Soaring energy costs mean we are using less , but for how long?

A harsh winter is rapidly coming in Europe. The pressure of inflation already strains the budgets of many households and the conflict within Ukraine is restricting gas and oil supply. At the same time, the demand for these commodities is predicted to grow in the winter months of cold and snow. The consequences could be catastrophic, particularly for those already in the poverty. There is evidence to suggest that some are already reducing their energy consumption to combat the issue. But what amount will they reduce their consumption – and how long will the new methods be in place?

Scientists studying behavior are getting ready to tackle these issues. “It’s an extremely crucial and exciting moment for the conservation of energy,” says Mark Andor, a behavioral economist from the RWI-Leibniz Institute of Economics Research, located situated in Essen, Germany. “There is an abundance of research happening right now.”

Evidence suggests that belt-tightening has already begun. A UK Office for National Statistics survey regarding the crisis in the cost of living discovered that the people of the country are already cutting down on their use of electricity and gas according to Lorraine Whitmarsh, an environmental psychologist at the University of Bath, UK. A study from Germany found an increase of 6% in consumption of natural gas in the months of March and April 1. as well as consumption fell by 29% in the first week of October compared to that same timeframe in 2021.

A short-term solution

The past energy price events, such as the oil crisis of the 1970s, suggests that consumers were more likely to be more focused on immediate cost reduction and less so on long-term investment in energy-saving appliances and infrastructures like efficient heating systems or better insulation, according to Whitmarsh. There aren’t much data available to determine how many people are turning to these investments in the current financial recession. However, Andor says that the capacity to make these changes can be restricted. For instance, heat pumps as well as people equipped to install them are scarce in Germany.

Researchers are also eager to discover what methods can help people save energy. Previous research has proven that getting direct feedback on energy consumption through a meter can increase energy efficiency by 5 to 15 percent. In 2020, a randomized-controlled trial showed that adding appliance-level detail can improve savings by another 5% over aggregate household data. According to Andor, more detailed data could help clarify the misconceptions regarding which appliances consume more energy. “I think that people are scared of the price,” he says. “But they’re confused.”

An economist who studies behavior Madeline Werthschulte at the ZEW-Leibniz Centre for European Economic Research in Mannheim, Germany, says she’d prefer to collaborate with natural gas suppliers to find out more about the types of incentives like small cash rewards for reducing consumption of gas — that can encourage consumers to use less.

Research into behavior is complicated by the policies that every country adopts to mitigate the impact on the situation, according to Andor. “It’s an array of things happening simultaneously,” he says. “If you subsidize the price of energy to assist consumers, then you will have less incentive to conserve energy.”

Do habits change?

If the recent price hikes are any indication, the changes in energy conservation tend to fade fast According to Whitmarsh. “Consumers have cut down on energy consumption, but once prices rise again, their behavior reverts,” she says. “There isn’t anything that is enduring.”

It is possible that a growing awareness of the effects of climate change may alter this trend, she adds. For instance, those who have thought of saving energy to combat climate change may see the current crisis in cost of living as a trigger to make changes and keep them in place for longer than they might have done in the past.

But energy conservation can require sacrifice and is difficult to sustain. “I don’t expect this is the case for every buyer,” says Andor. “People prefer the feeling of being at ease.”


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