The Biden administration has dubbed the Build Back Better framework “the largest effort to combat climate change in American history.” Part of the legislation is a series of rebates, tax credits and grants for people to make their homes and cars more energy efficient. If the legislation passes (it has to pass!), program administrators will have the tough job of convincing people to invest in these upgrades, because financial incentives won’t be enough.
Experts say that widespread adoption of these household energy efficiencies is key to the success of BBB’s climate goals. For example, Princeton’s Net-Zero America study says that to meet the country’s goal of net-zero emissions by 2050, at least half of all new car sales by 2030 will need to be electric and over the next 10 years, the number of homes with electric heat pumps will need to double. That’s an enormous number of people who will need to buy in to these programs, and household adoption of low-carbon technology is crucial to reducing emissions nationally.
Understanding human behavior and the science behind decision making will help program officials drive home how important these changes are. The majority of Americans see climate change as an extremely important issue, but still, how program officials talk about efficiency measures is critical, as is the ease with which people can access these programs. These officials will need to appeal to consumers across political party lines, and people in underserved communities cannot be asked to jump through administrative hoops to get money back.
This is because BBB’s upgrades aren’t as simple as previous efforts to, for example, get people to switch to LED light bulbs; converting a home from natural gas to an electric heat pump can cost thousands of dollars, and research in environmental psychology shows that we are cognitively wired to keep things the way they are, even though there is a lot of money at stake in BBB for the average consumer.
White House officials say rebates and credits will save the average family hundreds of dollars per year on energy bills. The legislation’s climate programs aim to make it more affordable for Americans to reduce their greenhouse gas emissions by saving them money on electric upgrades for transportation, home heating and rooftop solar. Electric cars, light-duty trucks and motorcycles will qualify for a point-of-sale tax credit up to $7,500 ($12,500 for a vehicle assembled in the U.S. with an American-made battery). The package also includes funding for rooftop solar panels, electric water heaters and electric heat pumps.
But maybe surprisingly, some studies find financial incentives have weak effects on how people change their energy use. Researchers have even found that including financial incentives in energy efficiency programs can be counterproductive, though this isn’t always the case. In these cases, the promise of money might reinforce existing distrust in government or crowd out intrinsic motivation (the drive to do something because it’s personally rewarding, not because you’ll receive a reward or avoid a penalty).
A strong line of research shows that social norms, or informal social rules based on how we perceive each other’s actions, influence a variety of energy-related behaviors. Word-of-mouth communication between people and observational learning—the way we watch each other do things, then go do them ourselves—could lead to clean tech adoption by making people aware of the benefits and reducing uncertainty about how difficult it might be to make the change.
Other research shows that the more rooftop solar installations installed in a geographic area, the more likely neighboring households will be to adopt the technology. Program administrators should work at the local level to engage community leaders in the energy transition, who might help to multiply these behaviors by building networks of trust and creating new social expectations around switching to renewables. Visibility of new technology also plays a role, given stronger effects for highly visible solar installations and interpersonal influence on vehicle adoption from neighbors, family, and coworkers.
In addition to creating new social norms, program administrators will need to be thoughtful about how they deliver BBB’s rebate and funding information. They should make information easy to access, delivered in across multiple platforms (mailers, social media, public meetings) with timely reminders, and framed in terms of objectives people care about (like health impacts of air pollution).
From a climate justice perspective, we know that the bureaucracy of accessing public services creates disproportionate barriers for low-income, minority, disabled and aging households who might benefit most from potential savings. For example, applications can be time-consuming, require internet access or lack non-English translations. People who have lower incomes spend a disproportionate share of their incomes on energy expenses and tend to participate less often in energy efficiency programs due to high up-front costs, their statuses as renters rather than homeowners, and other barriers.
And once people have made these changes, there is still work for program officials to do. Reaching net-zero goals by powering households on electricity depends on the assumption that when consumers adopt clean energy technologies, their patterns of use stay the same. “Rebound effects” refer to the idea that as energy efficiency upgrades lower the cost of energy, sometimes people end up using more of it. A variety of factors might explain this, including moral licensing, or the idea that when you do something “good” (like buy a shiny new EV), you can “indulge” and drive to places that you otherwise would walk, bike or use public transit. Programs that encourage household energy conservation will still matter, even with the best tech.
Quiet acceptance—a lack of vocal opposition—won’t have the same impact as more outward, enthusiastic support for a renewable energy transition. Realistically, though we need both. While appealing to social norms and individual values can help garner enthusiasm for a shift, especially in people who already concerned about climate change, other tools like regulatory nudges and default choices that are more “green” can help on the acceptance end. One successful program in Germany automatically enrolls customers with renewable electricity service providers. A study of that progam found that even customers who don’t report climate concern tend to stick with the default renewable energy provider. Other experiments show messaging about environmental benefits as a promising tack when coupled with financial programs for large home efficiency upgrades.
Researchers have spent decades building and testing behavioral science tools for policy. While campaigns around low-cost energy conservation behaviors have taken note, providers of larger, structural energy efficiency upgrades still more commonly rely on financial incentives alone.
For Build Back Better programs to reduce emissions at their greatest potential, regulators must use all the tools at their disposal.
