This post is largely influenced by John Gowdy’s paper on this topic. Classical economics has modeled self-interest and greed. We do not dare question Adam’s Smith’s invisible hand. Any deviancy from this behavior was considered irrational. But, the last couple of decades have been an eye opener and it has been brought about the bridging disciplines of game theory, neuroscience and traditional economics.
My assumption (and that of many others) is that people are hard wired for compassion and some goodness.
When looking at a macro scale, to solve common good issues like environment and climate change, we need to be able to appeal to, what I naively call this goodness facto(X) in humans. Classical economists would run to a better incentive design involving monetary rewards and punishments to go about achieving this. There are probably two reasons why this would not work. First, studies show that money has a negative priming effect. The very thought of money makes people less helpful and selfish. In fact, money acts detrimental in making people do good deeds.
Unfortunately behavioral economics is still at an experimental stage. Its effects have to reflect in the technology and policy making. It was heartening to see the Green button App contest that is on currently. It is to incentivize people to behave in a conservative manner. The solution to environmental problems may be technological, but it needs to be complemented by good behavioral studies to address this problem at the deepest level.