IEEE Power & Energy Magazine - January/February 2018 - 45
Monetary incentives for energy savings may activate
a cost-benefit mind-set, which makes consumers
focus more on the private costs and benefits.
Incentives May Crowd Out Intrinsic Motivation
a third downside of providing monetary incentives for reducing household fossil-energy use is that doing so may undermine people's intrinsic motivation to engage in behaviors they
would have engaged in anyway (for a discussion on intrinsic
versus extrinsic motivation, see Steg et al. in this issue). indeed,
many people engage in sustainable energy behavior without
receiving monetary incentives for doing so. For example, they
may sign up for residential energy-saving programs, switch
to a green energy provider, or buy energy-efficient appliances
because they are motivated to save the environment. When
individuals engage in behaviors without receiving money or
other extrinsic rewards, they display so-called intrinsic motivation. research has found that offering an extrinsic reward
in the form of a monetary incentive tends to reduce or "crowd
out" intrinsic motivation for that behavior. even highlighting
the monetary rewards inherent to energy savings may undermine consumers' intrinsic motivation to change their behavior. For example, a study using three different advertisements
for residential energy-saving programs, which highlighted
monetary benefits, environmental benefits, or both benefits,
found that those who received the advertisement highlighting
environmental benefits were the most willing to enroll (see Figure 3). When highlighting monetary benefits, either alone or
in combination with environmental ones, consumers' environmental motivations and willingness to enroll were reduced.
These effects were especially pronounced among consumers
who care about the environment, that is, who are intrinsically
motivated to enrol in the program.
january/february 2018
monetary incentives may also influence the likelihood of
obtaining so-called spillover effects (see Steg et al. this issue),
where making people act to protect the environment in one
area makes them more likely to act environmentally friendly
in other areas as well, that were not targeted by the intervention. if people engage in an energy-saving behavior for the
money, this does not increase their motivation to also engage
in other pro-environmental behaviors that are not incentivized. For example, in one study, clients of a german energy
provider were randomly allocated to three groups. The first
group received electricity saving tips combined with a monetary framing (savings in euros), the second group received the
same tips with an environmental framing (savings in co2),
and the third group received no information and served as the
control group. The first two groups showed higher intentions
for saving electricity than the control group. The framing
was combined with the provision of electricity savings tips;
therefore, it is unclear if the tips or the framing influenced the
intentions to save electricity. however, positive spillover on
climate-friendly intentions beyond saving electricity at home
(e.g., reducing energy use at work or reducing beef consumption) was found in the environmental framing condition only.
monetary incentives for specific energy-saving actions may
7
Willingness to Enroll
compared to receiving the same amount in the future. as a
result of such temporal discounting, the monetary savings
obtained from efficiency behaviors can be perceived as not
worth the effort. The private benefits of curtailment behaviors, such as lowering the heater or taking shorter showers,
may be perceived as rather small, too small to justify the
increased discomfort. Thus, curtailment behaviors may also
be perceived as too costly compared to the benefits.
hence, when deciding to use monetary incentives and
thus promoting cost-benefit thinking among consumers, it is
important to carefully consider the private costs and benefits
of the promoted behavior. When the private costs in terms of
down payment, effort, and/or comfort are relatively high, the
private benefits need to be high as well. in general, monetary
incentives need to be large enough to justify and overcome
these costs but usually are not.
6.5
6
5.5
5
4.5
4
Emphasis on Environmental Benefits
Emphasis on Monetary Benefits
Emphasis on Both Benefits
figure 3. The willingness to enroll in a residential energysaving program emphasizing environmental, monetary, or
environmental and monetary benefits. (From D. Schwartz,
W. Bruine de Bruin, B. Fischhoff, and L. Lave, "Advertising
energy-saving programs: The potential environmental cost
of emphasizing monetary savings," J. Experimental Psychology: Applied, vol. 21, no. 2, pp. 158-166, 2015.)
ieee power & energy magazine
45
Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - January/February 2018
Contents
IEEE Power & Energy Magazine - January/February 2018 - Intro
IEEE Power & Energy Magazine - January/February 2018 - Cover1
IEEE Power & Energy Magazine - January/February 2018 - Cover2
IEEE Power & Energy Magazine - January/February 2018 - Contents
IEEE Power & Energy Magazine - January/February 2018 - 2
IEEE Power & Energy Magazine - January/February 2018 - 3
IEEE Power & Energy Magazine - January/February 2018 - 4
IEEE Power & Energy Magazine - January/February 2018 - 5
IEEE Power & Energy Magazine - January/February 2018 - 6
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IEEE Power & Energy Magazine - January/February 2018 - 8
IEEE Power & Energy Magazine - January/February 2018 - 9
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IEEE Power & Energy Magazine - January/February 2018 - Cover3
IEEE Power & Energy Magazine - January/February 2018 - Cover4
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