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Nudging for Energy Consumption
- 1. Dias 1 The Ethics of Nudging for Sustainable Energy Consumption T.J. Kasperbauer, 6/30/2016 University of Copenhagen
- 2. Main Objections to Nudging 1. Paternalistic 2. Reduce autonomy and agency Less convincing in the case of energy consumption
- 3. Why not? 1. Infrastructure outside of individual control 2. Fewer choices with energy consumption Massively Architectured
- 4. Why not? 1. Infrastructure outside of individual control 2. Fewer choices with energy consumption 3. Energy consumption strongly influenced by external factors 4. Consistent with consumption preferences
- 5. Sustainable Energy Consumption • Shift in sources - E.g., wind and solar instead of oil and coal. • Reduction in consumption
- 7. Nudges • Participants asked to imagine that they had moved to another town. Choice between renewable energy sources and a cheaper non-renewable. • People go with the default, even if alternative is cheaper. Pichert D, Katsikopoulos KV (2008) Green defaults: information presentation and pro-environmental behaviour. Journal of Environmental Psychology, 28, 63–73.
- 8. Nudges
- 12. Renewable electricity generation (EIA 2015 Energy Outlook)
- 13. Possible scenarios 2013-2040 (EIA 2015 Energy Outlook)
- 14. EU renewable electricity generation (EU 2015 Energy Union)
- 15. 2. Narrow Infrastructure • Consumers have little control over energy source - Zero choice of source in 33 American states - Little difference between providers - Usually limited choices (e.g., percentage solar or wind)
- 17. 2. Narrow Infrastructure • Consumers have little control over energy source - Zero choice of source in 33 American states - Little difference between providers - Usually limited choices (e.g., percentage solar or wind) • Buildings and appliances consume about a third of energy.
- 18. 3. Situational factors • Social norms more effective than information about consumption or energy-efficiency • Also more effective than reminding people of pro- environmental values
- 19. 3. Situational factors Allcott, H., & Rogers, T. (2014). The short-run and long-run effects of behavioral interventions: Experimental evidence from energy conservation. American Economic Review, 104, 3003-37.
- 20. Bollinger, B. & Gillingham, K. (2012). Peer effects in the diffusion of solar photovoltaic panels. Marketing Science, 31, 900–912.
- 22. 4. Energy preferences • Greendex (2014): Sustainable consumption on the rise globally. • 75-78% of Americans believe benefits of solar and wind outweigh their risks (Harris poll, April 2015). 34% for coal. • 66% of Americans plan to take steps to improve the energy efficiency of their homes (HomeServe 2016) • 50-90% in U.S. and Europe willing to pay more for “green” energy (Pichert & Katsikopoulos 2008)
- 23. • Opt-in reduces participation in the Smart Grid program (Toft, Schuitema, & Thøgerson 2014) - Opt-out same level of participation as free choice
- 24. EU public support for R&D (EU 2015 Energy Union)
- 25. Nudging “tries to influence choices in a way that will make choosers better off, as judged by themselves.” Thaler and Sunstein, Nudge
- 26. Conclusions • Yes, nudges are paternalistic. So are alternatives. - This is how massive architecture works • No, energy nudges do not reduce autonomy and agency. Might increase!
Editor's Notes
- In short, these objections claim that nudges inappropriately interfere with people’s decisions, in a way that reduces people’s ability to live their lives the way they want to live them. paternalism is particularly problematic when it is difficult to detect. Hausman and Welch (2010) argue that manipulation by nudging is totally different from rational persuasion or appealing to reasons, “To the extent that they are attempts to undermine that individual’s control over her own deliberation, as well as her ability to assess for herself her alternatives, they are prima facie as threatening to liberty, broadly understood, as is overt coercion” the degree of involvement in people’s personal lives required by nudging is relatively new in human history. Because nudges are intentionally directed at unconscious processes by government entities, they introduce new ethical problems. Maybe also the fragmented self
- Coal, natural gas, and oil all still increasing Don’t want a reduction in quality The State of Consumption Today. State of the World 2011. Retrieved from http://www.worldwatch.org/node/810 The United States, with less than 5 % of the global population, uses about a quarter of the world’s fossil fuel resources—burning up nearly 25 % of the coal, 26 % of the oil, and 27 % of the world’s natural gas. Making Better Energy Choices. State of the World 2004. Retrieved from http://www.worldwatch.org/node/808 Between 1850 and 1970, the number of people living on Earth more than tripled—yet the energy they consumed rose 12-fold. By 2002, human numbers had grown another 68 percent and fossil fuel consumption was up another 73 percent.
