Behavior and Energy Policy

Investment in scalable, non–price-based behavioral interventions and research may prove valuable in improving energy efficiency. Many countries devote substantial public resources to research and development (R&D) for energy-efficient technologies. Energy efficiency, however, depends on both these technologies and the choices of the user. Policies to affect these choices focus on price changes (e.g., subsidies for energy-efficient goods) and information disclosure (e.g., mandated energy-use labels on appliances and autos). We argue that a broader approach is merited, one that draws on insights from the behavioral sciences. Just as we use R&D to develop “hard science” into useful technological solutions, a similar process can be used to develop basic behavioral science into large-scale business and policy innovations. Cost-effectiveness can be rigorously measured using scientific field-testing. Recent examples of scaling behaviorally informed R&D into large energy conservation programs suggest that this could have very high returns.