.2. Simplification. UK tax letters written in plain English starting
with a simple request have been found by BIT often to be 2 or 3 times
as effective as the standard letters previously. Simply including a web-
link to the online tax form increased tax return completion by 22%
(Halpern, 2015).

Table 2
Influence of cognitive factors on the variance of stated non-market values.

Category Cognitive factor Aspect Impact on variance Key references

Information processing
Information presentation
Learning
Complexity Use of overarching scenarios or simpler 8 times higher for more complex formats Breffle and Rowe (2002);
resource-specific trade-offs DeShazo and Fermo (2002)
Format Textual compared to tabular information 2 times higher Hoehn et al. (2010)
(acreage of new habitat considered sufficient
to compensate for lost habitat)
Workshop discussion compared to no Reduce Christie et al. (2006)
discussion

Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
4 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx
Table 3
Categorisation of behavioural economics elements into Easy, Attractive, Social and Timely groups.
Source: Halpern (2013).
Easy Defaults Simplification
Attractive Salience Messenger
Social Norms Networks
Timely Priming Framing
As form filling is unpopular, pre-populating them can encourage
completion, while also saving time and reducing errors. Pre-
populating application forms and providing help to complete them
led to an increase in college enrolment rates for students from
lower income families in two US states increasing from 34% to 42%
(Bettinger et al., 2012).
3.1.1.3. Remove friction. There has been very low uptake of loft insulation
schemes in the UK despite large subsidies and information demonstrat-
ing that insulation pays for itself within months. A barrier was the hassle
of clearing an attic before it can be insulated. When insulation firms of-
fered to clear the lofts and dispose of unwanted junk at cost, there was a
fivefold increase in uptake even though this meant the customer paid
more (BIT, 2011).
3.1.2. Attractive (make messages stand out and choices attractive)
3.1.2.1. Salience. Redesigning forms to make them clearer and highlight-
ing key messages helps to draw people's attention to important
information, or actions required of them. This approach was applied
alongside social norms to increase tax compliance by doctors and den-
tists in the UK, increasing responses by 14%. These voluntary disclo-
sures, which reduced the need for follow-up letters were worth over
£1 million (BIT, 2012).
3.1.2.2. Messenger. Who communicates information can strongly influ-
ence individuals. The Department of Energy & Climate Change (DECC)
sets up a network of local energy efficiency ‘champions’, who would
commit to promoting the benefits of energy efficiency improvements
within their community (BIT, 2011) prior to launching the ‘Green
Deal’, an initiative to help people make energy saving improvements
to their homes. These champions were deemed to have increased com-
munity engagement and a desire to know more about energy efficiency
and community renewable projects (DECC, 2014).
3.1.2.3. Personalisation. Personal language in messages (e.g. adding
hand-written instructions on notes to the respondent), led to a doubling
of response rates to questionnaires (BIT, 2012). A trial of personalised
text reminders to pay fines from the Ministry of Justice that began
with the recipient's name led to a 10% increase in people making a pay-
ment compared to a standard text reminder.
3.1.2.4. Affect. Decision making can be strongly affected by emotions and
feelings of disgust are particularly strong. An advertisement to address
high levels of diarrhoea in Ghana showed mothers and their children
walking out of bathrooms with a glowing purple pigment that contam-
inated everything they touched. This created a sense of disgust and led
to a tripling in the percentage of people washing their hands after using
the toilet (Nudge blog, 2008).
3.1.2.5. Incentive design. Financial incentives to achieve better exam re-
sults have often been found to be ineffective whether given to teachers,
or students (Fryer, 2011). However, harnessing loss aversion, a study in
the United States found that giving teachers financial bonuses in ad-
vance (to be paid back subsequently if higher exam results are not
achieved) led to large improvements in performance. Maths test scores
Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
Remove friction
Personalisation Affect Incentive design
Reciprocity Active commitments Eyes & faces
Key moments
increased by 0.2 to 0.4 standard deviations — impacts comparable to re-
ducing class sizes by over one third (Fryer et al., 2012).