- Mention that Cass Sunstein is all over this
- Allcott, H. & Mullainathan, S. (2010). Behavior and energy policy. Science, 327, 1204-1205. - Behavioral nudges have higher returns than traditional price/technology based approaches to induce energy efficiency and conservation. - nudges can affect behavior as much as price changes. might also be more cost effective - combination of descriptive norms and energy conservation tips has the potential to reduce electricity consumption by over 2 %. McKinsey & Company (2009). Unlocking energy efficiency in the U.S. economy. Retrieved from www.mckinsey.com/client.../204463A4D27A419BA8D05A6C280A97DC.ashx -23% reduction in energy consumption are achievable nationwide by 2020
- Washington Post’s remake of the EPA’s map of the three main electrical grids in North America. Investments in U.S. electricity infrastructure began in the early 1900s and were driven by the increased use of new transmission technology, by central station generating plants, and by growing electricity demand following World War II. UK national grid was built in 1926. Built to last. Grid in Europe standardized to 50 Hz a long time ago, while U.S. uses 60 Hz.
- The 3 grids are broken into 9 jurisdictions, supervised by the North American Electric Reliability Corporation
- Electricity Market Module Regions. Control of pricing, flow, dispatch, planning. Can be exchanged between regions, but limited. https://www.eia.gov/forecasts/aeo/assumptions/pdf/electricity.pdf
- http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf
- Annual Energy Outlook 2015. U.S. Energy Information Administration (EIA). Retrieved from http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf Between 2013 and 2040, renewable energy production will increase from 13% to 18% of total energy. Renewables are driven by two main factors they claim. Federal tax credits and state renewable portfolio standards that do not expire Rate of growth in electricity sales and usage has decreased from 9.8% in 1950 to .5% now. Causes are slower population growth, market saturation of electronic appliances, improvements in energy efficiency,
- European Commission (18-11-2015). Monitoring progress towards the Energy Union objectives - Concept and first analysis of key indicators. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015SC0243&from=EN -in 2013, 15% of gross final energy consumption in the EU came from renewables. It is increasing. Overall energy consumption is decreasing, and some countries are significantly increasing their renewables. - In 2013, more than 25% of electricity was generated from renewable energy sources, a more than 10 percentage point increase since 2005. All Member States have seen the share of RES in electricity increase since 2005, ranging from 1 percentage point to more than 20 percentage points. They attribute this increase to investment in non-fossil fuels and getting more out of those (particularly wind).
- Note that comprehensive studies are hard to find on consumer choice. Worldwide, people use about a third of all energy in buildings—for heating, cooling, cooking, lighting, and running appliances.
- Note that comprehensive studies are hard to find on consumer choice. Worldwide, people use about a third of all energy in buildings—for heating, cooling, cooking, lighting, and running appliances.
- Allcott and Rogers 2014 effects of Opower
- Bollinger, B. & Gillingham, K. (2012) Peer effects in the diffusion of solar photovoltaic panels. Marketing Science, 31, 900–912. -Many current studies built off of Bollinger and Gillingham, who used a large dataset of PV system adoptions in California to show that one additional previous installation in a zip code increases the probability of a new adoption in that zip code by 0.78% Graziano, M. & Gillingham, K. (2014). Spatial patterns of solar photovoltaic system adoption: the influence of neighbors and the built environment. Journal of Economic Geography, 16, 815-839. -Connecticut households. If within .5 miles of other adopting household, much more likely. -contrary to other studies, they found that the effect persisted after 1 or 1.2 km (though it is strongest at the street level than zip code level).
- Also mention that best predictors of energy consumption are household size and income. From Abrahamse W, Steg L. (2011). Factors related to household energy use and intention to reduce it: the role of psychological and socio-demographic variables. Human Ecology Review, 18, 30–40.
- Kaenzig J et al (2013) Whatever the customer wants, the customer gets? Exploring the gap between consumer preferences and default electricity products in Germany. Energy Policy 53:311 414 German costumers are willing to pay a significant price premium for an upgrade from the current default electricity mix in Germany to a more environmentally friendly electricity mix. Toft, M. B., Schuitema, G., & Thøgerson, J. (2014). The Importance of Framing for Consumer Acceptance of the Smart Grid: A Comparative Study of Denmark, Norway and Switzerland. Energy Research and Social Science, 3, 113-123.
- European Commission (18-11-2015). Monitoring progress towards the Energy Union objectives - Concept and first analysis of key indicators. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015SC0243&from=EN -not a whole lot of publicly funded research into renewables. Perhaps this reflects public support, not clear. Nuclear is high. Renewables increased between 2005 and 2013 from 19% to 25% of research on energy. Similar rate as U.S. actually.