What would you do with the money if you saved £1,100 on your energy bill? That question led me on a journey that completely changed the way I approached climate change policy.
In 2007 I confronted this question when I helped to update the monitoring at BedZED, the UK’s first large scale zero carbon housing development.
The people living there were a fairly ordinary mix of Londoners – social tenants, key workers, home owners – and few were dedicated environmentalists. It’s an experiment in nudging ordinary people towards low carbon lifestyles.
We found that their energy bills were slashed by energy efficiency measures, some of which you may be able to spot in my photo below. At today’s prices, the average BedZED resident was saving over £1,100 per year compared to the average resident in the local area, Sutton, in south west London.
This is meant to be a great thing. Insulate your home and save money! You’ll often read that the purse or wallet is the best way to motivate environmentally friendly change.
So what did those BedZED residents do with the extra money? We didn’t ask, so couldn’t be sure. But I strongly suspect it was connected to the fact that a lot of them went on more holidays. The average BedZED resident flew more than three times as much as the average Sutton resident. Even the lower income social housing tenants flew more than the Sutton average. The carbon emissions from their flights cancelled out many of the carbon reductions from energy efficient homes, lower car usage and lower waste.
As a result, the average resident’s carbon footprint was only 12% lower than the local average, compared to a 46% reduction for a theoretical keen resident who made low carbon lifestyle choices, such as resisting the foreign holiday temptation.
This problem is one example of the rebound effect. If you save people money in the process of reducing their carbon emissions, they will spend that money somewhere else, usually on something causing more carbon emissions.
Tackling climate change can seem so straightforward. Insulate homes, stick up solar panels, switch to electric cars and hey presto! Climate change averted.
But the rebound effect shows that it really isn’t easy at all. It raises all sorts of other interesting questions, such as what exactly people can spend their disposable income on without the huge environmental impacts, and whether we can persuade people to value those things, or whether we all need to be poorer.
By 2010 I was working for the Greens at London’s City Hall, scrutinising – among other things – the Mayor’s home insulation programme. It was based on a successful model pioneered by the Greens in Kirklees, and was supposed to get over one million homes insulated by 2015.
But as I talked to council officers who were delivering it, I heard of austerity cuts and a lack of political will fatally undermining the programme. Some told me of eye-watering costs for certain buildings, paying for insurance, scaffolding and other costs that weren’t a big feature in Kirklees but kept cropping up in London’s complex housing stock. Home visits to promote free insulation measures yielded a miserably low follow-through – most people decline.
In later years the Government introduced the Green Deal, a policy my wife and several ex-colleagues had helped to pilot and develop in its early days under the last Labour government. Again, a model we hoped would insulate the ‘hard to treat’ homes fell apart when it was implemented by a government and councils that lacked the political will. Worse, even when the deal for home owners was sweetened, few showed much enthusiasm. The thought of clearing out the loft is enough to put many people off tackling climate change, even if it saves them money and makes their home much warmer!
So the idea that we can simply insulate every home in Britain with some cash and a good policy is a fantasy. I came to the conclusion that it will only happen if we force people.
I have worked on climate change for the past 12 years. When at BedZED I learned the conventional technocratic approach to climate change policy – quantifying the impacts of different policies, going for the low hanging fruit or big hitters, and ensuring everything adds up in a balanced carbon budget. But in those 12 years I’ve seen how this tends to let politicians, including some Greens, off the hook. They construct rational strategies with carbon budgets that add up, and assume that it’s therefore all in hand so they can get back to the important stuff.
They even say: we can take a decision which will increase emissions because theoretically if we do x, y and z to further reduce emissions it would all fit within the carbon budget, and that decision has big social or economic benefits.
This is the argument for building a new runway at Heathrow or Gatwick airport. They address the environmental concerns, so they can focus on jobs and growth. The Climate Change Committee thinks a 60% growth in flights is possible if significant advances in technology are realised, deeper cuts are achieved from homes and workplaces, and a politically toxic carbon tax is implemented to control demand (it would likely mean an extra £100 to fly to Ibiza or £580 to Shanghai).
On their own, these are heroic assumptions. Once you consider, also, that we are failing to implement existing policies to their full effect, and that those policies don’t factor in the rebound effect, the conclusion that we can safely expand airports looks flawed. When you consider the devastating economic, social and environmental damage that will result from runaway climate change, the conclusion looks reckless.
I realise I no longer approach climate change in the rational, technocratic way I learned at BedZED. I now think about the likelihood of a policy being politically acceptable, the chances of fully implementing it, and the potential rebound effects. I think about the potential for policies that might – according to carbon accounting – seem small in impact, but which might unlock political space for much more significant changes. I think about red lines that we need to draw, such as blocking airport expansion and fracking, not because it’s inconceivable that they could be part of a theoretical carbon budget, but because that budget is politically unrealistic or problematic.
But it’s difficult to then persuade people of those apparently small impact policies, those red lines, because I only arrived at this way of thinking after an unexpected journey, starting with the monitoring work at BedZED and encompassing years of work, books, discussions and activism.
In my work, trying to build political alliances for Green policies, I have to blend radicalism with pragmatism. There are those who deny climate change is even a problem; they’re a waste of my time. Most accept the consensus view but are principally interested in other issues – in tackling inequality, racism or government red tape – and so seek reassurance that strategies and policies are in place to deal with it, so they can concentrate on their interests. Those are typically the people persuaded that we can expand airports, build big new roads, frack the countryside, ‘so long as environmental issues are taken into account’.
