3 Simple Nudges To Convince People To Use Less Energy

If we want to produce less carbon, we have to use less energy (which is also cheaper). The technology exists, but businesses and homeowners need some help getting there. Here’s how we can help.

In his State of the Union speech, the president posed a challenge to the states: reduce the energy our homes and businesses waste by half over the next 20 years. The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.

That’s a big goal, but we can do better. We can set a path to reduce the energy consumed by our homes and businesses by half—and we can do it in just 10 years—in a way that saves governments, business, and private citizens billions of dollars. It starts with three simple steps:

Energy labeling

Mandating that we make energy usage and efficiency of buildings available to users and purchasers will place the power in the hands of the consumer, much as we’ve done with food labeling. This will drive efficiency because people will be able to see the direct benefits accruing from being efficient. It will spur competition amongst commercial building owners and construction companies in competing for tenants, and it will serve as a value add for tenants who want a lease that will afford them lower energy bills. States have the power to implement building labeling systems within their jurisdictions, and they can implement these systems in the same way that restaurants receive grades for cleanliness, which are prominently displayed in windows of eateries. Progressive cities like New York, Austin, Philadelphia, San Francisco, Seattle, Minneapolis, and Washington, D.C., are already doing this.

Energy disclosure

We can do a variation of this for homeowners as well. State governments and regulatory bodies should push for energy disclosure statements on residential utility bills, allowing homeowners to understand their energy usage and how it compares to other homes in their neighborhood and region. With this information, homeowners can better understand their energy bill and how to reduce it. A little positive reinforcement for those who do and peer pressure for those who don’t doesn’t hurt either.

Updating and enforcing state codes and standards

Building energy codes are set and enforced at the state level. Creating more efficient homes and buildings at the base requires stronger enforcement of these codes and more ambitious mandates in terms of baseline energy efficiency through new construction and building retrofits. These investments will largely be made by the private sector, and the ROI will be millions of dollars saved that businesses can reinvest elsewhere within their portfolios.

This isn’t just a state problem, though, and it begins with the nation’s number one user of energy: the federal government. The federal government needs to walk the talk on energy efficiency. We’ve made some good progress over the past few years, but the opportunity in government buildings is still immense. Using financial vehicles such as Energy Savings Performance Contracts (ESPCs), cash-strapped building owners in government and education can invest in capital upgrades using no appropriated funds or tax payer dollars. Energy retrofits can easily achieve up to 30 percent energy savings while creating thousands of local jobs. It’s estimated that a typical $10 million ESPC creates about 100 of these jobs.

We as business leaders and government need to play our part, and the time to act is now. The United States currently ranks ninth in energy efficiency among the world’s 12 largest economies. We should all find that unacceptable. With energy efficiency touching some of the most critical issues facing our country, the government has an opportunity to come together on a policy that everyone can stand behind. This is an easy win—save money for taxpayers, create jobs, build a more sustainable future, and work together in a meaningful way. What are we waiting for?

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  • Norman Alston

    Many problems here. Chief among them is the apparent lack of realization that our existing built environment represents a truly enormous expenditure of energy. I thought it was widely recognized that the best use of energy is to utilize existing buildings that do not require all new construction. However, these recommendations, all three, put our existing buildings at a competitive disadvantage. A very narrow view of energy conservation.

