Taking the Green Deal to the people
At a fringe meeting of the Conservative party conference in Manchester, Greg Barker (the minister for climate change) described what will be one of the most ambitious energy-efficiency programmes ever attempted: the Green Deal.
The flagship UK policy offers loans – linked to properties not householders, and repaid through energy bills – to cover the upfront costs of a range of energy efficiency measures, including loft insulation and boiler upgrades.
The scale of the ambition is impressive – the Green Deal aims to reach millions of homes, and is expected to play a major role in meeting national carbon-reduction targets. It has been designed with input from the Behavioural Insight Team in the Cabinet Office – a group of behavioural economists who have become widely known as the ‘nudge’ unit because of their heavy dependence on the book of the same name. The ‘nudge‘ approach says that instead of trying to persuade people to act one way or another, it is better to ‘nudge’ them into making certain choices and decisions.
It is hoped that people will be ‘nudged’ into taking up the Green Deal by offering them a range of incentives, but the government is at pains to emphasise that this is not a centrally-controlled strategy. Instead, the private sector will access government funds and deliver the Green Deal services themselves, from the loans to the lagging. This means that the Green Deal also represents a unique experiment in climate change policy: a three-way play between the state, the private sector and the public.
Will the experiment work? The basic logic of the Green Deal is bullet-proof: people seeking to increase the energy efficiency of their homes should not be held back by the upfront cost of installing efficiency measures. Over time, the changes pay for themselves through savings in heating bills – or at least, that’s the theory. In reality, when people save money on their heating bills, they may crank up the heat and simply pay the same amount as they were before.
Known as the ‘rebound’ effect, the same problem can arise if people spend the money they save on heating their home on other high-carbon activities, undermining the impact of the initial energy efficiency measures. One ‘nudge’ currently being discussed is the use of vouchers for household stores like Homebase as a means of making the Green Deal more attractive to people. But the risk of rebound here is significant – if people come home with a car-load full of power tools, the energy efficiency savings will be undermined.
These problems are by no means insurmountable – but the fact that the government wants to avoid too much control over the policy may conflict with the need for a coherent strategy for engaging the public. To avoid rebound effects, the Green Deal will have to make the links between different types of energy-saving behaviours clear. Yet the delivery of the policy is going to fall to the private sector, who will present it to the public in whatever way sells the most energy-efficiency services – regardless of how it impacts on people’s behaviour more broadly.
This conundrum highlights the paradox at the heart of the nudge approach, and by extension the Green Deal: sometimes the best way of achieving a specific behavioural change is not the best way of engaging the public in the longer term. This would not be a problem if the Green Deal was the only policy needed to tackle climate change, but in reality, it is just the start. Over the coming decades, major changes will take place across a range of sectors, from food and farming, to domestic and international travel.
The nudge approach doesn’t have very much to say about how different behaviours relate to each other. People tend to act consistently across different situations – e.g. saving energy at work, as well as at home – when they start to think in terms of a self-identity that includes concern about the environment. But if the Green Deal has only light-touch co-ordination from the government, there will be no mechanism for engaging the public at this level.
The Green Deal is an ambitious and impressive policy in principle. But when the cash incentives dry up, and no attempt has been made to engage with people beyond ‘nudging’, their enthusiasm for carbon-saving may disappear. The challenge for the government – and its private sector partners – is to find a way to deliver the policy that doesn’t unintentionally nudge people in the wrong direction in the longer term.
First published on 10-10-11 on the Guardian Professional Network.
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