INTERVIEW - Behavioural Science for Energy Policies
Behaven — Hi Nives, it’s a pleasure to interview you today! First, can you tell us more about your area of expertise?
NIVES DELLA VALLE — I hold a PhD in Economics, with a specialisation in Behavioural and Experimental Economics, and I work as Scientific Project Officer at the Joint Research Centre (JRC) of the European Commission, the European Commission's science and knowledge service that provides independent scientific advice and support to EU policy. More specifically, I am part of the Energy Efficiency and Renewable Unit, where I conduct policy analysis and apply behavioural economics to energy-relevant policy issues, ranging from energy efficiency to energy poverty.
How do you use behavioural science in that context?
I use the behavioural science lens to understand energy-policy issues directly requested by the Policy DGs or as part of institutional research projects. More particularly, I conduct literature reviews and conduct experiments of which the results inform policy design.
In your opinion, how can behavioural science be used to drive sustainable outcomes?
The greatest contribution of behavioural economics has been to develop a causal framework to model the behaviour of real people, a framework that is not only more realistic and psychologically plausible but also empirically accurate. More particularly, this framework accounts for the fact that we as human beings do not always make decisions that are consistent with our preferences. We have limited cognitive resources, and we care not only about our own well-being but also about the well-being of other people.
In a nutshell, behavioural economics provides a strong contribution not only to the advancement of a more human economic theory but also to policymaking. Policymakers can now use a framework enabling them to better predict the behaviour of real people and the effect of policy interventions. Also, in the context of sustainability policy, policymakers can exploit this framework to design interventions that better account for our systematic biases and are more likely to yield the desired efficacy (i.e. how to increase pro-environmental behaviours? how to ensure that such an increase in pro-environmental behaviours leads to an increase in other untargeted pro-environmental behaviours?).
And what are the challenges and barriers that need to be overcome for that to happen?
Behaviourally-informed interventions are most effective when the actors that are more familiar with the target context implement them, like local decision-makers or civil society organizations. Therefore, in order for these interventions to be truly effective, continuous coordination with local authorities should always be promoted.
Take the policy challenge of energy poverty, a situation in which citizens are unable to meet their energy needs at an affordable cost. Not only this is a multidimensional phenomenon caused by a combination of factors including low income, high energy prices, and low energy efficiency, but is also difficult to identify and quantify, posing a challenge to national decision-makers for the design of targeted policies. In this context, civil society organisations and local actors, who have the knowledge of the local community, can better identify those who are more in need and bridge with experts and national decision-makers to uncover how energy poverty manifests in that specific context and how this should be addressed.
As an example, it might be that many citizens could not meet their energy needs because they are not aware of their energy behaviours. In that specific context, a ‘boosting’ intervention empowering their energy literacy could be then proposed [1]. Collaborative platforms, such as the Energy Poverty Advisory Hub [2], can facilitate this process across local and national decision-makers.
What are the behavioural science solutions that you’ve found most effective in encouraging a move towards the use of green energy?
Defaults are an example of nudges that exploit our tendency to prefer the status quo. These instruments have been used as a way to increase green electricity contracts. Renewable energy sources, rather than grey energy sources, could be set as the default option in electricity contracts. Defaults have been also used as a way to increase access to subsidies to fight energy poverty. In Malta, categories of people identified as in need were automatically enrolled in subsidy programs: this enabled them to save cognitive resources and to benefit from support measures [3].
Other examples include the disclosure of lifetime operation cost information to promote the adoption of energy-efficient appliances. Finally, the introduction of social norms associated with smart meters to promote energy consumption behaviour, wherein tenants receive not only information about their own energy consumption but also about the consumption of their peers [4].
Are there any benefits to academics and practitioners working together?
Definitely, when academics and practitioners engage in a co-production process the former learn how to better translate scientific findings into concrete solutions, and the latter learn how to valorise their close experiences with problems into a problem-solving process that can be monitored and evaluated.
As an example, through the Behavioural Insights units map and projects repository launched by the OECD Observatory of Public Sector Innovation (OPSI) [5], academics, practitioners and policymakers can see how several policy challenges have been already tackled through the application of behavioural insights and be inspired to do the same.
Do you have any suggestions of experts, key papers or books on behavioural science?
The works by Cass Sunstein and Peter John are surely the most fascinating to explore the depth of behavioural science applications. The work by Shafir and Mullainathan ‘Scarcity: Why having too little means so much’ explores the effects of living in scarcity conditions on decision-making and is very relevant to my research on energy poverty. And finally ‘The Grammar of Society’ by Cristina Bicchieri, explores the power of social norms on our behaviour.
[1] Della Valle, Nives, and Siddharth Sareen (2020). Nudging and boosting for equity? Towards a behavioural economics of energy justice. Energy Research & Social Science, 68: 101589.
[2] EPAH: The leading EU initiative on energy poverty https://energy-poverty.ec.europa.eu/about-us/news/epah-leading-eu-initiative-energy-poverty-launching-its-new-website-2021-09-27_en
[3] Della Valle, Nives (2019). People’s decisions matter: understanding and addressing energy poverty with behavioral economics. Energy and Buildings, 204: 109515.
[4] Caballero, Nicolas, and DellaValle, Nives (2021). Tackling energy poverty through behavioral change: A pilot study on social comparison interventions in social housing districts. Frontiers in Sustainable Cities: 66.
[5] OPSI Behavioural Science for Better Policies https://oecd-opsi.org/behavioural-science/
About Cass Sunstein: https://hls.harvard.edu/faculty/directory/10871/Sunstein
About Peter John: https://www.kcl.ac.uk/people/peter-john
‘Scarcity: Why having too little means so much’, Sendhil Mullainathan and Eldar Shafir: https://www.hks.harvard.edu/centers/cid/publications/books/scarcity-why-having-too-little-means-so-much
‘The Grammar of Society’, Cristina Bicchieri: https://www.cambridge.org/core/books/grammar-of-society/2B063E9C9621C2340DEFB2BE15B3AEA5