Green Disconnect – Part 1

While we would be hard-pressed to find many silver linings in the pandemic, one would be the impact of stay-at-home orders on the environment. Across the globe, people reported stories of seeing the Himalayas in India for the first time in 30 years or the canals in Venice becoming clearer and filled with fish. Closer to home, people found a renewed love of an evening walk, weekend hikes, and exploring hidden outdoor gems in their neighborhood. Being out of our houses and safely exploring our environment became a refuge and escape during COVID-19.

This sentiment has carried over to a renewed government focus on climate change and how we can mitigate harmful carbon emissions. Coinciding with Earth Day, the Biden Administration welcomed world leaders to a Climate Summit to discuss, amongst other topics, “Galvanizing efforts by the world’s major economies to reduce emissions during this critical decade.” Energy providers will play a significant role in helping meet this objective. Energy consumers will, too.

So, what can providers do to help consumers to rethink their relationship with energy use, act on opportunities to save money, and reduce their carbon footprint? Badar Khan, president of National Grid, recently noted, “As people say, the cheapest kilowatt hour is the one that you don't consume, and the lowest emitting kilowatt hour is the one that you don't emit.”

We recently polled consumers to understand their sentiment towards climate change and propensity to help. The good news: US respondents are eager to be part of the solution. Nearly half (45%) of respondents said fighting climate change is personally important, and 54% want to reduce their carbon footprint. The bad news: 39% of people surveyed have never even heard the word ‘decarbonization,’ and 67% have no or only a vague idea where their carbon dioxide (CO2) emissions come from. This underscores the need for more engagement and action on the part of the utility industry to both educate and enable consumers.

With 68 utilities across the US stating carbon or emission reduction goals and 40 of those having goals of carbon-free or net-zero emissions by 2050, this disconnect is a big problem. For utilities, influencing customers to act - on a scale we’ve never seen before - is critical to achieving those targets quickly and affordably.

The research shows many people recognize the challenge and want to act, and younger generations are even willing to pay more for clean energy. Eighty percent of Millennials and 73% of Gen Z consumers said they were willing to pay more for clean energy; compared to 36% of Baby Boomers. Moreover, 60% of people said they would look to advice from their utility to help reduce energy consumption. It’s now our job to make it obvious and easy for them to do so.

Utilities that are already engaging customers in this journey have seen that even small actions from a lot of people can make a significant impact on achieving their decarbonization targets. In today’s reality where a lot of consumers just don’t pay attention to their energy use, these utilities are bringing artificial intelligence and behavioral science into their customer experience. It takes expertise in both in order to predict their customers’ needs, get their attention, and influence them to act on an enormous scale. It’s that “in the moment” insight that will get customers to act. 

As Mr. Khan alluded, energy saved today affords more “climate value” in the future. Much like receiving $100 today is worth more than $100 in the future, avoiding GHG emissions today - and thus reaping those benefits now - has more value than avoiding those emissions five or ten years from now.  We simply can’t afford to wait.