Behave Yourself!

by Richard T. Stuebi

It’s axiomatic among the cleantech community that energy efficiency represents the cheapest/easiest way to address our energy and environmental challenges. Indeed, as illustrated by some analysis by McKinsey & Company, many energy efficiency measures actually have net negative costs to implement.

So, why is it so damned hard for customers to adopt energy efficiency technologies? Consider the recent article from the Wall Street Journal, profiling the challenges faced in Boulder, Colorado — one of the most environmentally-inclined communities in North America — in encouraging energy efficiency measures. The WSJ article spurred some navel-gazing among the green-conscious Boulder citizenry, as witnessed in this blog post.

One way of looking at this issue is that it is indeed hard to change people’s habits and behaviors, but that eventually people do change. Another way of looking at this issue is that people are economic animals: they do make changes, pretty quickly, like it or not, when something hits their wallets and pocketbooks.

In other words, it’s really pushing water uphill trying to encourage a shift to using less energy, when energy is so bloody cheap for most people. Unless/until energy becomes more expensive (taxes anyone?), the only way to spur many customers to use less energy is to change codes such that inefficient devices — whether they be lightbulbs, refrigerators, air conditioners, TVs or computers — can no longer be bought.

In the absence of price signals that strongly encourage behaviors to reduce energy consumption, restricting what customers can buy is the only brute-force method available that really works. And, as can be seen in our current political environment, many Americans don’t like being strong-armed by their government.

Richard T. Stuebi is a founding principal of the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

1 reply
  1. Jane Hummer
    Jane Hummer says:

    I disagree that price signals or government mandates are the only way to change behavior. In fact, I think the past 30 years of utility energy efficiency programs have demonstrated quite strongly that financial incentives are ineffective in making people make energy-efficient choices in their homes (choices that are clearly in their financial interest, i.e., no-cost or low-cost/quick payback measures). Social incentives, on the other hand, have been demonstrated to achieve very cost-effective energy savings through changes in habitual and purchasing behaviors, as well as increasing public support for policies that promote efficiency and renewables. Programs that incorporate an understanding of the social and psychological contexts of energy usage have far more success than ones that are still stuck in the "rational economic actor" mindset. Check out my recent article on the topic: http://www.environmentalleader.com/2010/03/22/using-social-marketing-to-promote-energy-efficiency-and-conservation/.

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