Report: Invest in behavior change, not just technology

Nobody disputes that spending on research and development of marketable high-efficiency lighting or heating systems is important in the quest to increase energy efficiency on a broad scale. Why isn’t there similar unanimity about the need to invest in programs that change behavior within the energy system? You know, turning off lights and turning down thermostats. The low-tech stuff.

A new report called “Behavior and Energy Policy” makes a pretty strong case that the science of  behavioral economics should enjoy a stature similar to that of the so-called hard sciences that produce useful technological innovations. (There’s a great post about the report by David Roberts over at Grist.)

In the report, economists Hunt Allcott of MIT and Sendhil Mullainathan of Harvard argue for increased emphasis on behavior change for a couple of main reasons. First, people aren’t rational; the knowledge that programming the thermostat will save them $50 a month–a very rational choice–often isn’t enough to make it happen. Second, using behavior change to save energy looks to a serious economic winner.

Roberts, in the Grist post, uses the example of utility bills that compare an individual’s energy consumption with that of neighbors–efficient and plain average. He notes that this nearly-no-cost investment by the utility prompts energy savings of nearly 2 percent. It turns out that the rational argument about saving money isn’t as effective for many as the notion that they might be falling behind the Joneses down the street.

Using the language of climate change, Roberts also highlights the authors’ economic argument:

Start with the most basic test: how much does it cost for a given climate solution to eliminate (abate) a metric ton of CO2 emissions? With plug-in hybrid vehicles, that ton costs around $12. With wind power, it’s $20. With carbon capture and storage at coal-fired power plants, it’s $44.

How much does that same ton of CO2 abatement cost using these behavioral programs? -$165. No, that’s not a typo. It’s a negative sign. As in: $165 worth of profit per ton of carbon pollution reduced. If similar programs were expanded nationwide, Allcott and Mullainathan estimate a net value — savings minus costs — of $2,220,000,000 a year. Of course much research and testing remains to be done before it’s clear whether these programs perform equally well at scale, but as a first approximation, that’s not too shabby.

Incidentally, we here at Efficiency Works! make the case for many of these behavioral motivations in our “Solving the Energy Efficiency Puzzle: Achieving Bigger Savings in the Pacific Northwest.”

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