3.1.3. Social (tell people what others are doing)
3.1.3.1. Social norms. We are strongly influenced by what others do
(Dolan et al., 2012). Describing what most people are doing (descrip-
tive norms) makes people explicitly aware of other people's good
behaviour and has been demonstrated to be effective in encouraging
recycling, energy and water efficiency, and reducing littering
(Schultz et al., 2007).
There is evidence that there is an even greater effect when referring
to the social norm of a particular area. For example, publicising the fact
that 9 out of 10 people in their local area pay their taxes on time led to a
15% increase in payment of taxes in that area of Britain (BIT, 2012).
A RCT of 600,000 households in the United States, where residents
were supplied with a report comparing their energy use and CO2 emis-
sions with their neighbours, found energy consumption decreased by
2.0% (Allcott, 2011). Reductions in energy consumption have continued
to be sustained over time (Ayres et al., 2009).
3.1.3.2. Networks. A trial in two Greater London local authorities tested
the effect of varying levels of discount for energy efficiency products,
depending on how many people opt in to the offer. Alongside introduc-
ing a small financial incentive, the aim was to create a signal that others
are taking up the offer and form a social norm. Discounts increased from
10% for two households, to 15% for three households and 25% for five
households, thus giving people incentives to encourage others in their
local community to take up the offer with them (BIT, 2011).
3.1.3.3. Commitment (and exemplify). BIT, the National Health Service
and Boots UK (a major retail chemist) developed a smoking cessation
programme that combined incentives to stop smoking with a commit-
ment in the form of a signed ‘contract’ whereby participants keep or
lose rewards depending on whether they pass regular smoking tests.
The results suggest that people entering into a commitment with anoth-
er individual or group are more likely to respond in a positive way (BIT,
2010b), particularly if incentivised (see also Volpp et al., 2009).
The UK Prime Minister demonstrated the government's commit-
ment to reducing its own carbon emissions by requiring central govern-
ment to cut emissions from its office estate by 10% between 14 May
2010 and 13 May 2011. The target was exceeded, with a 13.8% reduction
reported. The government then sought to reduce its emissions by a fur-
ther 25% by 2015 (BIT, 2011).
3.1.4. Timely (make things timely and relevant and key decision-making
points)
3.1.4.1. Priming. Individuals' decisions are influenced by subconscious
cues. At a transit station in Singapore people are primed just before
they decide between taking the stairs or the escalator. The escalator is
stationary when not in use which has two effects. The first is that the
usual sound and movement is absent and the habitual attraction to-
wards the escalator is numbed. The second is that anyone unfamiliar
with the power-saving facility may think the escalator is not working.
The individual is primed into choosing the stairs over the escalator
 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx
and this has led to an increase in stair use at the station, saving power
and helping people develop healthy habits (iNudgeYou, 2012).
3.1.4.2. Framing. Many people assign financial decisions into different
‘mental accounts’ even though this may financially disadvantage them
(e.g. a holiday savings jar while there is an outstanding credit card
debt). This behaviour has been used to influence how government pay-
ments to individuals are spent. Adding the label ‘Winter Fuel Payment’
led to individuals being almost 14 times as likely to spend the money
on fuel than had their incomes been increased in other ways (Beatty
et al., 2011).
3.1.4.3. Key moments. In some countries welfare payments (conditional
cash transfers) have been used to encourage school attendance. Under
a scheme in Bogata, Columbia, releasing a third of the extra payments
just prior to the start of the next academic year in December to help
families meet associated expenses was found to lead to school enrol-
ment rates increasing by more than 2% compared to a system of con-
stant bi-monthly payments (Barrera-Osorio et al., 2011).
4. Case study: potential for nudges to encourage woodland creation?
4.1. Woodlands and climate change mitigation and adaptation
Woodlands offer significant climate change mitigation and adapta-
tion potential – including reducing downstream flood risk (Nisbet
et al., 2015) within the context of increasing extreme weather events.
