Skip to main content
SpringerLink
Log in

Purchasing Energy-Efficient Appliances – To Incentivise or to Regulate?

  • Chapter
  • First Online:
Environmental Law and Economics

Part of the book series: Economic Analysis of Law in European Legal Scholarship ((EALELS,volume 4))

  • 1257 Accesses

Abstract

Making energy use more sustainable and climate friendly requires a lot of different measures. Stopping the growth of private households’ energy demand is one of them, and increasing the energy efficiency of electric appliances which private households purchase may be helpful in this respect. This paper identifies key reasons which hinder even environmentally friendly private households from buying energy-efficient appliances . If information about the energy efficiency of devices would be more available, better accessible and more credible, a lot could be gained. Therefore, energy labels seem to be important to change private households’ purchasing behaviour. The variety and impacts of different energy labels are studied. Incentivizing labels , indicating financial savings from energy efficient appliances, seem to be a promising instrument. The results from various empirical studies are presented and supplemented by results from an online experiment, conducted with a Swiss retailer for electric appliances . Conditions under which incentivizing labels are preferable to regulation are explored.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 169.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 219.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 219.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    BAFU 2014; WIKI Bildungsserver 2013.

  2. 2.

    Energybrain 2014; BAFU 2014; CSR 2014; Euresa 2011.

  3. 3.

    Chandler and Brown 2009; EPRI 2009; National Academy of Sciences 2009; Granade et al. 2009; McKinsey & Company 2009; Creyts et al. 2007; or Rosenfeld et al. 1993 for a meta-analysis of earlier studies.

  4. 4.

    Hirst and Brown 1990; Jaffe and Stavins 1994.

  5. 5.

    Allcott and Greenstone 2012.

  6. 6.

    for reviews of the relevant literature see e.g. Tietenberg 2009, Gillingham et al. 2006 and Abrahamse et al. 2005.

  7. 7.

    as presented in Epper et al. 2011, p. 2.

  8. 8.

    DEFRA 2010, p. 15.

  9. 9.

    Hausman 1979.

  10. 10.

    Gillingham and Palmer 2013.

  11. 11.

    Jaffe et al. 2004.

  12. 12.

    Loewenstein et al. 2001; Weber 2006.

  13. 13.

    Leiserowitz 2007; Lorenzoni et al. 2007; Leiserowitz et al. 2006; Lorenzoni and Pidgeon 2006.

  14. 14.

    Thaler 1985.

  15. 15.

    Attari et al. 2010; Gardner and Stern 2008; Larrick and Soll 2008.

  16. 16.

    Cerulo 2006; Norgaard 2006.

  17. 17.

    Allcott and Taubinsky 2014.

  18. 18.

    Jungermann et al. 2005, pp. 173.

  19. 19.

    Metcalf and Hassett 1999; Hassett and Metcalf 1993.

  20. 20.

    Greene 2011.

  21. 21.

    See e.g. Kahneman et al. 1991.

  22. 22.

    Greene 2011.

  23. 23.

    Anderson 2003; DEFRA 2010.

  24. 24.

    Prisoners’ Dilemma, Kerr 1983.

  25. 25.

    Larrick and Soll 2008.

  26. 26.

    Handgraaf et al. 2013; Schultz et al. 2007.

  27. 27.

    Andreoni 1990; Andreoni 1995.

  28. 28.

    Masclet et al. 2003, Bicchieri 2006.

  29. 29.

    Thaler and Sunstein 2008.

  30. 30.

    EWZ 2007.

  31. 31.

    Allcott and Mullainathan 2010; Dinner et al. 2009.

  32. 32.

    Dinner et al. 2009.

  33. 33.

    Iyengar et al. 2006; Fasolo et al. 2009; Alberini et al. 2013.

  34. 34.

    Golove and Eto 1996.

  35. 35.

    Thaler 1985.

  36. 36.

    Allcott and Greenstone 2012, p. 19.

  37. 37.

    Allcott and Taubinsky 2014, p. 3.

  38. 38.

    Allcott and Taubinsky (2014).

  39. 39.

    Rohling and Schubert 2013.

  40. 40.

    See Wiel and McMahon 2005.

  41. 41.

    Banerjee and Solomon 2003.

  42. 42.

    European Parliament 1992.

  43. 43.

    European Parliament 2010.

  44. 44.

    McNeill and Wilkie 1979; Newell and Siikamäki 2014; Kalbekken et al. 2013.

  45. 45.

    see e.g. Camilleri and Larrick 2013 or Burson et al. 2009.

  46. 46.

