What are the underlying challenges that create the climate impasse? This chapter explains why compensation and investments that are supposed to facilitate a clean energy transition face credibility challenges. These challenges arise from various sources, such as today’s government cannot perfectly control what tomorrow’s government does, and uncertainty about whether the government represents the interests of people and communities impacted by policy reforms. Finally, we argue that new industries might be seen as providing few local economic benefits. In light of these challenges, we propose solutions to create credibility and build support for the energy transition.

This chapter discusses the role of nudge interventions, which are interventions that modify the choice architecture without intervening in the actual choice set. We use nudges when we make subtle changes to the way choices are presented to individuals (the choice architecture). Such small changes are expected to encourage predictable behaviour and assist individuals in achieving goals that they desire. In general, it refers to interventions that, while preserving individuals' freedom of choice, steer them in a specific (socially desirable) direction, thereby improving welfare by assisting individuals in achieving welfare-improving goals (as judged by themselves). Individuals can continue to make whatever choices they want; they can always opt out of a default environment that steers them. Nudges preserve choice and can have a significant impact on our behaviour. They are appealing because they influence behaviour without using regulation or monetary incentives, and they are relatively inexpensive interventions. This chapter attempts to provide an overview of how to change the choice architecture by utilizing well-established cognitive biases discussed in this book.

Can self-control be improved through daily practice or better technique? In this chapter, I show that the popular idea that self-control is “like a muscle” that can be strengthened through exercise is not supported by recent research. Teaching people “self-control techniques” is no solution either, as it may even widen the gap between those who are good at self-control and those who are not. How about new techniques such as “commitment devices” and “nudging”? Unfortunately, although some nudges seem promising, they cover only a small subset of the situations that call for good self-control. The conclusion of this chapter is that “some people simply have more talent for self-control than others, and therefore some people will have better prospects at achieving health, wealth, and happiness than others. We may have no choice but to accept this reality.”