Nationally (and globally), woodlands are an important component
of strategies to sequester carbon (Canadell and Raupach, 2008) as
recognised, for example, in Article 5 of the Paris Agreement of the Unit-
ed Nations Framework Convention on Climate Change (UNFCCC, 2015).
Compared to a range of alternatives, existing evidence points to wood-
land creation generally being a cost-effective method of climate change
mitigation (Valatin and Price, 2014). Forests provide a key element
in meeting climate change ambitions (Read et al., 2009), yet wood-
land creation is not progressing at a rate to meet these in the UK
(Thomas et al., 2015) and in some other European countries (e.g.
Duesberg et al., 2013). In the UK, for instance, forest cover is gradu-
ally increasing – averaging 14,600 ha per year (an annual increase
of 0.5%) over the period 1900–2015 (FAO, 2015, Table 2), but the
rate of increase is lower than during the 1980s (FC, 2015, Fig. 1.6).
UK forests now cover more than double the area of those at the be-
ginning of the twentieth century, but although they represent a
higher percentage of total land area in Scotland (18%) and Wales
(15%) than in England (10%) or Northern Ireland (8%), UK forest
cover (13%) remains far below EU (38%) and global (31%) means
(FC, 2015, Tables 1.2 and 9.1).
Many potential interventions are likely to be relevant to woodland
creation by a variety of decision-makers, including landowners, estate
managers, tenant farmers and external investors, and for convenience,
subsequently they will be collectively termed ‘land managers’. We dis-
cuss the potential for tailoring nudges to distinguish between groups
in Section 5.
4.2. Barriers to woodland creation
What accounts for low woodland creation rates in Europe and North
America? It is often farmers who manage much of the land that could be
used, but interest in creating woodland in this sector tends to be low
(Lawrence and Dandy, 2014). Recent surveys have shown that around
two-thirds (65%) of farmers in England, for example, are unlikely to
plant forests (Eves et al., 2014) and in Scotland only 18% of farmers
expressed any interest in planting (Stubbs, 2011). Regular efforts have
been made to discover the causes of this reluctance.
Although rarely the sole barrier, poor financial returns are often con-
sidered a barrier to woodland creation. Eves et al. (2014, Figs. 4–8)
Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
5
identified profitability of agriculture relative to forestry as one of the
three biggest barriers, along with a concern that woodland creation
would reduce the value of farm land. Financial returns can also be a
key barrier for external investors and institutional land managers
(Lobley et al., 2012). Survey-based studies tend to identify subsidies as
a significant influence on woodland creation decisions (e.g. Eves et al.,
2014; Glynn et al., 2012), with lack of access to aid and issues related
to administration and design of grants potential barriers.
More profound cultural and regulatory barriers also emerge from
the evidence. In particular, studies have consistently revealed a strong
resistance amongst farmers to the conversion of land from food produc-
tion to forestry (Burton, 2004; Duesberg et al., 2013; Neumann and
Krogman, 2007; Watkins et al., 1996). This resistance manifests itself
in many ways, which themselves can be encountered as ‘barriers’, in-
cluding as the expressed desire to continue long-standing (often inter-
generational) family commitments (Neumann and Krogman, 2007),
the maintenance of particular aesthetics associated with agricultural
crop production (Burton and Wilson, 2000), and in the near ubiquitous
belief that food production is their and their land's raison d'être. This last
factor leads to some commonly expressed perceptions such as that
there is a lack of ‘spare’ land for tree planting (e.g. Eves et al., 2014),
that the land is ‘too good’ for trees (e.g. Bell, 1999), and that allowing
woodland to regenerate is to ‘abandon’ the land. Furthermore, the
time scales intrinsic to forestry are at odds with the annual cycles em-
bedded within farming culture (Burton and Wilson, 2000). Some
farmers state they would not plant trees on their land even if forestry
were shown to be more profitable than other land-uses (Duesberg
et al., 2013).
