Convincing consumers
European private households are falling behind businesses in terms of energy conservation. Despite national government measures to encourage greater awareness over the long-term, direct financial incentives seem to be the only functional incentive.
Popular government measures including long-term financial incentives for end-users, subsidies for renewable energies and "soft" awareness campaigns have largely failed to convince households to conserve energy, new research by Roland Berger Strategy Consultants finds. Only the Netherlands and Sweden have noticeably reduced gas and electricity consumption over the past 15 years. But, as Ernst van Duijn, Partner in Roland Berger's London office noted in the context of the "Future of Utilities" Conference, their success stems largely from introducing short-term measures for households. In The Netherlands every household pays a regulatory tax on the amount of energy consumed. "Green" energy thus comes at cheaper price tag.
Generally speaking, measures to increase energy efficiency in households can be either financial or non-financial, and they can be geared towards the households themselves, towards construction companies and contractors and finally towards energy suppliers.
Aside from large businesses, households are one of the two key drivers affecting the future consumption of gas, electricity and water. But while large B2B energy customers, encouraged by pan-European measures like the greenhouse gas emission trading scheme (ETS) or renewables obligation certificates (ROC), have made substantial changes already, individuals seem reluctant to shift their attitudes.
Popular government measures including long-term financial incentives for end-users, subsidies for renewable energies and "soft" awareness campaigns have largely failed to convince households to conserve energy, new research by Roland Berger Strategy Consultants finds. Only the Netherlands and Sweden have noticeably reduced gas and electricity consumption over the past 15 years. But, as Ernst van Duijn, Partner in Roland Berger's London office noted in the context of the "Future of Utilities" Conference, their success stems largely from introducing short-term measures for households. In The Netherlands every household pays a regulatory tax on the amount of energy consumed. "Green" energy thus comes at cheaper price tag.
Generally speaking, measures to increase energy efficiency in households can be either financial or non-financial, and they can be geared towards the households themselves, towards construction companies and contractors and finally towards energy suppliers.
Aside from large businesses, households are one of the two key drivers affecting the future consumption of gas, electricity and water. But while large B2B energy customers, encouraged by pan-European measures like the greenhouse gas emission trading scheme (ETS) or renewables obligation certificates (ROC), have made substantial changes already, individuals seem reluctant to shift their attitudes.
A recent poll revealed that just over 50 percent of consumers say they care about global warming and energy conservation. Even fewer say they would be willing to make personal sacrifices for the good of the planet, by changing their habits or paying additional taxes or fees. Thus, despite the heated debate on climate change, individuals are unlikely to compromise on their standard of living by consuming less energy – unless financially encouraged to do so through direct taxation or other measures that promise direct rewards or that sanction wasteful behavior.
With a supply-demand gap rapidly emerging in the energy sector, both businesses and households will face rising prices. While businesses are engaged in finding alternatives, i.e. investing in renewables research and alternatives to fossil fuel and natural gas, individuals can ill-afford to continue consuming apace. Instead of investments into soft measures, governments in industrialized countries should follow successful examples and reward energy efficient consumer behavior with tangible, short-term rewards.
If you have questions or comments regarding this, or any other article, please do not hesitate to contact us:
With a supply-demand gap rapidly emerging in the energy sector, both businesses and households will face rising prices. While businesses are engaged in finding alternatives, i.e. investing in renewables research and alternatives to fossil fuel and natural gas, individuals can ill-afford to continue consuming apace. Instead of investments into soft measures, governments in industrialized countries should follow successful examples and reward energy efficient consumer behavior with tangible, short-term rewards.
If you have questions or comments regarding this, or any other article, please do not hesitate to contact us:
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