Case Study Evidence and Behavioural Analysis of Residential Energy Consumption in the UK

Abstract

This paper investigates residential energy consumption in the UK by using a novel and topical approach based on behavioural analysis. A key lesson from recent advances in behavioural economics is that the responses of individuals to both policy incentives and uncertainty may differ from the predictions of classical rational optimising behaviour. By employing a focused case study approach using both quantitative and qualitative response analysis, it considers the motivations of residential householders in the UK to reduce fossil fuel use, with additional perspectives from UK landlords, a global environmental NGO, a senior politician, and two senior stakeholder strategy managers from a large energy company. Our interpretative behavioural analysis shows that a variety of incentives are necessary to encourage behaviour change. However, case study participants largely agree on the beneficial role of government regulation and efforts to “nudge” them in the right direction with regard to their energy use. As a means of more effectively reducing carbon dioxide emissions, we conclude that policy should focus on sustainable energy use. The findings allow us to understand why important recent policy initiatives such as the UK Green Deal failed to achieve their objectives and they suggest lessons for more effective incentive based policy making in the field of residential energy consumption.