    Hutton and Wilkie 1980; Heinzle 2012.

  47. 47.

    Heinzle 2012; Waechter et al. 2014.

  48. 48.

    Heinzle and Wüstenhagen, 2012; Meissner et al. 2013.

  49. 49.

    Heinzle 2012.

  50. 50.

    Rohling and Schubert 2013.

  51. 51.

    Anderson and Claxton 1982.

  52. 52.

    Heinzle 2012.

  53. 53.

    Kallbekken et al. 2013.

  54. 54.

    EIT 2013.

Bibliography

  • Abrahamse, W., L. Steg, C. Vlex, and T. Rothengatter. 2005. A Review of Intervention Studies Aimed at Household Energy Conservation. Journal of Environmental Psychology 25: 273–291.

    Article  Google Scholar 

  • Alberini, A., S. Banfi, and C. Ramseier. 2013. Energy Efficiency Investments in the Home: Swiss Homeowners and Expectations about Future Energy Prices. The Energy Journal 34: 49–86.

    Article  Google Scholar 

  • Allcott, H., and M. Greenstone. 2012. Is There an Energy Efficiency Gap? Journal of Economic Perspectives 26(1): 3–28.

    Article  Google Scholar 

  • Allcott, H., and S. Mullainathan. 2010. Behavior and Energy Policy. Science 327: 1204–1205.

    Article  Google Scholar 

  • Allcott, H., and D. Taubinsky. 2014. The lightbulb paradox: Using behavioral economics for policy evaluation, NBER Working Paper (19713).

    Google Scholar 

  • Anderson, C.J. 2003. The Psychology of Doing Nothing: Forms of Decision Avoidance Result from Reason and Emotion. Psychological Bulletin 129(1): 139–167.

    Article  Google Scholar 

  • Anderson, C.D., and J.D. Claxton. 1982. Barriers to Consumer Choice of Energy-Efficient Products. Journal of Consumer Research 9(2): 163–170.

    Article  Google Scholar 

  • Andreoni, J. 1995. Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments. The Quarterly Journal of Economics 110(1): 1–21.

    Article  Google Scholar 

  • ———. 1990. Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving? Economic Journal 100(401): 464–477.

    Article  Google Scholar 

  • Attari, S.Z., M.L. DeKay, C.I. Davidson, and W.B. de Bruin. 2010. Public Perceptions of Energy Consumption and Savings. Proceedings of the National Academy of Sciences of the United States of America 107(37): 16054–16059.

    Article  Google Scholar 

  • BAFU. 2014. Entwicklung der Treibhausgasemissionen in den einzelnen Sektoren. Available online at http://www.news.admin.ch/NSBSubscriber/message/attachments/34423.pdf. Visited on 15 Dec 2014.

  • Banerjee, A., and B.D. Solomon. 2003. Ecolabeling for Energy Efficiency and Sustainability: A Meta-evaluation of US Programs. Energy Policy 31(2): 109–123.

    Article  Google Scholar 

  • Bicchieri, C. 2006. The Grammar of Society: The Nature and Dynamics of Social Norms. Cambridge: Cambridge University Press.

    Google Scholar 

  • Bostrom, A., R.E. O’Connor, G. Böhm, D. Hanss, O. Bodi, F. Ekström, P. Halder, S. Jeschke, B. Mack, M. Qu, L. Rosentrater, A. Sandve, and I. Sælensminde. 2012. Causal Thinking and Support for Climate Change Policies: International Survey Findings. Global Environmental Change 22: 210–222.

    Article  Google Scholar 

  • Burson, K., R. Larrick, and J.J. Lynch. 2009. Six of One, Half Dozen of the Other: Expanding and Contracting Numerical Dimensions Produces Preference Reversals. Psychological Science 20: 1074–1078.

    Article  Google Scholar 

  • Camilleri, A.R., and R.P. Larrick. 2013. Metric and Scale Design as Choice Architecture Tools, Journal of Public Policy & Marketing.

    Google Scholar 

  • Cerulo, K. 2006. Never Saw It Coming: Cultural Challenges to Envisioning the Worst. Chicago: University of Chicago Press.

    Book  Google Scholar 

  • Chandler, S.J. and M.A. Brown. 2009. Meta-Review of Efficiency Potential Studies and Their Implications for the South, Georgia Tech Ivan College of Public Policy Working Paper (51).

    Google Scholar 

  • Creyts, J., A. Derkach, S. Nyquist, K. Ostrowski, and J. Stephenson. 2007. Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?, McKinsey & Company.

