Make Energy Efficiency Attractive

Citizens and businesses might not engage in energy-efficient behaviours if the behaviours do not convey any immediate benefits.

Explore the techniques below to learn how you can make the desired behaviours more attractive.

Make energy-efficient behaviours immediately rewarding

Provide citizens or businesses with immediate rewards upon performing the desired behaviour. Consider offering monetary prizes (e.g., discounts, lottery entries), in-kind rewards (e.g. vouchers) or social rewards (e.g., social approval, social status).

People tend to assign more value to benefits accessible in the present than those in the future. To motivate your target audience in adopting a new behaviour, consider whether there are any existing immediate benefits that you can put forward. Alternatively, think of any rewards you can offer immediately after your target audience performs the desired behaviour.

For example, cycling to work can provide many benefits, such as physical exercise and cost savings. However, these become evident only in the long run. Companies could encourage their employees to cycle to work by highlighting that it is a pleasurable experience or by offering gym membership vouchers.


Case Study
Incentivising Reduced Carbon Emissions with App-Based Rewards

A town in Finland has implemented an incentive programme to encourage citizens to reduce their carbon emissions. People who do not exceed their designated weekly 'carbon quota' receive virtual money on an app called CitiCAP, which can then be redeemed for bus tickets, swimming pool access, or a slice of cake. Modest incentives can be effective at encouraging behaviour change.

Make energy-efficient behaviours socially desirable

Make energy-efficient behaviours socially desirable by allowing citizens or businesses to display their actions to others.

People are more likely to engage in energy-efficient behaviours or purchase green technologies if it strengthens their social status. Make the desired behaviour more conspicuous, praise those that perform it or offer exclusive privileges.

For example, authorities could provide companies that comply with energy-efficient standards with a digital badge that they can add to their website to signal their ethical behaviour to others.


Case Study
Social Status Incorporated into Number Plates for Electric Vehicles in the UK

In 2020, the U.K. introduced special number plates for electric vehicles. These number plates designate that a car runs on electricity through a highly visible green stripe.

This special plate is available for all newly purchased electric vehicles and can also be retrofitted to existing vehicles that qualify for the programme. This designation increases the appeal of electrical vehicles through social capital by allowing car owners to publicly demonstrate their commitment to sustainable transportation.

Remove immediate frictions associated with energy-efficient behaviours

Remove frictions or hassles that might hinder citizens or businesses from engaging in the desired behaviour.

Making the desired behaviour easy to adopt should be considered as laying the groundwork for behaviour change. People are sensitive to immediate inconveniences. Small frictions, such as hard-to-understand language, lengthy bureaucratic processes and not-user-friendly interfaces, can discourage people from performing energy-efficient behaviours. One powerful technique to eliminate frictions is using smart defaults.

For example, authorities could require thermostat manufacturers to set an energy-efficient setting as the device default. Doing so would avoid having homeowners go through the hassle of manually changing the settings of their thermostats later on if they want to reduce their emissions.


Case Study
A Simple Programme for Trading In Inefficient Vehicles Increases Participation

The Cash For Clunkers programme in the United States encourages consumers to trade in inefficient vehicles when purchasing a new car in exchange for a cash rebate.

The programme is successful largely because of its simplicity: car dealerships complete the necessary paperwork, and customers automatically receive the monetary rebate when they trade in their old car for a more efficient vehicle.

Eliminating the need for additional effort on the part of consumers and making the rebate automatic encourages people to participate in this programme.

Offer upfront conditional rewards

Offer citizens or businesses an upfront reward if they take up an energy-efficient behaviour or programme. However, request them to return the reward if they fail to follow through with their commitment.

People tend to value goods more if they own them. They are also disproportionately more sensitive to potential losses than to gains. Offering conditional rewards that must be returned upon failing to meet a given objective triggers these psychological mechanisms, thus increasing the chances that they stick to their commitments. First, try to identify a set of conditions that you aim to achieve. Then, provide your target audience with a reward upfront that is dependent on them.

For example, bike-sharing providers could offer citizens a free extra ride when first registering for their service. However, the reward might be conditional upon cycling at least ten times in a given month. If they fail to meet this condition, they will lose their free bonus ride.


Insights from another field
Frontloading Monetary Incentives for Improved Teaching

Several schools in Illinois in the U.S. have tested the effectiveness of giving teachers monetary incentives to improve teaching quality.

Some teachers were given the funds at the start of the school year with the caveat that the money be returned at the end of the year if certain learning targets were not met. Other teachers were given the traditional end-of-year of bonus if their students reached the learning targets.

The results of this experiment indicated that the students of teachers who were given the funds up-front showed significant improvement in test scores.

The findings of this programme indicate that activating a loss aversion framework can significantly improve performance.