The German energy journal Energiewirtschaftliche Tagesfragen has published a new article by Frontier (Europe) which considers how behavioural insights can make policies to promote energy efficiency in the heating sector more effective and less reliant on government funding.
In many countries, such as Germany, governments have set themselves ambitious climate change targets that will also require major reductions in emissions from the heating sector. The German government already promotes energy efficiency measures in the building sector through regulatory requirements, financial support and information provision. Despite this, many German households are reluctant to invest in low carbon interventions even if they could achieve individual financial savings. If behaviour change is driven largely by emergency situations, such as when heating systems break, then policies are ineffective (since they encourage little additional low carbon investment) and a burden on state budgets.
The article, published in the January/February 2016 edition of the journal, identifies that the underlying issue is that many policy measures do not focus enough on the typical behaviour of households. It is essential to first understand what drives consumer behaviour. Apart from entirely rational barriers such as high direct or financing costs or technological risks, it is often the attitude of consumers that hampers investment in low carbon technologies. Therefore, successful policy design also needs to address behavioural barriers related to consumer awareness, attention and perception of new heating system technologies. Using behavioural insights can help to overcome these barriers.
Frontier (Europe) regularly advises clients on issues relating to energy and climate change and behavioural economics.
For more information or to request a copy of the article (in German), please contact Miriam Rau on [email protected], or call+49 221 337 130