Perverse incentive: Difference between revisions

* In 2002 British officials in Afghanistan offered Afghan poppy farmers $700 an acre in return for destroying their poppy crops. This ignited a poppy-growing frenzy among Afghan farmers who sought to plant as many poppies as they could in order to collect payouts from the cash-for-poppies program. Some farmers harvested the sap before destroying the plants, getting paid twice for the same crop.<ref>{{Cite book|url=https://books.google.com/books?id=FbYYEAAAQBAJ&q=editions:Wo0s0FwTubkC|title=The Afghanistan Papers: A Secret History of the War |page=136|isbn=978-1982159023 |last1=Whitlock |first1=Craig |year=2021 }} </ref>

* [[Renewable Heat Incentive scandal]]{{snd}} (commonly referred to as the ''Cash for Ash'' scandal) Introduced by the [[Devolution|devolved]] government in [[Northern Ireland]], the [[Renewable Heat Incentive]] (RHI) was a 20-year scheme intended to encourage businesses to reduce energy usage and promote switching to [[Environmentally friendly|green]] sources. However, the subsidy for the renewable energy was greater than its cost, which allowed businesses to make a profit by switching to green sources and then increasing their energy use rather than reducing it. In some cases, an income was obtained simply by heating empty buildings. The political fall-out caused the [[Northern Ireland Executive]] to collapse in 2017. It was not re-convened until 2020.<ref>{{cite news|date=23 December 2016|title=RHI scandal: RHI 'cash for ash' scandal to cost NI taxpayers £490m|work=[[BBC News]]|url=https://www.bbc.com/news/uk-northern-ireland-38414486}}</ref><ref>{{cite news |date=16 January 2017 |title=Stormont crisis: Deadline passes for future of executive |work=BBC |publisher=BBC News |url=https://www.bbc.co.uk/news/uk-northern-ireland-38630403}}</ref>

* Experiencing an issue with [[feral pig]]s, the [[United States Army|U.S. Army]] post of [[Fort Benning]] in [[Georgia (U.S. state)|Georgia]] offered hunters a $40-bounty for every pigtail turned in. Predictably, however, people began to buy pigtails from butchers and slaughterhouses at [[wholesale price]]s then resold the tails to the Army at the higher bounty price.<ref name=":02" />{{bcn|date=March 2021}}

* In 2005 the UN [[Intergovernmental Panel on Climate Change]] began an incentive scheme to cut down on greenhouse gases. Companies disposing of polluting gases were rewarded with [[carbon credits]], which could eventually get converted into cash. The program set prices according to how serious the damage the pollutant could do to the environment was and attributed one of the highest bounties for destroying [[HFC-23]], a byproduct of a common coolant, [[HCFC-22]]. As a result, companies began to produce more of this coolant in order to destroy more of the byproduct waste gas, and collect millions of dollars in credits.<ref>{{Cite web |title=The Cobra Effect |url=http://freakonomics.com/2012/10/11/the-cobra-effect-full-transcript/ |url-status=dead |archive-url=https://web.archive.org/web/20121018225311/http://freakonomics.com/2012/10/11/the-cobra-effect-full-transcript/ |archive-date=2023-01-13 |website=Freakonomics}}</ref> This increased production also caused the price of the refrigerant to decrease significantly, motivating refrigeration companies to continue using it, despite the adverse environmental effects.<ref>{{cite news|last1=Rosenthal|first1=Elisabeth|last2=Lehren|first2=Andrew W.|date=2012-08-08|title=Incentive to Slow Climate Change Drives Output of Harmful Gases|newspaper=The New York Times|url=https://www.nytimes.com/2012/08/09/world/asia/incentive-to-slow-climate-change-drives-output-of-harmful-gases.html|access-date=2015-07-02|issn=0362-4331}}</ref><ref>{{cite web|last=Gupta|first=Anika|title=Carbon credit scam slur on Indian firms|url=http://www.hindustantimes.com/newdelhi/carbon-credit-scam-slur-on-indian-firms/article1-599382.aspx|archive-url=https://web.archive.org/web/20150704055413/http://www.hindustantimes.com/newdelhi/carbon-credit-scam-slur-on-indian-firms/article1-599382.aspx|url-status=dead|archive-date=4 July 2015|access-date=2015-07-02|website=Hindustan Times}}</ref> In 2013, credits for the destruction of HFC-23 were suspended in the [[European Union]].<ref>{{cite web|date=23 November 2016|title=Commission adopts ban on the use of industrial gas credits|url=https://ec.europa.eu/clima/news/articles/news_2011060801_en|accessdate=3 November 2019|website=Climate Action |publisher=[[European Commission]]}}</ref>