Applying Behavioural Economics to Energy Efficiency Projects

Summary paragraph:

Behavioural Economics Theory attempts to explain some of the inconsistencies between the predictions of conventional economic theory and people’s economic actions in the real world using an understanding of people’s inbuilt rules and behavioural preferences. Techniques for improving behavioural based choices may have particular relevance to energy efficiency projects because the high prevalence of energy inefficient behaviour in the world today suggests that people are using rules other than conventional economics to dictate their energy related actions.

The aim of this project was to review how strategies developed on behavioural economics theory could be applied to energy efficiency projects. This has formed the basis for recommendations for community campaigns working on energy efficiency initiatives on how their campaigns could be improved by understanding people’s behavioural responses to energy efficiency issues. Conclusions from this review suggest that energy efficiency campaigns could be improved by applying Behavioural Economic principles to their work. For example, interventions which focus on feedback may be particularly relevant to energy efficiency projects because it allows people to visualise energy as a tangible resource. Combining different types of behavioural change strategies also had a strong effect on people’s behaviour.

The report for this project is available here.