    Google Scholar 

  • CSR Academy. 2014. Reducing Carbon Emissions in Everyday Life, eds. Schuldt-Baumgart, N. and E. Stiess. Website, Available online at http://csr-manager.org/en/agenda/Dossiers/Climate-Change/Reducing-Carbon-Emissions-in-Everyday-Life.php. Visited on 15 Dec 2014.

  • DEFRA. 2010. Behavioural Economics and Energy-Using Products: Scoping Research on Discounting Behaviour and Consumer Reference Points, DEFRA Research Report.

    Google Scholar 

  • Dinner, I., E.J. Johnson, D.G. Goldstein, and K. Liu. 2009. Partitioning Default Effects, Why People Choose Not to Choose, Working Paper. Rochester: Social Science Research Network.

    Google Scholar 

  • EIT. 2013. Encouraging a Greener Lifestyle at Home and at Work – Case Study. Climate – KIC, 21313 CK_CaseStudy_Off4Firms. Indd, 09/10/2013.

    Google Scholar 

  • Energybrain. 2014. Stromverbrauch in Schweizer Haushalten. Website, Available online at http://energybrain.ch/konsumentinnen/konsumentinnen.asp. Visited on 15 Dec 2014.

  • Epper, T., H. Fehr-Duda, and R. Schubert. 2011. Energy-Using Durables: The Role of Time Discounting in Investment Decisions, IED Working Paper (16).

    Google Scholar 

  • EPRI. 2009. Assessment of Achievable Potential from Energy Efficiency and Demand Response Programs in the US 2010-2030, Electric Power Research Institute.

    Google Scholar 

  • Euresa. 2011. Causes of CO 2 in the households. Website, Available online at http://www.euresa.org/index.php?id=1140&L=1. Visited on 15 Dec 2014.

  • European Parliament. 1992. Directive 92/75/EEC, Official Journal of the European Union, European Union.

    Google Scholar 

  • ———. 2010. Directive 2010/30/EU, Official Journal of the European Union, European Union.

    Google Scholar 

  • EWZ – Elektrizitätswerk der Stadt Zürich. 2007. Ökologisch! Oder konventionell? Die Wahl Ihres persönlichen Stromprodukts hat viel bewirkt, Broschüre zur Tarifumstellung, Zürich: EWZ.

    Google Scholar 

  • Fasolo, B., F.A. Carmeci, and R. Misuraca. 2009. The Effect of Choice Complexity on Perception of Time Spent Choosing: When Choice Takes Longer But Feels Shorter. Psychology and Marketing 26(3): 213–228.

    Article  Google Scholar 

  • Gabaix, X., and D. Laibson. 2006. Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets. The Quarterly Journal of Economics 121(2): 505–540.

    Article  Google Scholar 

  • Gardner, G.T., and P.C. Stern. 2008. The Short List – The Most Effective Actions US Households Can Take to Curb Climate Change. Environment 50(5): 12–24.

    Google Scholar 

  • Gillingham, K., R.G. Newell, and K. Palmer. 2006. Energy Efficiency Policies: A Retrospective Examination. Annual Review of Environment and Resources 31: 161–192.

    Article  Google Scholar 

  • Gillingham, K., and K. Palmer. 2013. Bridging the energy efficiency gap, Discussion Paper.

    Google Scholar 

  • Golove, W.H., and J.H. Eto. 1996. Market Barriers to Energy Efficiency: A Critical Reappraisal of the Rationale for Public Policies to Promote Energy Efficiency, LBL-38059. Berkeley: Lawrence Berkeley National Laboratory.

    Book  Google Scholar 

  • Granade, H.C., J. Creyts, A. Derkach, P. Farese, S. Nyquist, and K. Ostrowski. 2009. Unlocking Energy Efficiency in the U.S. Economy, McKinsey & Company.

    Google Scholar 

  • Greene, D.L. 2011. Uncertainty, Loss Aversion, and Markets for Energy Efficiency. Energy Economics 33: 608–616.

    Article  Google Scholar 

  • Handgraaf, M.J.J., M.A. Van Lidth de Jeude, and K.C. Appelt. 2013. Public Praise vs. Private Pay: Effects of Rewards on Energy Conservation in the Workplace. Ecological Economics 86: 86–92.

    Article  Google Scholar 

  • Hassett, K.A., and G.E. Metcalf. 1993. Energy Conservation Investment. Energy Policy 21(6): 710–716.

    Article  Google Scholar 

  • Hausman, J.A. 1979. Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables. The Bell Journal of Economics 10(1): 33–54.

