Motivating Residential Energy Conservation

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During a long winter of conservative government, policy pressure inevitably builds up within the forces of progressive politics.  Denied for so long, there is a understandable desire to see things change quickly and mightily, setting the stage for disappointment.  The Labor Party was out of power for over a decade before the Rudd Government took office, and it could have taken the nation’s new minders a year simply to "find the keys" ⎯ thus the proliferation of commissions and reviews. On the subject of residential energy conservation, I won’t so much mark the Government’s scorecard as give a progress report – and a word of caution.

Under the recommendations of the Garnaut Climate Change Review, residential electricity prices are projected to rise by 21 to 31 per cent by 2020. The review recommends mitigation strategies for low-income households, but there is little discussion of helping Australians change their energy use behaviour to reduce consumption. If Australians can be assisted and motivated to reduce their household energy consumption, they may be able to mitigate the projected increase in their electricity bill, while contributing to the overall reduction of greenhouse gas emissions.

In the Rudd Government, the Environment and Climate Change portfolios were divided between Peter Garrett and Penny Wong, respectively, and residential energy conservation fell within Garrett’s arena. That may provide this less glamorous policy area with more attention than it would have received in Wong’s office, which is understandably focused on business and industry and the overall implementation and market impacts of the Emissions Trading Scheme (ETS).

Additionally, the target of residential energy conservation requires a particular approach.  We cannot expect individuals to react to changing environmental regulation, incentives, and costs as rationally or responsively as corporations, who have the knowledge and resources to conform to changing policy frameworks. Both the Garnaut Climate Change Review and the Government’s Carbon Pollution Reduction Scheme (CPRS) Green Paper  have noted information barriers, bounded rationality and split incentives as obstacles to the uptake of energy conservation by Australian households.  Some of the initiatives announced by the Government so far are designed to combat these market failures:

  • A 4-year scheme to improve the energy efficiency of appliances, including a new 10 star rating system, a greenhouse minimum standard, more products covered, and reducing standby power.
  • Green Loans scheme, providing a household sustainability assessment, a green renovations kit, and low interest Green Loans of up to $10,000.
  • Low-Emission Plan for Renters, providing a rebate of up to $500 for landlords to install energy-efficient insulation.
  • Your Home Renovators Guide, with information on making homes more environmentally friendly.
  • One Stop Green Shop, a single, government web portal designed to link schools, businesses and families to household efficiency programs provided by all levels of government.

This is a good beginning. However, international research has demonstrated other barriers to changing energy consumption behaviour, relating to the subtleties of human motivation. For example, research has shown that while people say they are motivated by concern for the environment and saving money, the greatest motivator for the take up of energy conservation is social diffusion (i.e., installing a solar hot water heater because your brother-in-law or your neighbour did).[1] This suggests that informational websites, living greener guides and public information campaigns (such as the Howard Government’s much maligned "Be Climate Clever" campaign, addressed by me here) do not sufficiently motivate changed behaviour. Residential energy conservation requires a more robust democratic approach, by selling programs in community and neighbourhood settings as much as possible.[2]

Lack of feedback is another important barrier to change. Australians generally receive quarterly energy bills or a monthly bill averaged out across the year.  This provides little to no direct feedback to people on how they are using energy and what it is costing them. Research from other countries has shown that providing an energy meter in the home (or for a particular appliance) that shows energy use and/or cost on a continuous basis causes most households to significantly reduce their energy use.[3] Demonstrating to people that they are consuming more energy than their neighbours also leads to a reduction in energy consumption (this is social diffusion at work again).[4] 

It is not yet possible, or fair, to give the Rudd Government or the Minister for the Environment a mark for residential energy conservation. Many of their initiatives are in development or in the process of being implemented and the time this is taking is not unreasonable. Looking to their proposals, it is best to say that they have many bright ideas, but that many similar ideas have failed in implementation. It is crucial for the Rudd Government to consider the many failures, and few successes, in residential energy conservation as they work through the specifics of the policy design; most importantly, that they take account of the complexities and subtleties of human motivation. 

Notes

[1] Nolan, J.M., Schultz, P.W., Cialdini, R.B., Goldstein, N.J. & Griskevicius, V. 2008, ‘Normative social influence is underdetected’, Personality and Social Psychology Bulletin, vol. 34, no. 7, pp. 913-923.
[2] Coltrane, S., Archer, D. & Aronson, E. 1986, ‘The social-psychological foundations of successful energy conservation programmes’, Energy Policy, vol. 14, no. 2, pp. 133-148.
[3] Wood, G. & Newborough, M. 2003, ‘Dynamic energy-consumption indicators for domestic appliances: environment, behaviour and design’, Energy and Buildings, vol. 35, no. 8, pp. 821-841; Wood, G. & Newborough, M. 2006, ‘Energy-use information transfer for intelligent homes: enabling energy conservation with central and local displays’, Energy and Buildings, vol. 39, no. 4, pp. 821-841.
[4] Schultz, P.W., Nolan, J.N., Cialdini, R.B., Goldstein, N.J. & Griskevicius, V. 2007, ‘The constructive, destructive, and reconstructive power of social norms’, Psychological Science, vol. 18, no. 5, pp. 429-434.

 

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