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The rational reasons that drive energy efficiency

Updated Wednesday 15th September 2010

Charlie Wilson discusses the emotional, aesthetic and social motivations that encourage homeowners to install energy efficient measures

The impact of behavioural patterns on climate change

Charlie Wilson is Lecturer in Energy and Climate Change at the Tyndall Centre, University of East Anglia. Here he introduces his research into how we interact with technologies, our behavioural patterns and the decisions we make, and the consequences for the environment.


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My research interests and also my teaching interests are, the way I describe is where energy meets technology meets behaviour.  So it’s this idea of how we do as people in societies interact with technologies through our behavioural patterns, through the decisions that we make, and then what consequences does that have for the environment.  In a climate change context, this is crucial both for adaptation and mitigation.  So how do we adapt to climate change and how do we try to reduce greenhouse gas emissions to try and reduce the magnitude of climate change? 

So one area in which this question of behaviour and energy technologies is I think quite interesting is in the field of energy efficiency.  So endless, endless studies tell us that there are numerous effective and low cost measures or technologies that we can adopt which will help reduce our energy consumption and reduce our greenhouse gas emissions; a big example, energy efficiency, energy efficient technologies in the home.  So this is really dull stuff, this in insulating your heating system, insulating your walls and your loft, installing energy efficient light bulbs, buying energy efficient appliances, sealing the holes around windows, all this kind of stuffy, very unsexy. 

So the prevailing understanding about how and why people do this kind of thing is what you might think of as broadly rational.  So what that means is, and policymakers assume this in terms of the policies that they use to try and encourage this behaviour, so they assume that we are motivated by money.  They assume that we are motivated by our values and our values, the relevant values in this sense are environmental values and so on, and they assume we’re motivated by kind of functional considerations.  So we might want to make our home more comfortable or less draughty and these kinds of things.  So this is a kind of rational understanding about behaviour and decision making. 

Now policies that then try and address that behaviour tend to, for example, assume that we’re poorly informed about the opportunities available because if we knew that there were all of these things that we could do inexpensively that help the environment and that made our homes more comfortable then we’d all be doing them.  The problem is we’re not.  So they assume well there must be a shortage of information.  So policy will focus on providing us more information.  Policy may also focus on making the financial side to this slightly more attractive, so they might offer us a small subsidy and so on.  So this idea that we’re broadly rational and that therefore we must provide more information and slightly better financial incentives to kind of trigger as it were these rational decisions is very prevalent in the policy world and also the business world I think. 

So we looked at this and thought well we think there’s something missing from this perception because the policies that we enact haven’t proven to be extremely successful, there’s a long way to go, and remember at the heart of this ultimately are technologies or behaviours which should save people money and do all of these other things.  So what we did is we surveyed in some depth homeowners.  This was actually research I did in Canada, in British Columbia, in Canada.  We surveyed homeowners who were at some stage of a home renovation decision, a major home renovation decision. 

So we talked to people who were just kind of thinking about it.  We talked to people who were right in the middle of it and we talked to people who’d just completed them.  And we also talked to people who, as a control group, who weren’t thinking or doing them at all to compare their responses.  So when we compared the responses that we got and we were asking them things to do with their motivations, things to do with the way they made the decisions, the way they made their choices and so on, when we compared the results between these different cross sections, these different types of homeowners, in terms of where they were in the decision process, some very interesting things fell out of that.

So I’ll give you two examples.  The first example is that when we asked people about these rational reasons, saving money, helping the environment, making their homes more comfortable, of course they turned out to be common motivations for the decisions, but actually they turned out to be common motivations that homeowners cited after they had completed their renovations.  When you looked at what homeowners said before they had done their renovations but as they were thinking about it, in fact they tended to emphasise three types of motivation.  One are broadly emotional, the second were broadly aesthetic, to do with the sort of visual look, and the third was broadly to do with social norms.  So social norms, I mean by that simply these were descriptive norms, so simply what other people were doing and what you could see that other people were doing.

Now there’s a little bit of a catch in that when you ask people directly are you motivated by what other people are doing, in other words, are you a sheep, do you like following the herd, people will tell you no.  So you have to sort of get at the question indirectly which is how we approached it in the survey.  So we found that before people had renovated their motivations were characteristically more emotional, aesthetic and normative, rather than the rational, financial, environmental and functional reasons that you get more after the decision.  In other words it suggested that through the decision process and having spent lots of money in renovating their home in major ways, people would tend to rationalise their decisions.  So rather than stick with this well, you know, I did it because I really wanted to from an emotional perspective, or I love the aesthetics of my new renovations, their stated motivations would shift and they would tell us these more rational reasons. 

Now they’re very obvious reasons why, and the simplest way that I like to illustrate this is when you ask someone a question about why did you do x?  Why did you buy this new shirt?  Why did you renovate your home?  There are things that they could say and your response would be oh, and that would be the kind of socially rational reasons, the reasons that make sense in a social context, and then there are things that they could say where you’d be oh, in a more confused way.  So if someone said to you oh I bought this new shirt because I saw this really cool guy wearing it and I really wanted to be like him, you would get this kind of huh response, so typically not what you would think of as a socially rational reason.  So that’s one example of this rationalisation process in action. 

Now another example was to do with property value and more generally money.  So when you ask people why they do something, particularly why do they spend a lot of money doing something, then a socially rational reason would be to say well it was a sound investment, it will provide returns within a one to three year timescale.  People would often tell us this with respect to the value of their home.  So they’d say, simplistically, I’ve invested $5,000 in this major home renovation but it will add $10,000 to the value of my home, very sound financial reasoning.  And what we found was evidence to suggest something different.