Regulation can generate further inter-linked ‘barriers’ to woodland
creation. Land managers in the UK, for example, often perceive conver-
sion to forestry as a ‘one-way track’ in that the existing regulatory re-
gime ties afforested land into a cycle of growth, fell and restock –
preventing a return to agriculture (Dandy, 2012). This potential loss of
control (and option value) can be a ‘barrier’ to woodland creation deci-
sions. Second, the receipt of government grants often ties land man-
agers to providing public access, which can be unpopular and again
raises concerns about loss of control (Glynn et al., 2012).
In summary, there are a variety of reasons – both financial and non-
financial, why landowners and land managers are often reluctant to
create new woodlands, hindering accomplishment of national targets
for woodland creation and climate change mitigation (Thomas et al.,
2015). Although low afforestation rates are often attributed to lack of fi-
nancial attractiveness, much evidence suggests that wider issues are
also at play. These include long-held cultural views amongst farming
communities on what land is for which preclude changing land-use
(see Watkins et al., 1996) and a perception that climate change mitiga-
tion and adaptation are less urgent than more imminent threats such as
pests and diseases (Lawrence and Marzano, 2014). Simply providing
greater financial incentives is unlikely to be most cost-effective and
other approaches need to be considered.
4.3. Applying nudges to encourage woodland creation
In considering the potential for application of nudges, it is critical to
acknowledge that woodland creation is not a simple, short-term behav-
iour such as making a consumer purchase. Nor is it based on the quick,
intuitive or autonomous decision-making processes that, in light of dual
process theories (see Evans and Stanovich, 2013), many nudges are con-
sidered particularly relevant to. Rather it is a relatively complex phe-
nomenon comprising multiple smaller actions and decisions, and has
long-term repercussions.
Nonetheless, woodland creation is underpinned by a process of
awareness, consideration, interaction and decision making that offers
a number of distinct opportunities for engagement (‘intervention
points’) where nudges of different types may be applied to influence
land managers. It is for this reason that we draw on the Stages of Change
6 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx
(SoC) model (Prochaska et al., 1992), a widely applied cognitive be-
haviour change model, to disaggregate the practice of woodland cre-
ation into short-term stages that may plausibly be the focus of
nudges. The SoC model identifies five stages of ‘motivational readi-
ness’: (a) precontemplation, (b) contemplation, (c) preparation,
(d) action and (e) maintenance. It is not our argument that ‘reflective’
(Evans and Stanovich, 2013) cognitive decision-making processes do
not occur at individual stages, but only that the identification of ‘auto-
matic’ processes is not possible without breaking down the concept of
woodland creation. Technically, therefore, many of the interventions
we describe are not ‘nudges for woodland creation’ per se, but rather po-
tential elements in a series of nudges that, in combination, may result in
woodland creation through the stimulation of the necessary component
behaviours. A key rationale behind staged models such as SoC is that in-
dividuals at the same stage face similar problems and barriers, and thus
can be helped by the same type of intervention. We extrapolate this to
explore the idea that similarly staged individuals may be ready for sim-
ilar nudges.
4.3.1. Precontemplation
In the first stage, interventions could usefully focus on increasing in-
formation both about the benefits of woodland creation and of success
stories illustrating how perceived barriers such as the need for ongoing
maintenance can be readily overcome. They could promote discussions
of woodland creation amongst peer groups and networks at land man-
agement events, and establish accessible demonstration sites. There
may also be opportunities to ask individuals to make a choice about
woodland creation as part of wider application processes – such as for
land management grants. This stage also offers opportunities to lay
the groundwork for progression in later stages. For example, seeking
the registration of land manager's whole land holdings during other ac-
tivities such as claiming agricultural subsidies would establish a useful
baseline in considering whether to tailor nudges towards different
groups – such as those who have, or do not have, woodland on their
land already. For farmers in England, for example, those with existing
woodlands, as well as those with larger farms, are apparently more like-
ly to plant new woodlands (Eves et al., 2014). Registering whole land
holdings would also facilitate any subsequent grant applications to
plant new woodlands.
