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Sustainable Business

The importance of behavioural change in reaching net zero

02 Mar 2021

Wind farm at sunset

The release of the Climate Change Committee’s (CCC) 6th Carbon Budget (6CB) early December 2020 was like Christmas come early for those like me working in energy policy research and data analysis. I am not sure I will ever manage to get through the swathes of supporting policy papers produced alongside the report and the level of detail released in the underlying dataset will, I am sure, provide assumptions and inputs that I will be using for many years to come. However, the CCC’s ‘deep dive’ webinar into buildings highlighted a key theme that is perhaps harder to quantify and predict: the importance of behavioural change in reaching net zero.  

Whilst the CCC’s central ‘Balanced Net Zero Pathway’ takes judgements on what is achievable to produce the core analysis for the 6CB, it has also developed four other scenarios for reaching net zero: 

  1. ‘Headwinds’ – low amounts of societal and behavioural change and innovation
  2. ‘Widespread Engagement’ – higher levels of societal and behavioural change
  3. ‘Widespread Innovation’ – greater success in reducing the costs of low-carbon technologies
  4. ‘Tailwinds’ – higher levels of success on societal and behavioural change and innovation

According to the CCC, the impact of the societal and behavioural change differences between the scenarios has some big implications for the deployment of certain technologies. For example, the number of heat pumps installed by 2050 varies from 26.5 million units under the Widespread Engagement pathway to 8.2 million units under the Headwinds pathway. What is clear though is that consumer engagement and societal and behavioural change is vital to the pace of change needed to reach net zero under all these scenarios. Policy design must therefore have a strong consideration for and be designed around the research done into behavioural economics to ensure that the chance of this change occurring is maximised.  

Using behavioural insights (or ‘nudges’) have been shown to be a powerful policy tool that when designed carefully could lead to services that consumers can use in an easier, more effective and pleasant way. A classic example of this was through HMRC, who included in their letter to people with overdue tax payments a carefully crafted sentence that simply highlighted the fact that most people pay their tax on time. This use of social norms is powerful. Tax payments from those that received this letter increased by 15%, bringing forward £200m a year in revenue from a change that cost a comparatively miniscule amount1,2.    

Social norms are not the only nudge that should be in the policy maker’s arsenal. Since being set-up in 2010 as part of the cabinet office, the Behavioural Insights Team (BIT) have had many successes. They have developed into a “social purpose company” and their expertise is utilised across the globe.  

Their success follows the principles and ideas that they summarise in the ‘EAST’ framework. The BIT recommend, based on their own experience, that if you want to encourage a behaviour you need to make it Easy, Attractive, Social and Timely (EAST)3.

    1. Make it Easy
      • Harness the power of defaults, as we have a ‘status quo bias’ to stick with the pre-set option and so making it a default choice makes it more likely to be adopted. We have a great tendency to like what we are used to (e.g. gas boilers) and it is making the switch (e.g. to heat pumps) that is difficult, but once we have made the switch, we get used to it quickly.  
      • Reduce the hassle of taking up a service by minimising the effort needed (maybe something the Green Homes Grant could have benefitted from…).
      • Simplify messages by breaking down complex goals into simpler, easier actions. 
    2. Make it Attractive
      • We are more likely to do something when are attention is drawn to it (keep up the good work Greta!). 
      • Design rewards and sanctions for maximum effect, where financial incentives are often highly effective.
    3. Make it Social
      • We like to do what others are doing, so show that most people are performing the desired behaviour. However, this can work in reverse if reinforcing problematic behaviour. 
      • Use the power of networks to enable collective action (e.g. local decarbonisation plans). 
      • Encourage people to make a commitment to others to lock ourselves into doing something in advance.
    4. Make it Timely 
      • Prompt people when they are likely to be most receptive, doing so is generally easier when the habits have already been disrupted (e.g. boiler has broken down and needs replacing).  
      • Consider the immediate costs and benefits, as we are more influenced by the costs and benefits that are happening now than those that happen in the future (maybe a strength of the Green Homes Grant).  
      • Help people to plan their response, prompting people to make their intentions their actual behaviour. 

The CCC has made it clear that behavioural change is going to be needed to some extent in reaching net zero and so policy developments should be finely tuned into these recommendations and developed with these behavioural traits in mind. This will take new ideas and ingenuity. 

Last year was particularly challenging but noted a lot of new sustainable policy targets. I am hopeful that more changes will follow throughout the course of this year, and that we will see further progressive and innovative policy developed, hopefully with these behavioural insights in mind.

[1] The ‘nudge unit’: the experts that became a prime UK export | Thinktanks | The Guardian

[2] 10 Examples of Nudge Theory (skipprichard.com)

[3] BIT-Publication-EAST_FA_WEB.pdf (behaviouralinsights.co.uk)

Blog by Rory Mathews, Senior Economic Analyst at Gemserv

Contact: Rory Mathews

Rory.Mathews@gemserv.com

Gemserv.com

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