4 EFFICIENCY: Exploit human Behavior
THE CHALLENGE The greatest clean energy sources and efficient technologies are pointless if nobody wants to use them. Sometimes the resistance reflects a problem of engineering (for instance, the short range, high cost, and long charging time of electric cars). Often, though, the problem is one of perception. “Our default is the status quo, and we have a myopic focus on the here and now,” says Elke Weber, a psychological economist at Columbia University who studies why
people engage in risky environmental behavior. She argues that understanding consumer behavior needs to be at the heart of a meaningful energy policy.
THE NEW ENERGY ECONOMY Some of the most effective strategies to help consumers overcome aversion to change are very simple. Weber finds that merely offering the energy-efficient option as the default choice can greatly increase its acceptance. She examined the familiar lightbulb decision: Should I buy a compact fluorescent bulb (CFL) or go with the more familiar incandescent bulb that is cheaper but eats up more electricity? (An average incandescent bulb is $0.50 and will cost you $49 per 10,000 hours of use. Compact fluorescents may run you $3, but rack up an electricity cost of only $11 per 10,000 hours of use.)
In a survey, when Weber made incandescent bulbs the default option (in a newly renovated home, for instance), 44 percent of consumers said they would stay with the choice. But when CFLs were presented as the default option, 80 percent went with them instead. Consumers have registered some complaints about CFLs, but it seems that one of the most intense ones is the hassle of making a change.
New York University economist Hunt Allcott has demonstrated that competition can also spur people to make more efficient choices. He studied Opower, a company headquartered in Arlington, Virginia, that sends utility subscribers an energy “report card” comparing their energy usage with that of their neighbors.
Opower now includes these kinds of comparisons in the utility bills of 15 million households across the United States. Allcott’s analysis shows that customers who receive the notices become more conscious of energy use and consume an average of 2 percent less power than those who do not get the comparisons in the mail. There is no government mandate, no utility incentive, just a better kind of communication.
The letters are being used by some utilities to target heavy electricity users who may not be aware that they are wasting energy, and their own money.
Economist, New York University
Director, Nevada Bureau
of Mines and Geology
Executive director, Geothermal
Senior vice president, American
Wind Energy Association
Director, Engineering Research Center for Reinventing the Nation’s Urban Water Infrastructure at Stanford University
William Mahoney III
Deputy director, Research Applications Laboratory, National Center
for Atmospheric Research
General manager, Las Vegas
Valley Water District
Assistant director, NSF’s
Directorate of Engineering
Director, Advanced Research
Institute at Virginia Tech
Codirector, Center for Decision Sciences, Columbia University