4.3.2. Contemplation
In the second stage managers are especially likely to seek clarifica-
tion of woodland creation benefits, often drawing on established and
trusted networks. As loss aversion could potentially be a key factor at
this stage, providing simple and accessible information on grants and
other supports, while also stressing their time-limited nature may be
useful. Streamlining application procedures will help create a positive
narrative about finance and administration from land manager peer
groups.
4.3.3. Preparation
Following a manager's decision to plant in principle, the third stage
offers a number of opportunities for support through simple interven-
tions. For example, assisting managers in identifying available land
and creating opportunities in relatively ‘public’ settings for them to
commit to planting new woodland. Making land registration and iden-
tification of contractors and suppliers easy could also be especially use-
ful for land managers in this stage.
4.3.4. Action
The fourth stage, at which point planting takes place, is both a critical
stage and the point at which the land manager may potentially be least
involved as the ‘behaviour’ may be carried out by others (e.g. contrac-
tors). Having said this, constructive interventions could include
supporting land managers in pooling or sharing information on contrac-
tors and suppliers, pre-populating grant forms, engaging other local
Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
stakeholders to communicate the benefits of planting. They could also
facilitate land managers joining local woodland groups and encouraging
land manager engagement with woodland creation by arranging meet-
ings on site.
4.3.5. Maintenance
At the final stage identified by the SoC model, a primary objective is
to ensure appropriate ongoing management of the trees that are
planted in order for woodland creation to be successful. A key nudge
here is to promote messages of sustainable forest management estab-
lishing expectations for management, especially amongst local social
groups. This could even progress to individual managers being asked
to become a woodland ‘champion’ to promote and assist woodland cre-
ation locally.
For the different types of nudges, some suggested applications to
encourage woodland creation by land managers are summarised in
Table 4 using the EAST framework categories. In addition, some
nudges might usefully target wider stakeholders and decision-
makers such as social impact investors (e.g. highlighting the climate
and wider societal benefits of creating woodlands), and local govern-
ment officials (e.g. to shorten planning approval times for large-scale
afforestation projects).
The types of nudges suggested above could be expected to help
overcome many existing barriers to woodland creation, including by en-
couraging farmers to move away from culturally polarised views of
themselves as involved in agriculture towards considering woodland
creation as one element of a more holistic view of land management.
Land-use across any given landholding is rarely homogeneous – farmers
apply different objectives and decision-making criteria to different parts
of their estate, often including small pockets of woodland seen as deliv-
ering desirable non-market benefits. A key to effective engagement is to
understand how different parts of the farm contribute to the overall
enterprise, both economically and culturally, and hence for those de-
signing nudges to try to ‘think like a farmer’ rather than a forester or
policymaker.
5. Discussion
As we saw (Section 2) cognitive factors can have large impacts on
preferences, values and choices. Cognitive factors (e.g. framing and
loss aversion) shape cultural barriers to woodland creation, but can in-
fluence the way land managers' perceptions of other barriers too
(Section 4). The influence of cognitive factors points to opportunities
for policy-makers to use instruments such as the nudges to help over-
come the barriers.
5.1. Theoretical considerations
Would nudges make a difference to long-term woodland cover? A
behavioural economics perspective recognising the social endogeneity
of preferences implies potential for multiple equilibria (or possibly a
lack of long-term equilibria) is likely to be pervasive. This suggests
that nudges, or similar interventions, could make a long-term difference
to the overall amount of woodland. Some may argue drawing upon
General Equilibrium theory that nudges will not have any long-run
effects as woodland cover will be determined purely by financial
returns, which provide feedback facilitating social learning. Howev-
er, in a world also characterised by complexity, uneven distribution
of resources, and diverse motivations for creating woodlands,
whether financial returns alone determine the level of woodland in
the long-run may be doubted, even in countries where subsequent
reconversion of forests is permitted. Results from chaos theory on
sensitive dependence to initial conditions are also worth recalling,
as these might imply that, akin to the ‘butterfly effect’ (for origins,
see: Hilborn, 2004), even a relatively minor nudge could conceivably
have a large impact on long-term woodland cover. Determining the
 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx
Table 4
Summary of types of nudges and potential application to woodland creation by EAST category (*).
