An edited version of a memo I recently wrote to someone in the Obama administration:
In the next 20 years we face limited options in reducing our energy use by significantly transforming energy output. Even with the knowledge we have in hand today, significantly reducing the percentage of coal and natural gas will take many decades especially in the light of the projected rise in energy demand. Meanwhile, carbon capture and sequestration has no chance of reaching significant deployment in the near term. As such, in the near term promoting energy efficiency and conservation is not just our best hope but one of our few hopes! That said, how important is the role of the individual citizen in such an effort?
Here I will argue that while changing individual behavior is of value; it is going to be an uphill battle and there are things we can learn from other fields before proceeding. What is more important I will argue, is to change individual attitudes toward the need for collective action of us all as a nation.
The Limits on Behavioral Change: When it comes to energy conservation and efficiency, individual behavior falls into two groups – one off actions, like buying a more efficient appliance and repeated actions, like turning off lights. In both areas, findings of psychology and behavioral economics highlight the significant challenge to promoting such change: i. Significant inelasticity of demand for energy means that price driven change requires large rises in markets that are regulated “for the public good” and subject to political constraints. ii. Even where price begets change at the outset, inurnment to the change overtime combines with habit to reassert old behavior. iii. The overvaluation of money in hand today over savings in the future, forces subsidies to promote energy efficiency upgrades that are extremely costly when done at scale. These are not “killer” objections, but they imply the need to proceed with great care in understanding the range and persistence of conservation efforts that rely in the individual actor acting in isolation.
Alternatives: The problems just alluded to arise from the role of the individual choice in the causal chain that aims to increase efficiency and conservation. But three alternatives sidestep these problems: i. The imposition of universal “upstream” appliance standards. (The most salient success of which has been in the area of home refrigerators.) ii. Exploiting the design environment to bring about changes in behavior subconsciously. (For example, the mere placement of a light switch.) iii. Using elements of smart grids and information networks that can communicate directly with and control (thermostats, appliances etc) in the home environment. But such alternatives, if widely implemented still implicate the individual citizen since they will be hard to defend without citizen acquiescence. Now instead of asking consumer to choose efficient appliances over (upfront) cheaper inefficient ones, we are asking them to acquiesce to their government banning sale of the latter. And instead of asking consumers to turn down air conditioners during peak demand, we might be asking them to cede control to their utility provider.
The Upshot: Winning such acquiescence involves a renegotiation of the social contract. It involves winning citizen support for policies that (in effect) will limit choices that may be preferred in the short run. This is more than “nudging” (a la Sunstein). This is not easy to do. But it is not without precedent. Anti-smoking efforts, seat belt campaigns and above all, social security all involved not just a nudge but the creation of national consensus about the need for us to invite regulation for our own good. The development of an effective climate policy is not simply a technical challenge of science but also a challenge of how to involve the citizens with a sense of ownership over the choices we face.
Recommendations: in the light of these considerations , I would urge:
1. Careful examination of the effectiveness of individual behavioral change programs.
2. Greater use of upstream appliance standards.
3. Use of the design environment to produce energy efficiency and conservation.
4. Mechanisms that directly control the home environment without consumer actions.
5. But above all, an examination of the broader issue of how one can win support of evolving national policy.