Nudging Energy Efficiency into the National Conscience

Rather than waiting for laws, proponents of a low-carbon lifestyle have been carefully nudging and socially pressuring energy efficiency and conservation into the national conscience.

The White House vegetable garden was a nudge by example. Communities from California neighborhoods to college dorms have kicked that up a notch with direct social pressure, sharing energy use numbers so residents know who the neighborhood energy hogs are.

Smart meter advocates are hoping to nudge a little more by making real-time energy-tracking meters the default during renovations and home construction, meaning homeowners wouldn't have to go to any effort to opt in, only to opt out.

"Nudging" is Cass Sunstein's term, and it's increasingly being heard in Washington. The Harvard professor and former University of Chicago colleague of President Obama's is one of several behavioral economics experts now advising the president, and he is Obama's choice for regulations chief.

Sunstein is also an expert in the importance of choice architecture – putting the fruit at eye level in a cafeteria line, for example, and the cake somewhere less prominent; it’s free choice, with a nudge in the healthier direction. The same thing can be done with energy choices.

It's how the options are framed that matters.

The most successful nudges make the preferred choice – energy efficiency in this case – the default, so by doing nothing, people are automatically taking the route of action, the way some businesses automatically enroll employees in 401k programs and require action to opt out. 

Defaults are already useful in saving energy – lights that automatically turn off when there is no motion in the room, for example. In a few German towns, the street lights are kept off unless residents turn them on using their cell phones; the tiny town of Morgenroethe-Rautenkranz saves more than $5,000 a years with the technology.

Smart meters could easily become a default for construction – one that pays off for the homeowner in monthly utility payments, for the utility in peak use reduction, and for the climate in lessening levels of CO2.

This all builds up to using social pressure as a nudge that can be harnessed for doing good.

We all know how easily people are swayed by their peers’ behavior, so what if “keeping up with the Joneses” wasn’t about sporting the latest fashion but rather about having the most efficient use of energy?

It’s already being tried in several cities, to remarkable success.

In the UK, British Gas and the Institute of Public Policy Research just wrapped up a yearlong social experiment in energy savings via competition and peer pressure called Green Streets. The company provided $44,000 to the families on eight UK streets to be spent on energy efficiency measures, plus the advice of British Gas experts and smart meters. The winning street was promised an additional $73,000 for efficiency work.

The participants cut their CO2 emissions by an average of 23% and their energy use by 25%. IPPR estimated that if all UK households did the same, the savings could be nearly $6.8 billion.

The key wasn’t a financial incentive, IPPR found – it was the social incentive. Each street wanted to win, and the competition brought neighbors closer together. They could boast about their energy savings while also encouraging one another to get moving.