University of Technology Sydney

23791 Behavioural Economics of Environment

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2022 is available in the Archives.

UTS: Business: Economics
Credit points: 3 cp

Subject level:


Result type: Grade and marks

There are course requisites for this subject. See access conditions.


This subject explores key insights from behavioural economics to the analysis of environmental problems and policies. It builds students’ understanding of how economic, behavioural and social influences interact to determine environmental choices and outcomes for individuals, groups and society as a whole.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. Apply key principles from economics and behavioural economics as they relate to environmental decision-making and policy
2. Analyse the collective action nature of environmental problems and how insights from behavioural economics can be used to guide individuals and groups towards responsible environmental behaviour
3. Develop policy insights about the relative efficacy of traditional environmental policy tools versus behavioural economic policy solutions

Contribution to the development of graduate attributes

The subject will explore how environmental issues and policies can be understood in terms of insights from behavioural economics (GA1). It will also enable students to understand the implications of behavioural insights in the design of innovative and effective behavioural policies to complement conventional economic policies in guiding and incentivising more far-sighted environmental decision-making and choices (GA5). Via the subject assessments, students will develop their skills in leveraging their understanding of different approaches to environmental decision-making and policy as applied to everyday business problems and challenges (GA2).

This subject contributes to the development of the following graduate attributes:

  • GA1: Business knowledge and concept
  • GA2: Critical thinking, creativity and analytical skills
  • GA5: Business practice and oriented skills

This subject also contributes specifically to the following program learning objectives:

  • Develop options to address identified behavioural economic factors in business problems (2.1)
  • Convey information clearly and fluently in a written and verbal form appropriate for the problem, data and stakeholders (3.1)

Teaching and learning strategies

This subject is taught through a blend of online resources, self-directed study, seminars and student collboration via group tasks and peer group learning. Subject content will be presented to students in a variety of formats (lecture slides, notes, articles) and delivered both online and in-class. At the beginning of the module, students are expected to review materials and complete tasks on their own before attending a weekly Zoom review session with the lecturer. Materials will be provided to students on UTS learning management system, but students are also expected to seek information independently. The specific insights from economic thinking will be taught in from principles to applications with many discussions/examples of puzzles where economic thinking cast a useful light to understand a problem. At the end of the module, seminars offer face-to-face interaction to review the material and engage students with the material. Seminars are highly interactive. Students will receive individual feedback in-class from the lecturer.

Content (topics)

  • Background principles: traditional economics (rational choice, game theory, coordination failures, and free-riding) versus behavioural principles (behavioural incentives/motivations; social influences, preferences and norms; heuristics, bias and misperceptions of risk)
  • Bias, ‘folk wisdom’ and present bias: environment attitudes/actions; resource use and wastage
  • Social preferences, social norms, and social learning: energy use and recycling
  • Socio-economic drivers of community and collective action: pollution and littering
  • Policy insights: using behavioural economic principles to devise environmental nudges and other policies to improve environmental choices and decision-making.


Assessment task 1: Short answer questions (online quiz) (Individual)*


This addresses subject learning objective(s):

1 and 2

Weight: 35%

4 questions, 2-3 paragraph per question


Analytical capacity, understanding of fundamental principles, application to real world policies and problems

*Note: Late submission of the assessment task will not be marked and awarded a mark of zero.

Assessment task 2: Policy Briefing Report (Individual)


This addresses subject learning objective(s):

1, 2 and 3

Weight: 65%

Word limit: 2000 words. For readability, please use 12 point type, with 1.5 spacing.


Evidence of critical thinking; ability to apply principles to real-world business problems; ability to communicate clearly, fluently and appropriately with a non-academic audience.

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.


Baddeley M (2017), Behavioural Economics – A Very Short Introduction, Oxford University Press. Available as an Ebook.

Baddeley M (2011), Energy, Environment and Behaviour Change: A Survey of Insights from Behavioural Economics, Cambridge Working Papers in Economics,

OECD (2017), Tackling Environment Problems with the Help of Behavioural Insights,

Nolan JM and Schultz PW (2012), Prosocial Behavior and Environmental Action, Oxford Handbook of Prosocial Behavior, 626-652.

Shogren J (2012), Behavioural Economics and Environmental Incentives, OECD.