Tamar Makov, George E. Newman, and Gal Zauberman

(Working paper)

Environmental Inequality and Allocation Preferences for Necessary Evils

While inequality has been at the center of public discussions and academic research, much of it has been about economic contexts. However, environmental inequalities (e.g., differences in water quality or air pollution levels between communities), are as common and consequential as economic ones. Environmental inequality can be created and remedied through allocations of both ‘harms’ (e.g., polluting industrial facilities) and ‘benefits’ (e.g. pollution control technologies). Across multiple studies, we demonstrate that despite well-established preferences toward equality, people are significantly less likely reduce environmental inequalities when distributing harms compared to distributing benefits. In addition, people show less confidence when allocating harms (vs. benefits) and are reluctant to do so. These different allocation preferences across harms vs. benefits cannot be explained by harm aversion alone. Rather, we suggest that they are a result of an incompatibility between harms, which are seen as inherently unfair actions, and equality, which is a basic fairness principle. This work has both theoretical and practical implications. Since objective environmental conditions (i.e., water pollution levels) are typically shaped through the distribution of harms, our findings suggest that a basic unwillingness to use harms to increase equality between communities might contribute to the prevalence of environmental inequality.

Many organizations seek to align their financial goals with environmental ones by identifying strategies that maximize profits while minimizing environmental impacts. Examples of this ‘win-win’ approach can be found across a wide range of industries, from encouraging the reuse of hotel towels, to the construction of energy efficient buildings. Although win-win strategies are generally thought to reflect positively on the organizations that employ them, here we find that people tend to respond negatively to the notion of profiting from environmental initiatives. In fact, observers may evaluate environmental win-wins less favorably than profit-seeking strategies that have no environmental benefits.

We suggest that the negative response to environmental win-wins results from a fundamental psychological divide between social relationships that are perceived as communally-oriented versus those that are perceived as market-oriented (hereafter, ‘communal’ and ‘market’). Previous research has demonstrated that communal versus market relationships invoke fundamentally different norms for behavior. Specifically, when a communal relationship is established, profits can “taint” the positive value associated with pro-social behavior because they violate the norm that one should give without receiving something in return. In market contexts, however, this norm is not present and thus it may be perfectly acceptable, and perhaps even expected, to profit from one’s actions.

Here we examine the distinction between communal and market norms in the context of environmental win-wins. In a series of experiments, we document a negative reaction to initiatives that result in both environmental and financial gains. We further identify important boundary conditions of this phenomenon and suggest ways in which organizations undertaking sustainability initiatives can avoid potential backlash.

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