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The role of consumer behavior and heterogeneity in the integrated assessment of energy and climate policies

Final Report Summary - COBHAM (The role of consumer behavior and heterogeneity in the integrated assessment of energy and climate policies)

The ERC COBHAM has provided novel theoretical and empirical evidence about human behavior related to energy efficiency and climate change, and how can behavioral characteristics facilitate or hinder the low carbon transition. In order to do so, we combined state of the art experimental and modeling methods, going beyond the standard economic and analytical tools.
We have run up to ten field experiments evaluating a variety of behavioural levers –including information provision, labeling, social comparison, real time feedback- in a variety of applications to the energy field – on air conditioning use, efficient cookstoves, solar panels, lightbulbs, refrigerators, electricity and natural gas usage. The experiments took place in many parts of the world, both in developed countries (Europe and US), emerging economies (China), and developing ones (Mali, Pakistan), and have involved hundreds of thousands of people. Results have highlighted the potential and limitation of information provision in fostering energy efficiency. We have found that information provision works only for small purchases (ie lightbulbs), but can backfire for expensive items with long payback times (ie efficient fridges). We have shown that deadlines can help overcome procrastination, but also that people tend to avoid information when they would feel obliged to behave better. We evaluated social comparison and other nudges, very popular tools with wide applications especially in the US, and found they don’t work well in Europe –possibly because Eu citizens consume less energy than US ones.
We have used the vast empirical data to build better models for assessing future energy transitions, advancing three energy-economy-climate models of different nature and capacity. The results have shown that energy efficiency is key for achieving the Paris agreement and other sustainable development goals, and that building sector renovations are a key are of focus for Europe given its long lived building stock. We have also shown that household heterogeneity is very large, but that should not be a major impediment to the transition to a low carbon society.