Category Nudge Behavioural insight
EASY Defaults Individuals asked to opt-out (rather than
opt-in) to schemes
Simplification (Format) Make it clearer and easier
Remove friction Identify and remove actual or perceived
barriers
ATTRACTIVE Salience Draw attention to key points
Messenger People are heavily influenced by who
communicates information
Personalisation Personal messages increase response rates
Affect Use strong feelings to prompt decisions
Incentive design People focus on short-term rewards
SOCIAL Social norms Tell people what others are doing so that
people are made explicitly aware of other
people's good behaviour
Networks Using social networks to encourage
collective behaviour
Commitment Public commitment makes action more likely
Exemplify Individuals often respond to reciprocity
and fairness
TIMELY Priming People are influenced by subconscious cues
Framing and mental People assign decisions to different mental
accounts accounts
Key moments Timing interventions at critical points
*Table 3 provides a summary types of nudges falling under each of the EAST categories.
extent to which financial returns by themselves explain overall
woodland cover in the long-run remains an important question,
but one only empirical analysis is likely to resolve (and only where
the requisite financial data are available).
The long-term nature of woodland creation may imply that deci-
sions depend more upon the ‘reflective system’ (i.e. deliberate and
self-conscious thinking) than the ‘automatic system’ (i.e. rapid and in-
stinctive modes) of cognitive processing (cf. Thaler and Sunstein,
2008). If so, nudges that target the latter might be expected to have little
influence. However, which nudges are most effective is a question that
requires empirical evidence to answer. Nudges that target the reflective
system might prove the most effective, but the extent to which this
holds (if at all) can only be known with certainty after trialling different
nudges.
5.2. Practical considerations
Nudges may be most effective if tailored to specific groups to take ac-
count of differences in land managers' mindsets, motivations, circum-
stances and behaviour – such as whether they have previously created
woodlands. For example, as preferences for analytical or intuitive think-
ing vary, nudges targeted at choices that rely upon analytical thinking
(Sunstein, 2014; Hagman et al., 2015) may be most effective for some
individuals. Similarly, the most effective nudges for those land man-
agers for whom financial considerations are the main priority may be
nudges which focus upon the private benefits of woodland creation
(e.g. highlighting less well known financial advantages of creating
woodlands), whereas the most effective those for whom ethical issues
related to, for example, climate change are the major concern, may be
nudges focusing upon societal and community benefits. Land manager
typologies and segmentations (e.g. Eves et al., 2014) may prove useful
inputs in tailoring nudges.
The most effective nudges at increasing woodland cover may differ
between countries. In countries such as the UK, for example, where
Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
7
Application to woodland creation
Ask land managers to register whole land holdings as the default (rather than just areas
for which grants being currently applied).
