Importance of Natural Resources

Can peer pressure be harnessed to fight climate change?

JUDY WOODRUFF: How people vote in an election
certainly can be affected by peers, friends, family and neighbors. That’s also true with some of our economic
choices and what we buy. Tonight, economics correspondent Paul Solman
explores how those forces could potentially be marshaled for other constructive purposes. It’s part of our regular series, Making Sense. NARRATOR: The man in the middle is the hidden
camera subject. He has just arrived from unemployment agency. PAUL SOLMAN: Fifty years ago, Allen Funt made
an X-rated film — OK, tame by today’s standards — using the hidden camera technique pioneered
on his TV show “Candid Camera.” MAN (singing): What do you say to a naked
lady? PAUL SOLMAN: In this bit, an unsuspecting
job applicant arrives for an interview. Fellow applicants in the waiting room, Funt’s undercover
confederates, start disrobing. Sure enough… Economist Robert H. Frank calls this peer
pressure -like phenomenon behavioral contagion. But it doesn’t just lead to humiliation or
explain the bad outcomes of mob behavior. In fact, he thinks, behavioral contagion could
be a key to solving our most pressing problems, even climate change. ROBERT H. FRANK, Economist, Cornell University:
Shifts in public opinion occur very rapidly, very unpredictably. And it’s because what
I think about something depends on what people around me think about it. PAUL SOLMAN: Consider same-sex marriage, says
Frank. Twenty years ago, just one out of 10 Americans supported it. Today, a solid two-thirds
majority is in favor. Frank’s new book, “Under the Influence: Putting
Peer Pressure to Work,” argues that behavioral contagion can be a force for environmental
good. It’s an about-face, seeing as how he’s been
writing for decades about how keeping up with or ahead of the Joneses has been an economic
plague. “Luxury Fever,” published in 1999, explained a decade in which house sizes doubled
compared to homes in the 1950s. SUV sales quadrupled. ROBERT H. FRANK: The reason we buy such heavy
cars, the reason we build such big houses is that other people like us have begun doing
that. PAUL SOLMAN: Even tiny Trumansburg, New York,
near Cornell University, where Frank teaches, has its share of McMansions. LINDSAY HART, Hart and Homes Realty: That
was built in 2007. It is approximately 4,200 square feet. PAUL SOLMAN: Par for the course, says realtor
Lindsay Hart. LINDSAY HART: That’s what people want. PAUL SOLMAN: And why did they want it? ROBERT H. FRANK: The people at the top led
this charge. And they did what people do in every stratum. They build bigger when they
have more money. LINDSAY HART: And as these bigger homes were
being built, I think that pushed up the standard for the average square footage of a home and
what people want. ROBERT H. FRANK: So, the norm just shifted
upwards. PAUL SOLMAN: Luxury fever, financially dicey,
environmentally damaging, as bigger houses and vehicles absorb more resources to build,
more energy to run. But looks, says Bob Frank, since we’re hard-wired
to take our cues from others, why not put behavioral contagion to good use? And we can,
he says. ROBERT H. FRANK: The contagion works in both
directions. The rise in SUV ownership was explosive. Some bought them. Others felt compelled
to do likewise. When some abandon them, the decline in SUV ownership will be just as explosive. LINDSAY HART: The trend is now smaller homes. PAUL SOLMAN: In the same local development
where McMansions once bloomed, however, the latest model is half the size, reflecting
a nationwide trend. Is it chic to own a smaller home now? LINDSAY HART: It’s definitely not seen as
a negative. So, I guess — sure, I guess chic would be a good word for it. ROBERT H. FRANK: That’s right. It costs much
less to heat a small home than a big one. But the more important effect is the influence
that they have on others. PAUL SOLMAN: Consider those solar panels,
says Frank. ROBERT H. FRANK: I see my neighbor put on
a solar panel on his roof. Well, maybe he knows something I don’t know. And before you
know it, there’s a nucleus in our neighborhood. We have all got solar panels. PAUL SOLMAN: Well, not exactly. Bob Frank
wanted to put solar panels on his roof, but the house didn’t get enough sun. There was, however, an alternative: buying
panels in a solar farm, an array that doesn’t power his house directly, but feeds electricity
into the local grid. ROBERT H. FRANK: I don’t think I want to call
myself a solar power magnate, but I own a share of it. (LAUGHTER) JOE SLIKER, President and CEO, Renovus Energy:
This is a map of most of the installations we have done. PAUL SOLMAN: Joe Sliker runs Renovus, a solar
energy firm in Ithaca that counts Bob Frank as a customer. This is Ithaca here. JOE SLIKER: Yes, this is Ithaca in the center
area. PAUL SOLMAN: The point is, when you zoom into
downtown: JOE SLIKER: You have got one, two, three,
four, five, six different customers just within that two-block area. PAUL SOLMAN: And outside of town, peer pressure
also seems to work. JOE SLIKER: Five all within about three blocks
of each other. PAUL SOLMAN: And even in the woods. JOE SLIKER: There’s one customer that could
have solar on Hinging Post Road, and that’s where it started.
And then the neighbors all tried to get it, and couldn’t. PAUL SOLMAN: Because it’s too shaded? JOE SLIKER: It’s too shaded, yes. But these
customers have all put their panels on solar farms instead. PAUL SOLMAN: Do the neighbors brag to each
other? JOE SLIKER: Yes. Oh, it’s a keeping up with
the Joneses thing, for sure. PAUL SOLMAN: Keeping up with their economizing,
too, another aspect of peer pressure. JOE SLIKER: The cost of solar in the last
seven years has dropped by about 80 percent. At this point, solar is the cheapest form
of electricity that you can get. PAUL SOLMAN: Of course, all this depends on
having enough peers. KEVIN BACON, Actor: The six degrees of Kevin
Bacon. PAUL SOLMAN: Enter Kevin Bacon. KEVIN BACON: The idea is that any actor, alive
or dead, can be connected to me through our work in six steps or less. And I’m going to
give you an example. Rudolph Valentino in 1922 was in “Beyond the
Rocks” with Gertrude Astor, who did “Daddy Long Legs” in 1955 with James Cromwell, who
was in “Beyond All Boundaries” in 2009 with me. That gives Rudolph Valentino a Bacon number
of three. ROBERT H. FRANK: The fact that we are vastly
more closely connected to one another than anyone ever imagined really is the heart of
why we influence one another so strongly. PAUL SOLMAN: So, then, buying smaller cars
or houses, putting up solar panels, will behavioral contagion alone save us? Don’t we need policy
as well to rescue the Earth? ROBERT H. FRANK: Yes, we should charge people
for discharging CO2 into the atmosphere, just as economists have said forever. What’s new in the story is that the effect
of doing that will be vastly bigger than anyone imagines. That’s a whole area that’s ripe
for progress in economics. PAUL SOLMAN: And it’s happening. Increasingly, electric bills show how your
usage compares to the neighbors. And in a case of corporate contagion, Amazon, Google,
Microsoft, and Starbucks have all recently made big pledges to cut their carbon emissions. One last question, though. If Bob Frank’s
own roof is panel-free, how can he be the pro-social Typhoid Mary who positively infects
his neighbors? Turns out he just had to do what he learned from this story, put up a
sign that he’s gone solar too, with panels down on the farm, even more cost-efficient
there, by the way, than on his house. For the “PBS NewsHour,” correspondent Paul
Solman from in and around Ithaca, New York.

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