  • Mike Calise

    Mike Calise here from Schneider Electric. I run Schneider’s North American EV charging business and will remark on your comment regarding EV adoption. Before that, it’s important to note that Chris’ ideas present new ways to meet reduced energy waste goals by catalyzing real action. Energy labeling, energy disclosure and updating energy codes and standards can have massive impact because they play on motivational psychology, from what we may know, to what we can do to convert that knowledge into real action. That’s’ really the hard part. We are already seeing nudges with EVs, PV solar and home and building energy management adoption. The process of action is not a simple one of knowing, but an emotional one of doing. Chris’ simple nudges are convincing, and yet they are not radical.  Now regarding EVs, standards, rebates, and creative government incentives should inspire the public to do something, and many business factors are coming together that will make widespread adoption of EVs possible like deploying ubiquitous charging infrastructure to increase effective range as motivators. But the most interesting are the new innovative EV business models being created. Disruptive EV business models are already taking shape that never existed before. When the human ego is involved, who happens to live next door, and her name is “Jones” and she brags (Disclosure) about 100 MPG (Label) when the price of gas is $4.00, and she drives the HOV lane and pays 2.5 cents per mile vs. 15 cents, that’s when she can become obsessed. And that’s today!We are already seeing Chevy Volt drivers blogging about averaging 125MPG that tell the world they went to the gas station once in two months. When you charge up at a commercial parking garage and drive home, that parking garage actually paid you to park there, and they’re thankful you chose their garage vs. the one across the street. They actually paid you by immediately filling up your electric tank with convertible currency. If you drive a Ford Focus Electric and had a four hour stay with free charge, they covered your 80 mile journey home instantaneously because electric energy is fungible. (That equals $16.00 as compared to a 20MPG gas car plus zero emissions.) Sure we have some things to work out on range and effective range, but this is just the beginning.  With Energy Labeling, Disclosure, and Codes enforcement, people will be inspired, motivated and even obsessed. Chris’s simple nudges will become big pushes and real action. It’s inevitable.

  • James Fogal

    How about something new?  Nothing you said hasn't been said 1,000,000 times before.  Wanna try something radical?  How about we start charging for fuel based upon the vehicle it goes in.  For example if you have drive a new SUV that gets only 20MPG because you think it makes you look cool then you pay a 100% penalty at the pump for those types of vehicles.  Truck owners need not start whining as there are already 110 MPG trucks available from VIA Motors so you too can start purchasing better vehicles.  This can work for almost any car or truck.  Heavy Duty vehicles would have to be exempt from any penalties.  Heavy Duty meaning capacities of 50,000 GVW or more. 

    We could require all cars/trucks be produced to share data with the gas pump on MPG in the last 200 miles of use.  The pump would pick up the VIN number of the vehicle and confirm that the numbers are even possible or it would charge up to twice the cost of a gallon of gas.  

    Cars that get 30-40 MPG receive a 20% reduction in fuel.  Cars that get 40-50 MPG get a 25% reduction in fuel costs all the way up to cars that have a rating of 100+ MPG can get a 50% reduction in fuel costs.  These savings should be handled two ways.  Half of the rebate is discounted directly at the pump and the rest as a deduction on income taxes based entirely upon need.  If someone makes $250,000 a year they only get a maximum 25% at the pump and nothing off of their income taxes.  People making under $20,000 can get the other 25% of their savings sent to them at tax time if they have a 100 MPG car or truck.  This helps people who manage their money well be able to purchase one of these expensive cars and receive a substantial rebate check at the end of the year to help with its enormous upfront costs.  Everyone else would fall in between these two extremes.  This method then eliminates the rebates the government gives out on the car upfront and spreads out the savings to the places it really needs to go.  The only way we are going to get hybrids and electric cars into everyone's hands is to help people who cannot afford them otherwise.  I am not saying buying them for them but a program like above to really reward people for buying the right car and then driving it right.
    Hows that for something radical?  And no its not socialistic and moving money from the rich to the poor.  The rich can still get great discounts on fuel for purchasing the correct car.  It basically moves money from the people who waste it to the people that want to save it.

  • Cxdddnhw

    So you're proposing that the poorest in society (who can only afford a 10 year old gas guzzler) pay the most at the pump? Also how would you get the pump to 'know' how many MPG your car got? If the guy who works at the gas station is a friend of mine, he'll type in that I drive a 150 MPG car (even if I pull up in a hummer). Your system is flawed and far too open to abuse.

    It's better if we use up all the oil now, so that we're forced to use other fuel sources. So long as there's a cheaper/easier alternative people won't switch.