Peer Pressure: The Key to Efficient Behaviour

Motivation researcher Robert Cialdini conducted an experiment to see what kind of message would prompt people to save energy. He and his students placed signs in several homes in certain neighbourhoods, exhorting people to conserve energy for one of four reasons: (1) to save money; (2) to save the environment; (3) to benefit future generations, and (4) because the majority of your neighbours are doing it. Other houses had no signs posted. After one month, Cialdini found that the message about peer energy use provoked people to be the most efficient. Later, he sent letters to homeowners telling them how their energy use compared with their neighbours, which prompted even stronger energy conservation.

The article in the New York Times explains this research in more detail:

http://www.nytimes.com/cwire/2010/06/21/21climatewire-finding-the-weapons-of-persuasion-to-save-ene-8137.html

Will the Real #1 Driver of Climate Change Please Stand Up?

As I study energy and climate, statistics fly at me from every direction and it gets really hard to sort things out. Everything, it seems, is "the largest single producer of carbon emissions" and there is no way to sort out which really is the largest.

NASA recently conducted a study of all the major sources of greenhouse gas emissions and their net effects on climate change.

http://www.energybulletin.net/node/51744

Clearly, electric power production is the largest single source of C02, but it is offset by aerosol-cloud effects and sulfates that actually cause global cooling, thus the net global warming effect of electricity production is about the same as the Industry sector.

Likewise, the road transportation sector produces less C02 than the Industry and power sectors, but road transportation does not have the aerosol offsets that would reduce it's impact on global warming. Thus, while the road transportation sector produces less C02, it actually contributes more to global warming than Industry and Power—today.

However, if you look at the title of the article, it says "Road Transportation Emerges as Key Driver of Warming." While is this is true in a qualified sense (it is "a" key driver), that statement doesn't make as much sense when you look at the first graph. Electric power production produces the most C02, and in fact, the NASA data shows that in the future, assuming BAU, electric power production will continue to be the largest driver of global warming, with road transportation second. As we build cleaner power plants that produce fewer aerosols, the warming effect of power production will increase dramatically. Road Transportation as "the" key driver only appears when you look at the second graph, which is an estimate of emissions for 2020.

What the article doesn't consider is the behavioral effects of car use. Driving increases casual consumption exponentially. The reason why we shop more, eat out at restaurants more, live, work and play at greater distances, is because of the power and convenience of the automobile to get us to every destination cheaply and efficiently. Cars exponentially increase the speed and amount that we are able to consume. This increased consumption creates a demand for more products and services, which in turn creates a demand for more electric energy production and more industrial production, which also leads to an increase in road transportation. So in that sense, road transportation is indeed a KEY driver in global warming. Ecologists call this effect a "positive feedback loop."

An Up-Side to Corporate Concentration?

Generally speaking, I'm not a big fan of mega-corporations. My fast food consumption is close to nil. I buy something at WalMart once or twice a year. The one significant exception is Amazon. I collect relatively obscure art photography books. There is no place in town to satisfy that desire. While I'll get really obscure ones directly from the small presses, the lure of price and easy availability (30% off! Free shipping on orders over $39!)lures me into Amazon's clutches. But, interestingly, that same level of buying power that corporations have traditionally used to eek out every cent of profit for themselves (yes, I'm aware of how Amazon has forced local bookstores out of business and driven down the price that publisher's receive) can also be used for other purposes.

Thus, we have WalMart's plan to make its supply chain greener. In essence, WalMart is using its buying power to force its suppliers into examining the carbon lifecycle of their products. While it is the suppliers, not WalMart, that will bear the costs of modifying the product, general estimates place about 33% of energy efficiency gains as cost effective. Thus, in many ways, WalMart is only using a stick to get companies to make changes that are already sensible -- such as reducing packaging -- but require some sort of incentive to get the manufacturer to make the effort to change.

The press release claims that the plan will cut 20 million metric tons of greenhouse gas emissions from its supply chain by the end of 2015 -- the equivalent of taking 3.8 million cars of the road for a year. You can read more about it here.

We'll see. But on the face of it, this initiative makes sense for both WalMart and the suppliers. The carbon reductions will come from situations where efficiencies are cost effective and, hence, allow WalMart to further reduce prices at the same time that the suppliers are reducing both their carbon footprint and their production costs. The down side? In ten or twenty years, when all the economic efficiencies have been weaned out of the system, we end up with even more corporate concentration and a less resilient system at the time when hard, uneconomic reductions in carbon are necessary. At that point, all that corporate concentration, actively lined up against making the necessary changes, will come back to bite us in the butt.

Behavioural Responses to Efficiency: The Piggy Principle

Efficiency and Resilience: After Jevons Paradox, the Piggy Principle

This is a guest post by Marco Bertoli. Mr. Bertoli has an economics degree from Bocconi University in Milano and a master degree in renewable energy from the Milano Politechnical University.

Energy efficiency is one of the themes most discussed by those who are interested in issues regarding energy and the environment. The key question is how effective these proposed solutions will be. Will these technological solutions labeled as ‘energy efficiency’ (i.e. an increase in power plants generation efficiency, cogeneration, home insulation, more efficient electric motors, cars, light bulbs, etc.) really lead to a decrease in the global demand for energy?

Read the rest of the article at The Oil Drum.

NOTE: In the rest of the article, the economist argues that producer efficiency is affected by Jevons Paradox, while consumer efficiency is affected by the Marginal Utility principle, or the Piggy Principle. The economist argues that we need to lower the point at which people feel satisfied with what they have, in the way that bariatric surgery lowers the point at which an obese person feels full. Ultimately, he argues for taxes that discourage any kind of excess consumption, rather than promoting "efficient" consumption.