Markets for Clean Energy…At Added Costs to Willing Consumers?

Published by Taylor on December 14, 2007 in Uncategorized. Comments

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This, if true, is exciting news indeed:

“Data from a new IBM survey reveals we as consumers would be willing to pay more for environmentally friendly energy options if more information could be made available to educate themselves.”

But can we count on–or wait on–consumers to drive the widespread adoption of alternative energy against their immediate, pocketbook interests?

I often wonder about change strategies that are predicated on consumer sacrifice on a broad scale. Nothing would make me happier than a world of consumers hungry to do the right thing at marginal sacrifice…I’m just not as optimistic about that model of change. In my mind, we can incentive good behavior (corporate and consumer) through government regulation (taxes, for instance) or technological innovation (it’ll save you money, stupid)…but rarely, on a grand enough scale to matter, will consumers elect to sacrifice low prices for doing the right thing.* This survey would seem to suggest otherwise, and I hope it’s true. But I worry that this may be a case of survey participants saying what they think their interviewer wants to hear.

*Sometimes, obviously, incentives are bigger than monetary considerations. Like when the fish from China could kill you; or when the coal-fired power plant constructed miles from your home could do the same. (“Health costs related to air pollution total $68 billion a year [in China], nearly 4 percent of the country’s economic output).

(Hat Tip: Eco Geek)

Image used under a Creative Commons license from Flickr user blmurch.

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  • Bruce-- Thanks for commenting! We certainly agree, and you point out a piece of the survey that I intended to mention but failed to: the survey was only taken of individuals in developed countries. In other words, those with the greatest likelihood of being able to sacrifice for cleaner energy AND those with, statistically, the highest education to understand their consumption in environmental terms and the promise of clean energy. I think that makes the survey results you further describe even more troubling: if we hope to one day see India, China, and other growing super powers (and consumers) of the world adopt cleaner energy sources, we have a long way to go setting an example. You're exactly right: consumer sacrifice is not the solution.
  • Bruce
    Hey! Great to hear about the blog, and I’m excited to read everything!

    I’m definitely intrigued by this IBM survey – I think that it would be incredible if people chose against their economic self-interest to be responsible citizens. After examining other results in the survey, though, I am a little more dismayed. 65% of consumers surveyed would sacrifice cost for cleanliness, but over half of those (44% of the total number surveyed) would accept only a 5 percent increase in rates and no more. Although 71% of customers said that environmental impact was important when selecting power sources, many more (87%) said that cost-effectiveness was important as well. Finally, it is easier to care about the environment on a survey than it is to change one’s energy consumption plan. Out of those that knew that their power provider offered renewable energy (31% of those responding), 73% did not purchase that form of energy.

    I think the data are interesting because they show that there is a great deal of environmental awareness in developed countries. Translating that awareness into change, unfortunately, will require more than being a good citizen. Consumer sacrifice is not the solution; the data show, in fact, that most do not sacrifice cost for their environment. Incentives, through government or otherwise, are the most promising steps toward a solution.

    The original source data can be found here:
    2007 IBM Energy and Utilities Global Residential/Small Business Consumer Survey Selected Results.
    http://www-935.ibm.com/services/us/gbs/bus/pdf/...
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