Domestic uptake of green energy promoted by opt-out tariffs

Abstract

Motivating individuals to choose energy from sustainable sources over conventionally produced power constitutes one of the biggest policy challenges for societies1,2. Here we present the results of a randomized controlled trial in Germany that tested the impact of default rules (that is, a type of ‘nudging’) on voluntary purchases of ‘green’ energy contracts that entirely stem from renewable resources. Setting the default choice to more expensive ‘green’ energy (that is, where consumers have to actively opt out if they do not want it) increased purchases of such nearly tenfold. Furthermore, county-level political preference for the green party uniquely predicted behaviour in the absence of the nudge, suggesting that default setting potentially overrules motivational aspects of green energy purchases. In follow-up experiments, we provide further evidence that the effect does not seem to be driven by unawareness. Summarizing, the present research provides an example of using behavioural science3,4,5,6,7,8,9 for climate change mitigation and shows alternatives to the use of subsidies or other economic incentives.

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Figure 1: Basic website layout in control (left) and experimental (right) treatments.
Figure 2: The impact of the default nudge on purchases of ‘green’ energy.
Figure 3: Interaction of regional ‘green party’ approval and experimental treatment.

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Acknowledgements

We thank the energy supplier for the collaboration and opportunity to embed the experiment in their webpage. Data and name are subject to non-disclosure. This research has benefited from research assistance by A. Fix and M. Schumann, who have been honour thesis students within this larger research project. We are grateful for comments from L. Goette, A. Ockenfels, M. Feinberg and R. Willer as well as the feedback of audiences at HEC Lausanne, London School of Economics, University of Geneva, University of Cologne, and Stanford University. Financial support by the German Research Foundation (DFG) is gratefully acknowledged by S.L. through the research-fellowship programme (LO 1826/1-1) and by both authors through the research unit programme (FOR1371: ‘Design and Behavior: Economic Engineering of Firms and Markets’).

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F.E. and S.L. designed the research question; F.E. managed data collection in collaboration with our industry partner. F.E. prepared data analysis to discuss with S.L.; S.L. drafted the manuscript; F.E. provided feedback to manuscript.

Corresponding author

Correspondence to Sebastian Lotz.

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The authors declare no competing financial interests.

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Ebeling, F., Lotz, S. Domestic uptake of green energy promoted by opt-out tariffs. Nature Clim Change 5, 868–871 (2015). https://doi.org/10.1038/nclimate2681

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