Ensure information is easy to understand and language is clear; pre-populate application
forms
Identify any ‘sticking points’ in the bureaucratic and operational process of woodland
creation and offer a service to deal with them
Highlight the role of woodland creation in meeting climate change mitigation and
adaptation goals, less well known (e.g. tax) benefits of woodland ownership, and
opportunities to gain additional income through carbon markets
Encourage land managers to become a ‘woodland champion’ to reinforce woodland
planting as a social norm
Add hand written instructions and contact details to information packs and application
forms
Highlight regions or business types with a high carbon footprint and emphasise the
negative environmental effects (while highlighting the opportunities offered by
woodland creation)
Restructure incentives for woodland planting so they are ‘front-loaded’ and fit well with
helping to meet other management objectives, e.g. improving adjacent habitat
Highlight the ‘pro-social’ behaviour of land manager's neighbours and peers who plant
woodland
Encourage collective interest in woodland planting (e.g. by increasing grant rates once a
threshold level of woodland creation has been achieved in a locality)
Encourage public commitments to create woodlands (and then publish pledges on websites)
Encourage woodland creation through example and by public commitments
Prime target audiences with woodland creation success stories and demonstration sites
Promote options that allow people to assign woodland creation to different mental
accounts (e.g. as a retirement fund, or source of non-market benefits)
Introduce interventions following media coverage of climate change or flood events or at
key life stages when and managers are open to change (e.g. retirement from active
farming, or new ownership)
reconversion of woodland back to agriculture is not allowed, focusing
on encouraging initial woodland creation and subsequent management
will be most important. Elsewhere, nudges aimed at encouraging long-
term retention of land under forestry may also be very important. In
such countries long-term monitoring of land use change could help
identify the extent to which nudges or related policies result in a perma-
nent switch to woodlands.
By themselves, nudges cannot be expected invariably to provide a
solution. For land managers struggling with their short-term cash-
flow to make a profit, for example, many nudges may be ineffective un-
less also accompanied by enhanced financial incentives. While nudges
can operate outside of incentives and regulation, they sometimes
work best in concert with them. Recent case-study research has con-
firmed that multifaceted forestry interventions can be particularly effec-
tive at promoting sustainability behaviours including woodland
creation (O’Brien et al., in press).
Their success in other contexts points to a need to investigate whether
nudges would provide a cost-effective mechanism to encourage wood-
land creation. Pilot studies such as RCTs will be needed to address this.
Given lack of certainty concerning the extent to which nudges will
prove effective, adopting a ‘test, learn, adapt’ approach – along the lines
recommended by BIT (Haynes et al., 2012), may provide the most useful
basis for investigating which work, or do not work, in particular contexts.
This would also provide a basis for determining to what extent differenti-
ating nudges or targeting specific groups is cost-effective.
Nudges may need to be applied in a series of steps – a combination
(or sequence) of passive nudges, say to increase general awareness,
followed by nudges that encourage more active decision-making. Evi-
dence from pilot studies could help in identifying the extent to which
changes at particular intervention points or in specific elements (e.g. the
commitment to plant woodland) leads to subsequent woodland creation.
Pilot studies could also provide a basis for comparing the relative efficacy
of different nudges in encouraging woodland creation, as well as compar-
isons of their cost-effectiveness compared to other instruments (e.g.
8 G. Valatin et al. / Forest Policy and Economics xxx (2016) xxx–xxx
financial incentives). Gathering further qualitative evidence, including on
any existing informal uses of nudges in forestry, would also prove
insightful.
Given the long-term nature of woodland creation, trialling nudge-
related policies such as ‘ask’ and ‘think’ that more fully engage the ‘reflec-
tive system’ of cognitive processing could prove very useful too. Applica-
tions such as encouraging reduced water use under the WaterSmart
programme in Australia (Ampt and Ashton-Graham, 2013) suggests
such approaches can be effective, although little evidence exists in the lit-
erature on their cost-effectiveness at present.
5.3. Ethical considerations
The normative aspects of nudges have received a great deal of criti-
cal attention in the literature, with consideration to, amongst other
things, their liberal credentials (Grüne-Yanoff, 2012), transparency of
implementation (Bovens, 2008), and paternalism (Hausman and
Welch, 2010). These appraisals have led some, although not all (e.g.
