Large and persistent effects of green energy defaults in the household and business sectors

Abstract

Non-monetary incentives that encourage pro-environmental behaviour can contribute to combating climate change. Here, we investigated the effect of green energy defaults in the household and business sectors. In two large-scale field studies in Switzerland of over 200,000 households and 8,000 enterprises, we found that presenting renewable energy to existing customers as the standard option led to around 80% of the household and business sector customers staying with the green default, and the effects were largely stable over a time span of at least four years. Electricity consumption had only a weak effect on default acceptance. Our data do not indicate moral licensing: accepting the green default did not lead to a disproportionate increase in electricity consumption. Compared with men, women in both the household and business sectors were slightly more likely to accept the green default. Overall, non-monetary incentives can be highly effective in both the household and business sectors. Based on data from two large-scale field studies in Switzerland, Liebe, Gewinner and Diekmann examine the acceptance of green energy defaults in the household and business sectors. They find large and temporally stable default effects in both sectors.

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https://doi.org/10.1038/s41562-021-01070-3
1Department of Sociology, University of Warwick, Coventry, UK. 2Department of Humanities, Social and Political Sciences, ETH Zurich, Zurich, Switzerland.
3Institute for Sociology, University of Leipzig, Leipzig, Germany. ✉e-mail: Ulf.Liebe@warwick.ac.uk
Combating climate change is one of the major challenges of
societies around the globe, and promoting pro-environmental
and sustainable behaviour is a key part of mastering this chal-
lenge. Yet this involves a well-known social dilemma: an improved
environmental quality is a collective good—thus those who do not
participate in pro-environmental activities still benefit from the
effects of pro-environmental behaviour by others1,2. Consequently,
providing the collective good is endangered by free-riding behav-
iour and, if many in a population free-ride, there will be an under-
provision of the good. Relying on people’s pro-environmental
attitudes to avoid free-riding behaviour is not sufficient: while stud-
ies document relatively high levels of environmental concern in
many nations3,4, these pro-environmental attitudes do not automat-
ically translate into corresponding pro-environmental behaviour.
This is indicated, among others, by nations’ ecological footprints
being persistently well above carrying capacity. Fossil fuel energy
production and consumption are important components of these
high footprints5–7.
Against this background, the fundamental question of how
to overcome the social dilemma of climate change mitigation
and create effective institutions and incentives that promote
pro-environmental behaviour is at the top of the research agenda
of the (environmental) behavioural sciences1,8. Besides well-known
economic measures, there are cost-effective non-monetary incen-
tives such as giving information feedback and using descriptive
norms or default options9,10. Research in the behavioural sciences
suggests that cues in a decision environment can promote sustain-
able behaviour like green energy uptake and, hence, contribute to
combating climate change11,10.
Default settings, the topic of this paper and a well-established
behavioural mechanism, have proved highly effective in influencing
decision-making in diverse settings including organ donations, giv-
ing to charity, saving paper and reducing fossil energy9,12–16,10. Default
settings are related to the status quo bias in decision-making17. Other
explanations of the default settings effect include the tendency to
stick to the current or standard option in order to avoid losses18,19,
inertia, costs of information on alternative choices, interpreting the
standard option as a recommendation20 and moral costs of opting
out15. If green energy is presented to households as the standard
option, previous research10,12,15,21–23 suggests that individuals will
stick to this option even if it is costlier than alternative options such
as conventional energy (for an overview, see Kaiser et al.23). Previous
demonstrations of this potential of green energy defaults for new
customers in the household sector have not taken into account tem-
poral (in)stability and, hence, possible behavioural change over time
as well as moral licensing behaviour.
In this study, we make four contributions to research on
non-monetary incentives in the context of climate change mitigation
and pro-environmental and sustainable behaviour. First, we tested
the effectiveness of green energy defaults in the business sector as
compared to the household sector. Is acceptance of green defaults
comparable among entrepreneurs and private households? This is
not a trivial question, as many studies suggest that individuals with
business/economics backgrounds act more in accordance with
homo oeconomicus or hold different economic beliefs than individ-
uals with non-business/economics backgrounds24–28, and, given the
social dilemma of climate change mitigation, entrepreneurs might be
prone to more free-riding or to less bias in decision-making. Yet it is
also possible that accepting green defaults helps entrepreneurs signal
to customers that they are socially responsible29,30. Second, we stud-
ied the effects of green energy defaults in existing customer popula-
tions. Since most individuals stay at their place of residence for long
time spans, it is crucial to find ways to motivate a change in their
behaviour towards more sustainable energy usage. Third, we anal-
ysed the stability of default effects over time spans of up to four years.
Based on panel data, we investigated whether and how customers in
the household and business sectors change their behavioural choices
over time. Intervention studies, and lab experiments in particular,
often focus on short time spans, but effects that are large right after
an intervention may fade over time9,31,32. Thus, intervention effects
are often grossly overstated. Fourth, the literature suggests that
moral licensing can be an unintended effect of green energy defaults:
by doing something good for the environment, individuals might
perceive an increased level of resource consumption as legitimate33,34.
Large and persistent effects of green energy
defaults in the household and business sectors
Ulf Liebe 1 ✉ , Jennifer Gewinner 2 and Andreas Diekmann 2,3
Non-monetary incentives that encourage pro-environmental behaviour can contribute to combating climate change. Here,
we investigated the effect of green energy defaults in the household and business sectors. In two large-scale field studies
in Switzerland of over 200,000 households and 8,000 enterprises, we found that presenting renewable energy to existing
customers as the standard option led to around 80% of the household and business sector customers staying with the green
default, and the effects were largely stable over a time span of at least four years. Electricity consumption had only a weak
effect on default acceptance. Our data do not indicate moral licensing: accepting the green default did not lead to a dispro-
portionate increase in electricity consumption. Compared with men, women in both the household and business sectors were
slightly more likely to accept the green default. Overall, non-monetary incentives can be highly effective in both the household
and business sectors.
NATURE HUMAN BEHAVIOUR | VOL 5 | MAY 2021 | 576–585 | www.nature.com/nathumbehav
576
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