    Article  Google Scholar 

  • Heinzle, S.L. 2012. Disclosure of Energy Operating Cost Information: A Silver Bullet for Overcoming the Energy-Efficiency Gap? Journal of Consumer Policy 35(1): 43–64.

    Article  Google Scholar 

  • Heinzle, S.L., and R. Wüstenhagen. 2012. Dynamic Adjustment of Eco- Labeling Schemes and Consumer Choice—The Revision of the EU Energy Label as Missed Opportunity? Business Strategy and the Environment 21(1): 60–70.

    Article  Google Scholar 

  • Hirst, E., and M. Brown. 1990. Closing the Efficiency Gap: Barriers to the Efficient Use of Energy. Resources, Conservation and Recycling 3: 267–281.

    Article  Google Scholar 

  • Howarth, R.B., and A.H. Stanstad. 1995. Discount Rates and Energy Efficiency. Contemporary Economic Policy 13(3): 101–109.

    Article  Google Scholar 

  • Hutton, R.B., and W.L. Wilkie. 1980. Life Cycle Cost: A New Form of Consumer Information. Journal of Consumer Research 6: 349–360.

    Article  Google Scholar 

  • Iyengar, S.S., R.E. Wells, and B. Schwartz. 2006. Doing Better But Feeling Worse. Looking for the “Best” Job Undermines Satisfaction. Psychological Science 17(2): 143–150.

    Article  Google Scholar 

  • IPCC. 2014. Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, eds. O. Edenhofer, R. Pichs-Madruga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. Savolainen, S. Schlömer, C. von Stechow, T. Zwickel and J.C. Minx. Cambridge/New York: Cambridge University Press.

    Google Scholar 

  • Jaffe, A.B., R.G. Newell, and R.N. Stavins. 2004. Economics of Energy Efficiency. Encyclopedia of Energy 2: 79–90.

    Article  Google Scholar 

  • Jaffe, A.B., and R.N. Stavins. 1994. The Energy-Efficiency Gap – What Does It Mean? Energy Policy 22(10): 804–810.

    Article  Google Scholar 

  • Jungermann, H., H.-R. Pfister, and K. Fischer. 2005. Die Psychologie der Entscheidung. Eine Einführung. 2nd edn. München.

    Google Scholar 

  • Kahneman, D., J.L. Knetsch, and R.H. Thaler. 1991. Anomalies: The Endowment Effect, Loss Aversion, and the Status Quo Bias. The Journal of Economic Perspectives 5(1): 193–206.

    Article  Google Scholar 

  • Kerr, N.L. 1983. Motivation Losses in Small Groups: A Social Dilemma Analysis. Journal of Personality and Social Psychology 45(4): 819–828.

    Article  Google Scholar 

  • Larrick, R.P., and J.B. Soll. 2008. The MPG Illusion. Science 320: 1593–1594.

    Article  Google Scholar 

  • Leiserowitz, A. 2007. American Opinions on Global Warming, A Yale-Gallup-ClearVision Institute Poll. New Haven: Yale School of Forestry and Environmental Studies.

    Google Scholar 

  • Leiserowitz, A., R. Kates, and T. Parris. 2006. Sustainability Values, Attitudes, and Behaviors: A Review of Multinational and Global Trends. Annual Review of Environment and Resources 31: 413–444.

    Article  Google Scholar 

  • Loewenstein, G., E. Weber, C. Hsee, and E. Welch. 2001. Risk as Feelings. Psychol. Bulletin 127: 267–286.

    Article  Google Scholar 

  • Lorenzoni, I., S. Nicholson-Cole, and L. Whitmarsh. 2007. Barriers Perceived to Engaging with Climate Change Among the UK Public and Their Policy Implications. Global Environmental Change: Human and Policy Dimensions 17(3-4): 445–459.

    Article  Google Scholar 

  • Lorenzoni, I., and N.F. Pidgeon. 2006. Public Views on Climate Change: European and USA Perspectives. Climatic Change 77(1-2): 73–95.

    Article  Google Scholar 

  • Masclet, D., C. Noussair, S. Tucker, and M.-C. Villeval. 2003. Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism. The American Economic Review 93(1): 366–380.

    Article  Google Scholar 

  • McKinsey & Company. 2009. Pathways to a Low-Carbon Economy: Version 2 of the Global Greenhouse Gas Abatement Curve. McKinsey & Company.

    Google Scholar 

  • Meissner, M., S. Heinzle, and R. Decker. 2013. Not Worth the Extra Cost? Diluting the Differentiation Ability of Highly Rated Products by Altering the Meaning of Rating Scale Levels. Journal of Consumer Behaviour 12(3): 223–231.