Rather than this nice cause and effect, where cause is me investing in the home, effect is increase in home value, financial returns back to me, what was actually going on was that the whole, as was characteristic in the UK for many years although not in the last couple of years, the real estate market, the property market was rising and rising and rising, very rapidly.  And so what this was doing was increasing the sense of value, or increasing people’s perception of how much their home was worth.  This creates a justification for spending lots of money on their home for these emotional and aesthetic and normative reasons.  Because, you know, essentially their home has become more because the whole market’s rising which gives them the rational for doing something let’s say less rational, but they can always rationalise it ex-post as being this sound financial investment. 

Now I should emphasise with what I’ve told you is that it’s fairly tentative type evidence.  Most things that you find out about people’s motivations and decision making from surveys is at least a partial piece of the puzzle, but it points to a suggestion that policy may be misdirecting its attention by focusing exclusively on this rational understanding of how people make decisions.


Impacts on policy making

Charlie discusses how his research impacts on policy makers, and looks ahead to the next ten years.


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Our research in this area also generated a particular suggestion which I’m not looking for an opportunity to test in the field as it were.  So the logic would be this.  If by, at the moment we’re concerned with trying to influence individual’s decisions; in this particular instance the individuals are typically homeowners who live in their own home.  In the UK, I think, this accounts for roughly 75% of the housing stock, so this is the major chunk.  So at the moment policy’s concerned with influencing these individuals to make this sort of set of decisions about energy efficiency through renovating their home. 

Now if you look at the data it turns out that if you look at how people spend money on their homes, they spend between five and ten times as much money on what you can broadly think of as amenities.  So this is nothing to do with energy efficiency.  So energy efficiency typically is heating systems, cooling systems, if they have them, the building envelopes, so the kind of overall structure of the home which seals the home against the elements, so this is insulation and so on, so energy systems, the building envelope and then also some of the major household appliances.  So that’s the sort of energy efficient renovations that we’re trying to influence.  What people actually spend their money on, on a day-to-day basis, are amenities.  So this is stuff like kitchens, new kitchens, bathrooms, living rooms, loft conversions, new garages, gardens, blah, blah, blah, very, very long list.

So we spend and, you know, the data depends on where you’re looking at and how you class the different categories but roughly between five and ten times as much on the amenities as we do on energy efficiency.  And it’s a fairly obvious point to say that we’re not being encouraged by policy to spend money on amenities.  We’re doing that because we want to, and also, you know, and if you think about it, it broadly corresponds to this more kind of emotional and aesthetic and normative basis for decision making.  So our argument would be look, rather than trying to stimulate a whole new class of decisions from the point of view of the individual, look at what people are doing already.  We’re spending money on amenity renovations and try and piggy back on that process.

So I’ll give you a very simple example.  Imagine you’re a homeowner, and I’m a policymaker, and I’m trying to encourage you to spend £1,000, you know $1,500 on your home doing energy efficiency stuff.  At the moment, as I said, I’m trying to stimulate you to do this, sort of off your own bat as a new kind of additional renovation that you might make.  Now consider that as a policymaker I know that in the next few years as a homeowner you’re likely to do a fairly sizeable home renovation.  You might replace all of the stuff in your kitchen and get new kitchen countertops.  You might do a full repaint and redecoration of your living room or whatever it might be.  I know you’re going to make this decision, and so I try and piggyback on that decision by inserting into that expenditure that you’re going to make plus all of the hassle that you’re going to go through talking to contractors, having home visits, getting quotes, deciding on the quotes, all of this kind of stuff.

And I’m going to say, rather than address my policy to you as a homeowner, I’m going to address my policy at the supply chain, all the various different home product stores and contractors that you’re going to use for your renovation, and I’m going to say to them, listen, if you manage to get this person to add on £1,000 worth of energy efficient renovations to his decision where he’s spending let’s say £5,000 on his amenities then I’ll give you an incentive.  I’ll reduce the cost to you.  It’ll increase the attractiveness of the service that you offer to this homeowner and crucially from the point of view of the homeowner it will mean no extra hassle.  So they don’t have to do a whole kind of collect information and go and see people and get experts and advisers to come to their home just for this energy piece.  They’re already doing that for the amenities.  They want to do that for the amenities, and so we’ll just sort of piggyback on that process. 

So, in other words, rather than directing information and incentives at individual homeowners you direct the information and incentives at the supply chain.  It gives them an improved sort of service offering to the homeowners and it reduces the cognitive burden on the homeowners.  So our contention would be that this would be a much more effective way for the same investment on the part of the policymakers, this would be a much better way of getting homeowners to do these kinds of energy efficiency things.  At the moment we’re overly focused with the need to somehow kind of create this radical step change that we have to just go off on a completely different path, and this is just, however ideal it may be, however desirable it may be, it’s just completely not realistic, not feasible. 

So we need to focus over the next ten years on kind of steering this elephant and trying to deviate its course.  I think, so in the social and behavioural realm in which I work, this will take place very incrementally, and it can be frustrating working in the field where you know the magnitude of the challenge and you know the magnitude of the social or behavioural response needed in terms of adopting new technologies and so on and it’s frustrating to see the relatively slow pace of change.  As it’s like watching paint dry, you don’t really notice it.  You need to continually look back ten years to realise what’s happened over the last decade, to realise that actually lots of incremental change could add up to some more substantive change. 



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