Nudging consumers to choose green energy

Consumers may be more likely to purchase more expensive household energy from renewable sources if a ‘green’ tariff is presented as the default option, suggests a study published online this week in Nature Climate Change.

Scaling up behavioural principles uncovered in laboratory experiments, a method known as nudging, has become popular among policymakers as a way to influence individual decisions to meet societal goals without using coercion. Default nudges, which require a person to actively opt out of a default choice, have been shown to increase participation in programmes such as organ donation. It is not known whether a similar technique can effectively influence consumers’ energy-related behaviours.

Sebastian Lotz and Felix Ebeling conducted a randomized controlled trial involving 41,952 German households in which prospective customers visiting the website of a national energy supplier were asked to choose between two differently priced energy contracts. Both contracts also gave consumers the option to choose a green plan at an additional cost. The box to agree to the green plan was selected (opt-out treatment) for some website visitors and not selected (opt-in treatment) for others.

The authors found that only 0.62% of households purchased a green contract in the opt-in treatment, while 5.58% of households did so in the opt-out treatment. They also found that political alignment with Germany’s environmental party was not associated with choosing green energy when the default nudge was in place. Based on their results, the authors suggest that encouraging consumers to choose energy from sustainable sources can be achieved without the use of subsidies or other economic incentives.

doi: 10.1038/nclimate2681

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