For those of us who pay fuel bills, saving energy by insulating our homes or perhaps installing solar panels seems to make perfect sense. It saves money, therefore as rational human beings why don’t we all do it?
It’s a question that preoccupies Dr Franz Fuerst from the Department of Land Economy. “If you just follow the bottom line, you should see a lot more investment in energy efficiency purely from a profit-maximising perspective. And we should see even more if we take the costs of climate change into account. Why it’s not happening is a puzzle that keeps me awake at night,” he admits.
Fascinated to find the factors at play, Fuerst and his colleague Ante Busic-Sontic started supplementing their economic models with insights derived from psychology.
According to their newly developed theoretical framework, our personalities – as described by the ‘Big Five’ personality traits of Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism – have a major influence on our decisions about investing in energy efficiency because of the way they relate to our attitudes to risk and the environment.
To provide evidence for the theory, they analysed data from the Understanding Society survey (previously called the British Household Panel Survey), which since 2009 has surveyed some 50,000 households and 100,000 individuals every year. “It’s a rich data set that captures all possible indicators for a household, including energy efficiency decisions and attitudes as well as personality traits,” says Fuerst.
They found that personality traits matter in terms of investment decisions in energy efficiency, even when controlled for drivers such as income, gender and education, although some personality traits are more strongly associated with investment decisions than others.
“Making any investment is almost always a risky undertaking. This is particularly true for many energy efficiency investments that require upfront capital expenditure while the actual energy savings and payback periods occur at a later time, which introduces risk. But what is considered an acceptable level of risk differs widely across people and households.”
This makes attitudes toward risk an interesting factor to consider when explaining energy efficiency investment decisions. “Openness, which is generally related to lower risk aversion, has a distinct impact on investment behaviour and is our strongest trait,” he explains. “Neuroticism and Agreeableness lead people to be more risk averse, while Extraversion has a positive association with risk. Conscientiousness instead shows only a weak impact on investment behaviour through the risk channel.”
They also found sizeable differences between personality traits and environmental attitudes and the same personality traits and actual investment outcomes. “We find that with rising income, personality traits become more important as factors that determine green investment. Your personality traits don’t get a chance to manifest themselves if you lack the money to invest.”
Given policymakers’ limited success in encouraging more of us to invest in energy efficiency, understanding how personality affects these decisions could help us develop more effective policies and incentives, Fuerst believes.
“Because perceived risk and risk aversion are the two key mediating factors, there is scope for developing more bespoke financial products that are attractive if you have a very low appetite for risk.”
There is already a range of financing options available that involve transferring some or all of the investment risk from the property owner to a private or public sector third party but these are currently focused on larger organisations and businesses and have yet to be rolled out to households on a large scale. Additionally, information campaigns can help to increase the awareness among the risk averse that the ‘do nothing’ option is by no means risk-free and might in fact be the riskiest choice. “For example, via the larger exposure to future energy prices, tightening regulations or a potential drop in market value for properties with poor energy efficiency,” he says.
Environmental decisions, are affected not just by personality and attitudes to risk, but also by urban design and social conditions – factors that Professor Doug Crawford-Brown and PhD student Rosalyn Old are exploring.
“Cities are increasingly incorporating sustainability metrics in the way buildings are built, the materials and resources used by occupants, and how waste is disposed of,” Crawford-Brown explains. “But how can we ensure cities will meet these metrics and perform sustainably? One of the most important challenges is to understand how people are motivated to act sustainably, and how those motivations are stimulated by the design and operations of communities.”
To understand more about the take up and use of green technologies, Old is studying the University’s North West Cambridge (NWC) Development, an extension to the city that is currently being built. “House builders are under pressure to include green technologies in new buildings, yet the take up and use of these technologies is uncertain,” she says. “This is a good opportunity to look at what’s special about NWC, how energy and carbon can be saved in a development like this, and learn lessons that can be transferred to future sites.”
Taking a range of technologies – from solar panels and water recycling to the district heating system and electric car charging points – that are being built into NWC, Old is modelling which technologies will be most efficient according to how people behave.
Residents have yet to move into NWC, so she is surveying equivalent demographic groups in Cambridge, such as postgraduates, key workers and families, to find out about their values, norms and attitudes so that she can model how they are likely to use the green technologies on offer.
“We can look at the energy impact given certain scenarios,” she explains. “For example, if 50% of postgraduates are ‘keen greens’ and they all cycle to their departments, the model will tell us the energy impact.”
And because the model includes the ability to interrogate different scenarios, it allows project managers to calculate the carbon savings associated with encouraging certain groups to be more environmentally conscious, opening up new ways of nudging residents to be greener.
Old hopes the model will help shape future phases of NWC, as well as other sustainable city sites and other sectors: “What we discover about how to shift people between different behavioural groups is important and can be used in policy work in many sectors. Even small changes in urban design can make a big difference.”
From wind turbines and solar photovoltaics to grey water recycling and electric vehicles, technology is making it ever easier for us to be green – yet many of us are not. Now, Cambridge researchers are discovering that our personalities and communities have a major impact on our environmental decisions, opening up new ways to ‘nudge’ us into saving energy and carbon.
Nudging people to make sustainable lifestyle choices is one thing, but can a city be nudged towards energy efficient investments, lower emissions and cleaner air?
Cities cope with pollution and uncomfortable temperatures by closing windows and installing units that heat, ventilate and air condition, which themselves guzzle energy and frustrate efforts to decarbonise.
A new interdisciplinary research project aims to halt this unsustainable trend by creating solutions that make cities cleaner with minimum use of energy. The key to progress, says project leader Professor Paul Linden, in the Department of Applied Mathematics and Theoretical Physics, is to start treating the city as a complete, integrated system.
“Experience over the past two decades suggests that when infrastructure investment works closely with innovative urban design across a city, there’s a shift towards low emissions and lower carbon travel through spontaneous citizen choices,” he explains.
The £4.1 million Managing Air for Clean Inner Cities (MAGIC) project will link data fed from sensors monitoring a city’s air to an understanding of air flow inside and outside buildings, and innovations in natural ventilation processes. The idea is to develop an integrated suite of models to manage air quality and temperature (and, consequently, energy, carbon, health and wellbeing) – at the level of buildings, blocks and across the whole city.
To do so, engineers, chemists, mathematicians, architects and geographers from 12 university and industry organisations will be working together, with funding from the Engineering and Physical Sciences Research Council.
The model and associated decision support system will, for example, provide information on how traffic routes can be optimised to reduce pollution, and the cost-benefits of introducing cycling routes and green spaces. But the main value of understanding energy use and air flow, says Linden, is that a city can monitor itself continuously – it can, in effect, become its own natural air conditioner.
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