Nagatsu, 2015), to conclude that nudges can constitute an infringement
of personal autonomy and are intrinsically manipulative. Indeed, objec-
tions to the use of nudges often focus on the idea that they are intrusive,
and it is useful to acknowledge that there will always be some actors
who object to any governmental interference (explicit or otherwise)
with decisions about private property. However, some argue that
there is no neutral architecture (Johnson et al., 2012) and it is
recognised that ‘all government policies include, to a greater or lesser
extent, some element of intended behaviour change’ (House of Lords,
2011), and ethical issues relating to nudges can be addressed in a num-
ber of ways. These include ensuring adequate oversight through public
consultation and permission, transparency and monitoring of public
concerns, avoiding conflicts of interest and ensuring claims made are
true (Halpern, 2015). Ensuring claims are not misleading or biased
can be especially important in designing nudges, the information con-
tent of which, could otherwise risk just being viewed as a form of
propaganda.
Would the use of ‘nudges’ for woodland creation raise normative con-
cerns as have been levelled in other contexts? While the intent behind
some of the proposed mechanisms (such as default registration of
whole land holdings) may appear less than wholly transparent, it is un-
likely that any pose a significant threat to agents' core preference struc-
ture. Thus, following Nagatsu's (2015) argument, it is perhaps unlikely
that the nudges will constitute infringements of the personal autonomy
of land managers. Tailoring nudges to account for the intrinsic variation
of beliefs and attitudes amongst land managers could reduce this threat
further and help avoid potential perverse (‘reactance’) effects (Ampt
and Ashton-Graham, 2013) associated with a mismatch of values.
Nonetheless, recognising ethics to be culturally-specific, trialling
nudges may not be considered ethically acceptable in certain countries,
or not without more formal democratic oversight. For example, the Ger-
man Constitution could be interpreted as explicitly prohibiting experi-
ments with nudges without Parliamentary clearance (Halpern, 2015).
5.4. Other potential forestry applications
Although their potential use in encouraging woodland creation is
the primary focus of the case study in this paper, the applicability of
nudges could usefully be explored in a range of other forest policy
areas too. These include use in encouraging diversification of
existing forests to reduce risks of pests and disease outbreaks, as
well as in mobilising wood/fibre for new markets such as woodfuel.
6. Concluding remarks
Insights from behavioural economics provide a rich seam of evidence
that could usefully be mined in developing forest (and environmental)
economics and policy. Developing a consistent valuation framework
Please cite this article as: Valatin, G., et al., Insights from behavioural economics for forest economics and environmental policy: Potential nudges
to encourage woodland creation..., Forest Policy and Economics (2016), http://dx.doi.org/10.1016/j.forpol.2016.06.012
that allows for the social endogeneity of preferences and for optimization
or some other protocol to be used in selecting policy options remains a
fundamental challenge. In the interim, for policy appraisal, pragmatic ap-
proaches – such as adopting target-consistent values based upon the cost
of achieving them – such as currently used in the UK for social values of
carbon (for discussion, see Valatin (2014)), and tools such as sensitivity
analysis will continue to prove useful.
While recognising that policy nudges are not a panacea (Selinger
and Whyte, 2012) and will often need to be applied in conjunction
with other measures, investigating their potential in addressing climate
change mitigation and adaptation, as well as other agendas, will be
important in developing cost-effective policies in forestry and other sec-
tors. Given current interest in Great Britain within the Forestry Commis-
sion, results from applications of nudges to UK forestry may also be
anticipated before long.
Acknowledgements
Thanks to Jianhua Zhou, Pradeep Kumar, and participants at the
NFFE 2015 conference, as well as to Chris Quine and Helen Mackay for
their comments and suggestions. Thanks also to Shashi Kant and to
the local conference organisers and hosts, including Jintao Hu, Lijun
Liu, Yuanyuan Yi and the managers of the Inner Mongolia Da-Xing-
An-Ling State Forest. Darren Moseley undertook initial literature re-
views on which this paper builds and was responsible for drafting
much of the sections on existing evidence and potential application of
nudges, and is considered joint lead-author. Norman Dandy was re-
sponsible for drafting text on barriers to woodland creation and applica-
tion of the SoC model to the application of nudges.
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