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Nudging energy saving behaviours

The theory of nudges comes from behavioural science and was pioneered by Nobel-winning Richard Thaler. It is now being studied as an alternative strategy to help reduce household energy waste.


Traditionally, policies and initiatives aimed at convincing people to be more energy efficient stake a lot on awareness campaigns that show how much money can be saved. However, studies around the world have proved that motivation to be more virtuous than one’s neighbour may be even greater than the prospect of lower bills. That’s the power of nudges, a theory from behavioural science. A famous example in this sense is the OPower case, defined in 2011 by the World Economic Forum as a “technology pioneer”, thanks to the incorporation of behavioural economic techniques into software. Alex Laskey, cofounder of the company, told in a TED speech that everything started from some surveys suggesting that moral suasion and financial incentives don’t do much to motivate people to consume less energy. “But social pressure, that’s powerful stuff,” he explained: in other words, learning what your neighbour pays. “We built software and partnered with utilities companies who wanted to help their customers save energy,” delivering “personalised home energy reports to show people how their consumption compares to their neighbours in similar-sized homes”, and giving “everyone targeted recommendations to help them save. We started with paper, we moved to a mobile application, web and then a controllable thermostat.” And it worked, becoming a successful business model that was praised by the former US president Barack Obama. The nudge theory - the idea that soft and indirect suggestions can influence behaviour with the same effectiveness as laws, commands or forced fulfilment - had the definitive crowning in 2017. The American economist Richard Thaler received the Nobel Prize as his “contributions have built a bridge between the economic and psychological analyses of individual decision-making”. His ground-breaking research wasn’t limited to economics, as he included climate change challenges in the list of nudge applications. To investigate further applications, we had a chat with expert Sumedha Malaviya, a manager in the energy programme of the World Resources Institute (WRI) in India. She shared the results of a research conducted in collaboration with Sumathy Krishnan, executive director of the Bangalore-based NGO Technology Informatics Design Endeavour (TIDE). To read the full interview, click here:


energy behaviour, energy savings, nudge theory