    Article  Google Scholar 

  • Metcalf, G.E., and K.A. Hassett. 1999. Measuring the Energy Savings from Home Improvement Investments: Evidence from Monthly Billing Data. Review of Economics and Statistics 81(3): 516–528.

    Article  Google Scholar 

  • National Academy of Sciences. 2009. Real Prospects for Energy Efficiency in the U.S. Washington, DC: National Academies Press.

    Google Scholar 

  • Newell, R., and J. Siikamäki. 2014. Nudging Energy Efficiency Behavior: The Role of Information Labels. Journal of the Association of Environmental and Resource Economists 1(4): 555–598.

    Article  Google Scholar 

  • Norgaard, K.M. 2006. We Don’t Really Want to Know: Environmental Justice and Socially Organized Denial of Global Warming in Norway. Organization and Environment 19: 347–370.

    Article  Google Scholar 

  • Rohling, M., and Schubert, R. 2013. Energy Labels for Household Appliances and Their Disclosure Format: A Literature Review, IED Working Paper (21).

    Google Scholar 

  • Rosenfeld, A., C. Atkinson, J. Koomey, A. Meier, R.J. Mowris, and L. Price. 1993. Conserved Energy Supply Curves for U.S. Buildings. Contemporary Policy Issues 11(1): 45–68.

    Article  Google Scholar 

  • Schubert, R., and M. Stadelmann. 2015. Energy-Using Durables – Why Consumers Refrain from Economically Otimal Choices. Frontiers in Energy Research 3(7).

    Google Scholar 

  • Schultz, P.W., J.M. Nolan, R.B. Cialdini, N.J. Goldstein, and V. Griskevicius. 2007. The Constructive, Deconstructive and Reconstructive Power of Social Norms. Psychological Science 18(5): 429–434.

    Article  Google Scholar 

  • Thaler, R.H. 1985. Mental Accounting and Consumer Choice. Marketing Science 4: 199–214.

    Article  Google Scholar 

  • Thaler, R.H., and C.R. Sunstein. 2008. Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven: Yale University Press.

    Google Scholar 

  • Tietenberg, T. 2009. Reflections – Energy Efficiency Policy: Pipe Dream or Pipeline to the Future? Review of Environmental Economics and Policy 3(2): 304–320.

    Article  Google Scholar 

  • Train, K. 1985. Discount Rates in Consumers’ Energy-Related Decisions: A Review of the Literature. Energy 10(12): 1243–1253.

    Article  Google Scholar 

  • Waechter, S., B. Sütterlin, and M. Siegrist. 2014. The Misleading Effect of Energy Efficiency Information on Perceived Energy Friendliness of Electric Goods, IED Working Paper.

    Google Scholar 

  • Weber, E.U. 2006. Experience-Based and Description-Based Perceptions of Lont-Term Risk: Why Global Warming Does Not Scare Us (Yet). Climatic Change 77(1–2): 103–120.

    Article  Google Scholar 

  • Wiel, S., and J. McMahon. 2005. Energy – Efficiency Labels and Standards: A Guidebook for Appliances, Equipment, and Lightning, 2 edn, Collaborative Labeling and Appliance Standards Program (CLASP), Washington, DC.

    Google Scholar 

  • Wiki Bildungsserver. 2013. CO 2 -Emissionen durch private Haushalte. Website, Available online at http://wiki.bildungsserver.de/klimawandel/index.php/CO2-Emissionen_durch_private_Haushalte. Visited 15 Dec 2014.

Download references

Author information

Authors and Affiliations

  1. Swiss Federal Institute of Technology (ETH), Zurich, Switzerland

    Renate Schubert

Authors
  1. Renate Schubert
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Renate Schubert .

Editor information

Editors and Affiliations

  1. Faculty of Law, University of Lucerne, Lucerne, Switzerland

    Klaus Mathis

  2. Notre Dame Law School, University of Notre Dame, Notre Dame, Indiana, USA

    Bruce R. Huber

Rights and permissions

Reprints and permissions

Copyright information

© 2017 Springer International Publishing AG

About this chapter

Cite this chapter

Schubert, R. (2017). Purchasing Energy-Efficient Appliances – To Incentivise or to Regulate?. In: Mathis, K., Huber, B. (eds) Environmental Law and Economics. Economic Analysis of Law in European Legal Scholarship, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-50932-7_9

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-50932-7_9

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-50931-0

  • Online ISBN: 978-3-319-50932-7

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

Publish with us

Policies and ethics

Search

Navigation