The political challenge for Greens is therefore to discomfort those people, to find ways to persuade them that it isn’t so straightforward and that they must accept some apparently odd choices: that fossil fuels must stay in the ground even if we put up solar panels, and we cannot build roads and airports that might increase greenhouse gas emissions.
I think it is a fascinating blog. I totally agree. Part of the problem with trying to use money ‘economics’ to fix the environment is that money is very hard thing to understand itself. Day today we treate it like a it has a fix value, but that value actually changes over time. So any ‘we save you money policy’ needs to really look at the detail of how money effect behavour. It is quite well know that people who get a financial windfall, tend to spend the money badly, interms of their own self interrest. let alone the plantes.
This is really interesting. Your basic question is how people allocate marginal spending power, and it the fundamental subject of (micro) economics. There’s a lot that standard micro economics skips , such as how people behave politically, rather than as consumers, and that utility maximising is simplistic. But now behaviour economics is taking a more evidence based approach to human behaviour. It should also be possible to use evidence properly in thinking about the sociological & anthropological effects.
None of which is reason for abandoning the technological basics – they just have to be combined with a realistic model of human behaviour. As such, carbon pricing is, I suggest, the most effective policy.
I agree it’s the most effective, but I’m not convinced of the likelihood of any UK government deciding to implement it in the next decade or so, let alone implementing it on an international level.
Look at the populist cuts the government has made to green energy policies to assuage public anger about energy prices. Just imagine how long a government would last if it doubled them, tripled the price of flights, etc.
A friend suggested to me yesterday that people might settle down if you could decrease housing costs in line with the increasing cost of consumer goods. He likes to point out that two generations ago housing was cheap, food, clothes etc. were a bit more pricey and consumer goods like clothing and microwaves and foreign holidays very expensive. Today the situation has flipped. What if we reversed it? (If such a feat were even possible).
If you agree that carbon pricing is the most effective policy for controlling climate change, then I’d suggest you’re far from having abandoned a technocratic approach – and nor should you. Re the politics, there really is no alternative but to argue the science. That may not be the easy way to win votes, although the current strength of Greens shows it has some appeal. However, it is the *only* way to argue to those whose with a general evidence based approach to problems. This may be a minority, but it is a very powerful one in leading public opinion.
I take your point about the political costs of policies which would price people out of cheap holidays, but we still need to we get the structures for pricing carbon emissions in place sooner rather than later.
Your friend is wrong about changing the relative pricing of housing and other consumer goods making people settle down. It is very easy to say what could change this – just increase the supply of housing enough. This would increase the spending power of the current Generation Rent, and they would use it, among other things, to travel the world.
Tim, Tom, I am, I hope said friend.
Tim, your response presupposes that the cost of carbon isn’t factored into travel. If, hypothetically housing costs and rail costs halved but flights flights increased ten-fold then I’d expect to see some rebound effect but not to the extent you’re suggesting.
Also, there’s something in there about needing to find positive ways to enable people to live low carbon lifestyle. A low cost housing, less work but high cost consumption/travel lifestyle could conceivably be that; the most effective way to save carbon would be to utterly tank the economy but who realistically would want to do that?
Hi Tom! You have highlighted an important challenge for all of us working in the sector.
It was great to work with you when you were at Bioregional. I’m still living here at BedZED and we still have our main office here so we keep a continuing eye on whether us BedZEDers are living a sustainable life. As you know the approach taken at BedZED was always a very people centred one, which we then systematised in our One Planet Living approach and ten principles. Our mantra is “make it easy to do the right thing and difficult to do the wrong thing”. So this situation comes about because although it’s easy to save money on energy use at BedZED, it is also too cheap and easy to book a budget flight!
One approach to tackle the rebound effect which does seem to make a difference is giving people feedback and information. After we presented those very results of BedZED seven years on to residents, a few months later one of my neighbours said to me “you’ll be pleased to know we took the train rather than the plane to go home to Ireland to see our relatives after hearing your talk”. People do continue to save carbon and live a sustainable lifestyle here, monitoring results (just out and as yet unpublished) of 20% of residents here at BedZED show for example, a continuing 50% reduction in carbon emissions related to car use because it’s easy to use non-car based options here, with public transport, walking and use of car clubs and cycling.
Is there a way we can create policy approaches that combine easy to do the right thing, difficult to do the wrong thing and feedback?
That’s good to hear about the changing attitudes at BedZED. I wonder whether the residents’ values have also changed at all? Ultimately I think people need to value material goods less, and experiences far more, for a carbon pricing policy to become politically acceptable. That’s where my journey has taken me so far – realising that many of the brilliant ideas I came across in BioRegional just don’t sell once you get into City Hall, let alone my local town hall in Bromley! Meanwhile we’re fighting a rearguard action against boneheaded policies with cross-party support that would increase carbon emissions, as I mention in my article.
I wander if there is a reductionist way of talking about these issues that will cut through with a large number of people?
Apparently M Thatcher, would talk about government and use the metaphor of a household income. ‘don’t spend more than you earn’.
Perhaps, a house hold metaphor for the environment will work for us. If you want to loose weight don’t keep sweets in your house. If you want to do more running, leave your running clothes near the head of your bed, so you see them as soon as you wake up.
If you want people to fly less don’t build airports. If you want the to walk and cycle more, build bike paths and tree lined pavements. simples!
[…] which would have the knock-on effect of reducing investment in insulation and renewable energy. As I wrote last month, citizens would doubtless spend their savings on more carbon-intensive holidays or consumer […]
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