Sustainability Science Program

Improving Household Energy Efficiency through Information and Incentives

Overview

Improving Household Energy Efficiency through Information and Incentives

Anant Sudarshan

The generation of electricity is the single largest contributor to anthropogenic carbon emissions both in the US and in India (US Emissions Inventory 2013). Power generation also contributes to particulate air pollution in India as well as water pollution from coal plants. It is the residential sector (and almost entirely the urban middle and upper class) that has driven the demand for more electricity in India, and policy initiatives that manage this growth are therefore greatly needed. Unfortunately, electricity consumption habits in these households appear to mirror those in the developed world, with rapidly growing demand, limited adoption of energy efficient consumption habits, and limited attention to conservation behaviors. Tackling this problem is made all the more difficult by the lack of political will to raise electricity prices or adopt energy efficiency programs.

This study investigates whether simple behavioral techniques and direct provision of better information can reduce the energy consumption patterns of urban middle class households in India. The study seeks to quantify whether households can be induced to adopt energy efficient appliances and energy conserving behaviors if provided 1) weekly report cards on households’ electricity consumption, including comparisons of their own consumption levels with average consumption in similar homes, 2) information on ways to save electricity, and/or 3) small financial rewards linked to total electricity use. The study will be carried out over a six-month period in a randomly selected set of households in a typical new urban residential complex in a Delhi suburb. We will compare total electricity use of households provided weekly information (as described above) and compare this to a control group of similar households not provided this information.

The effectiveness of such techniques is important to quantify because they may lead to immediate and politically feasible public policy interventions aimed at managing energy use in developing countries. This study builds on recent studies that have evaluated similar programs (albeit in developed-country contexts and typically in small samples) and found them effective. To the best of our knowledge, however, no such intervention has ever been evaluated in a developing-country context. In addition, this project will provide the first rigorous experimental evidence on the relative effectiveness of behavioral and traditional financial incentives. The provision of report cards and financial incentives is presently ongoing and will continue through the Delhi summer. Early results were presented at the Northeast Universities Development Consortium Conference (NEUDC) at Dartmouth College in November 2012 and at the Indian Council for Research on International Economic Relations (ICRIER) in February 2013.

References

US Emissions Inventory (2013). “Sources of Greenhouse Gas Emissions.” Available at http://www.epa.gov/climatechange/ghgemissions/sources.html (access 30 September 2013).