Private Environmental Nudges

A few years ago, before the onset of a global pandemic, I noticed that my preferred Portland, ME coffee shop—Tandem Coffee Roasters—implemented a new policy. Upon ordering a beverage, the barista asked if I brought my own mug. They informed me that, if had I not, I could purchase a paper, disposable vessel from the shop for twenty-five cents. Some might (understandably) ask, “Does coffee not come in a cup anymore?” The shop implemented what this paper dubs a “private environmental nudge,” a subset of policies that define private environmental governance (PEG)—the actions taken by nongovernmental entities to achieve traditional governmental ends regarding environmental protection.

This subset of PEG, pioneered by small businesses, relies on insights from behavioral economics, particularly Richard Thaler and Cass Sunstein’s famous theory of “nudges.” In my coffee example, the economics for the business are identical to the more common nominal discount for bringing a reusable cup; the only difference is in choice architecture. This paper includes a brief empirical case study of this emblematic example. It fills two gaps in the PEG literature with respect to small businesses and behaviorally informed policies. It further provides a typology of private environmental nudges, describing four archetypes, which will inform and guide future studies.