“Consumers now understand climate science better – their ecological choices are shaped by peers, visibility and messages”

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Kenneth Gillingham teaches economics at Yale University. In an interview with Srijana Mitra Das he talks about the upcoming energy transition, what shapes the ecological behavior of consumers – and what drives the environmental policy of the US government:

What transitions are most likely by 2030 in a fossil fuel intensive sector like transport?
The technology for electrifying transport has improved tremendously over the past decade. Battery prices have dropped sharply, from $ 1,200 to around $ 100 per kWh. Most major automakers are now pushing forward very quickly – General Motors has announced that all of their vehicles will be electric by 2035, while Volkswagen has announced that it will stop producing combustion

by 2026. There will be very rapid electrification of transport, with lower emissions leading to a much lower carbon economy. But the health benefits will far outweigh the climate benefits in the short term. Pollution will drop dramatically – there is unassailable evidence that the health effects are severe when you inhale high levels of particulate matter. These transitions will reduce the premature mortality of millions of people worldwide.

You served on the White House Council of Economic Advisers in 2015-16. Has the ecological understanding since then shaped the environmental urgency of the current US administration?
The Obama administration has both taken concrete action to combat climate change and laid the groundwork for future action by supporting scientists and producing influential analysis. For example, it showed how the Recovery Act of 2009 in clean energy investments has influenced the growth of this industry. The Economic Council also released a report on the cost of delaying action against climate change. All of these steps played a role. But the bigger factor affecting the boost now is a much more widespread understanding of people about climate change. Scientists have gathered undeniable evidence. One possibility was attribution studies, in which one can attribute a hurricane to climate change or say that a tropical cyclone was one and a half times worse because of it. This has done a lot to make climate protection public.

Are you planning a carbon tax on US industry anytime soon?

I would love to – but honestly, I won’t see it anytime soon. I can imagine something similar to a CO2 tax on electricity, like the Clean Energy Standard (CES). I can also imagine a carbon tax-like mechanism being applied to transport. However, industry is the last place this would likely be applied due to concerns about international competitiveness and the brain drain with job losses. The possibility of a CO2 tax for industry will only increase if it is applied jointly in several places around the world.

You have examined incentives that can change consumer behavior – can you share some of the findings?

I have found that based on the information provided, consumer perceptions of an environmentally friendly activity, such as putting solar panels on the roof for electricity or changing the layout of the front yard to save water, can change based on the information provided – this often comes from Peers, own observations and information via messages and email.

There is a very strong contagion effect on peers – if you have solar panels installed, your neighbor is more likely to do the same. The effect is stronger when the eco-friendly activity is visible to people – you can see my solar panels as you walk past my house. They look pretty good and when they see them other people have said, ‘This looks good, maybe we can do this too,’ and a lot of them actually did. I also looked at how different messages reach different groups of customers. Wealthier people were often more responsive to messages telling them how much they would save by installing solar energy. Low-income households responded to a community-based outreach that discussed how solar energy would help everyone. When installing solar systems, these communities reported a higher level of satisfaction because they had a different motivation.

Making green activities something to talk about with your neighbors when it is visible and the messages are aligned with the group you are trying to reach can be an effective way of changing consumer behavior.

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Are we now in a vicious circle of warming, as climate change is now exacerbating heat waves, increasing energy requirements and thus emissions?

There is evidence of a vicious circle, particularly with air conditioning. Its use grows with people’s affluence, but heat waves make it worse. British Columbia, Canada recently hit 125 ° F – the hottest you have ever seen. Such heat exposure is dangerous and will lead to more people in Vancouver getting air conditioning. But we can decarbonize electricity, develop more efficient air conditioning systems, and reduce electricity consumption with better designed devices. I am optimistic that despite the added electricity load with air conditioning and electrifying traffic, this can be developed in a lower carbon way.



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