Thursday, 13 August 2015

The future of... Energy Conservation

"More Kirk than Spock" announced an article in the The Economist last May. It was describing how macroeconomic models assume people come from the Star Trek planet Vulcan - exercising cold logic and maximising utility at every stage. But how real people, in the real world, behave quite differently. 

It appears that Behavioural research has been established at the scale of micro-economics but is still fighting to gain traction at the macro-level. Interestingly, governments appear to be waking up to the importance of behavioural insights faster than macro-economic theorists. As the article states:

The British government, for one, set up a behavioural-insights team to make policy more effective. It is now accepted that the way choices are offered does affect decisions, such as asking people to opt out of rather than into pension schemes or organ donation. The effect on take-up is substantial which should not be the case if individuals were perfectly rational.

This “nudge” approach works elsewhere. Fixing parking tickets to car windows with bright orange stickers (rather than a piece of paper under the windscreen-wiper) attracts the attention of passing cars and makes drivers less inclined to park illegally, because the risk of being caught seems higher. Writing to delinquent taxpayers and telling them that most fellow-citizens have paid up makes them more likely to cough up too.

Behavioural insight is also the basis of theories in criminology like the one about "Broken Windows". It states that signs of urban disorder promotes anti-social behaviour. So if one repairs broken windows within a short time, vandals are less likely to indulge in further anti-social behaviour by breaking more windows or causing further damage. Actual field studies like the ones by the University of Groningen proved the case. An envelope visibly containing a €5 note hanging out of a mailbox was stolen much more often when the mailbox was covered in graffiti and the area around it was littered.

An experiment by a professor of psychology, Robert Cialdini, studied how behavioural insight could be used to make people save energy. As the article in the New York Times describes:  

In one San Diego suburb, Cialdini's team went door to door, ringing the doorknobs with signs about energy conservation. There were four types of signs, and each home received one randomly, every week, for a month. The first sign urged the homeowner to save energy for the environment's sake; the second said to do it for future generations' benefit. The third sign pointed to the cash savings that would come from conservation.   

The fourth sign featured Cialdini's trick: "The majority of your neighbors are undertaking energy saving actions every day."... At the end of the month, Cialdini and his team read the homes' meters. They compared the four types of homes to other homes that had received no signs at all. The only sign that made a difference was the one about the neighbors.   

It appears that (illogical) behaviour matching a "Follow the Herd" mentality or "Keeping up with the Joneses" is more compelling to people than all the common sense/logic based actions including the most self-serving - saving cold hard cash. Humans would clearly never be Spock.
But as Cialdini demonstrated, governments could still try to manipulate people's behaviour (rational or irrational) to reduce energy use just as they are attempting to reduce crime with the Broken Windows policy. As respondents in a study on smart meters pointed out, real-time metering combined with time-of-day pricing would probably have an effect on people's behaviour. Presumably, watching their "Meter Ticking" and costs increasing would stress individuals enough to modify their behaviour. But even if the effort to reduce energy consumption is a success, one very tricky question remains - 

Does reducing energy consumption actually conserve energy?

On the face of it, this question may seem a bit absurd and a no-brainer. Yet there are scholars, even well-established government advisor types, who argue differently. One of them, Arik Levinson, was featured in a podcast last May (a few days before The Economist article) by the authors of the book "Freakonomics". In it he described how energy efficiency regulations weren't really that efficient. One of the reasons cited was the "Rebound Effect". 

Behavioural tendencies is again at the core of this theory that explains why energy efficiency gains may paradoxically result in increases in energy use. For example, when a person has a more fuel-efficient car, they may end up driving more because each kilometre of travel becomes cheaper. This then results in no net energy being conserved - or conversely, even more energy consumed. The phenomenon was observed in Victorian times:

The rebound effect was first described by William Stanley Jevons in his 1865 book The Coal Question, where he observed that the invention in Britain of a more efficient steam engine meant that the use of coal became economically viable for many new uses. This ultimately led to increased coal demand and much increased coal consumption, even as the amount of coal required for any particular use fell. According to Jevons, "It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth."

In the podcast, Levinson discussed his paper on "How Much Energy Do Building Energy Codes Really Save?" His conclusion based on data - none or not very much. He speculated on the reasons in his paper but his essential point on the podcast was that energy efficiency is now the central mandate of the U.S. government's climate change policy while it doesn't actually reduce energy consumption and the Earth continues to warm and carbon emission continues to increase.

Levinson's study was subsequently criticised by a few agencies including Energy Innovation LLC. They pointed out that the analysis was fundamentally flawed since it considered only electricity use and not natural gas which is commonly used for space heating and water heating in the state being studied (California) - and which has seen reduction after implementation of the energy codes. Even for electricity consumption, it was considered solely for lighting, appliances, personal electronics, etc. and not for electric HVAC and water heating systems which, again, saw more impact from building codes.

The Pacific Northwest National Laboratory found in their nationwide study of the U.S. that 69% of building code savings in 2012 were in the commercial sector and only 31% in the residential sector. About 80% of those commercial savings were in electricity. Yet Levinson did not look at commercial usage of electricity only selected residential use. A third commentator, looking very closely at Levinson's hypothesis and methods, pithily wrote: 

...the paper was evidently written in a format that listeners to the Freakonomics podcast would like. This format is based on the narrative: "You thought that the answer was A, but OMG, really the answer turns out to be B." Note the use of the word "really" in this script, since Levinson employs it in the title...

Evidently, pandering to the crowd is problematic. 

Yet something in all the refutations is clear. Regardless of Levinson's methodology (or lack thereof), they all acknowledge that energy consumption by individual electrical appliances has increased, the number of electrical appliances in a household have increased and that house sizes, in general, have increased. This factor (even neglecting the first two) would have definitely increased energy consumption so the Rebound Effect appears to be confirmed. 

In fact, the Building Energy Codes have achieved the energy efficiency they were supposed to by simply maintaining energy consumption at pre-code levels even where usage has shot up. This means that Levinson's data appears to prove that they do work and are efficient. 

So his hypothesis in the paper is likely wrong (building energy codes do contribute to energy efficiency) and his hypothesis in the podcast is likely right (energy efficiency does not necessarily translate to reduction in net energy consumption). All of which leaves one to ponder as to whether Energy Conservation is truly ever achievable for humankind or will always be a pipe dream.
Postscript / October 2015: Mauritius is a classic example of the "herd" mentality for installing (or rather not installing) fans. The island has beautiful weather and most parts remain between the temperature of 20°C/ 68°F and 29°C/ 84°F through the year. The weather is so agreeable here that unlike most tropical countries, it was never the norm to install ceiling fans in buildings even after electricity had come into common use. Yet most new homes today are being built directly with Air-conditioning to "keep up" with the international market. 

This happens when herds of tourists and expats arrive on a tropical island from temperate zones, and want the temperature to be 18°C at all times. And locals give in and follow. The weather in Mauritius remains beautiful, the sun warm and the sea breeze cool, humidity levels mild - and everything still well-suited for the use of ceiling fans. But these were never part of the Mauritian lifestyle and now the aspiration is for AC.
Rental apartment Curepipe with AC -

Author: Shahana Dastidar

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