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‘Default Effect’ Drives Massive Growth in Green Power Adoption

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  • Mar 15, 2021

When green power is the fallback option for electricity consumers, the large majority of them will accept it rather than going to the trouble of switching to other sources, experience in Switzerland shows.

“When Swiss energy companies made green electricity the default choice, huge numbers of consumers were happy to stick with it—even though it cost them more,” the British Broadcasting Corporation reports, citing a study in the journal Nature Human Behaviour. “Four years after the switch, researchers found that around 80% of [residential] customers were still on green tariffs,” largely because “people didn’t want the hassle of switching back to fossil fuels.”

That simple realization “could have a big impact on global emissions of CO2,” the BBC says.

The study, co-authored by Jennifer Gewinner of public research university ETH Zurich, looked back on what happened when two Swiss energy suppliers switched 234,000 homes and 9,000 businesses from a mix of fuels to all-renewable electricity. The green tariff drove up costs by 3% to 8% for homes, while businesses paid up to 14% more for off-peak power, or about $2,300 per year.

“Before the switch, the numbers choosing to have green power were at around 3%. Afterwards, this rose to 80 to 90% of customers,” the BBC writes.

“The researchers believe that what they are observing is the surprising power of the default effect,” the UK broadcaster explains. “This is a widely-known phenomenon in different spheres, such as in organ donation, where laws have changed in many countries so that people have to opt out if they don’t want to donate after death.”

The ETH Zurich team was surprised that rule held up with a costlier choice among electricity supply options, but pointed to two likely explanations: the effort it would take to switch, and the complexity of utility tariffs.

“You have to switch to the other cheaper tariff bills actively,” explained project team leader Andreas Diekmann. “You can do it by email or by a phone call, but many people just don’t do it.”

As well, “people are a bit overwhelmed because it is a hard topic to actually feel competent to choose your own tariff,” Gewinner added. “So if you help them and tell them we are all moving now to renewable energy, they feel okay. It was kind of what they wanted to do anyway.”

“I think that’s what makes default settings stick so much, because we understand that it’s the recommended product, like the safe choice.”

Nor did the review of historical utility records point to any evidence of higher electricity use among customers who stuck with renewable energy sources. Overall, the study authors “believe moving to a green default setting would have a major impact on carbon dioxide emissions, particularly in countries with a high reliance on fossil fuels such as the U.S., China, or Germany,” the BBC says.

Using a simulation based on Germany’s electricity use in 2018, “we figured out that when all companies would do it only for their private customers, the saving was 45 million tonnes of carbon dioxide,” Diekmann said. “That’s a big impact, equal to about 5% of all the CO2 emissions in Germany.”

Gewinner said the approach should be useful around the world. “Changing people’s attitudes and beliefs takes a lot of time,” she told BBC News. “But we can do this without changing people’s belief structures, but just by being human.”

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