Behavioral economics, including prospect theory, offers new approaches to environmental policy analysis. The utility of behavioral approaches to environmental policy analysis is illustrated using a case study of offshore wind energy policy in Michigan, USA. Michigan has attempted to clarify the permitting process for offshore wind energy but those efforts have failed. Prospect theory suggests that Michigan legislators are, for the most part, risk averse to policy reforms as the state emerges from its “one-state recession” and into a gains domain. Legislators from some coastal districts perceive offshore wind development as a threat to coastal quality of life, are risk-seeking for policy reforms, and have introduced bills banning offshore wind energy. Framing the discussion from a loss perspective (losing out to competing states) may be an effective strategy for passing offshore wind policy reforms. Results suggest behavioral approaches have utility for other environmental policy challenges, such as climate change.