One size fits all? Policy instruments should fit the segments of target groups

Panel: Panel 4. Market transformation

Authors:
Cees Egmond, SenterNovem
Kris Lulofs, University of Twente

Abstract

In order to meet the Kyoto CO2 reduction targets, technical innovations in the field of energy-efficiency must be diffused more rapidly and on a larger market scale. Markets develop gradually however, especially if innovations are involved. Diffusion starts with the innovators and early adopters (the early market), followed by the mainstream market (the early and late majority), and ends with the laggards. The actors in these markets differ in their willingness to adopt innovations: the early market actors have a visionary attitude, and the mainstream actors are more pragmatic. In order to choose policy instruments that will most effectively influence these two markets within the target group of housing association, we addressed the following two questions.

What are the differences between the early and mainstream markets actors from a behavioural change point of view, and
in what way do existing policy instruments differ in influencing the behaviour of these actors?

We analysed early market and mainstream decision-making behaviour, and how the active ingredients in policy instruments specifically target the characteristics of the two markets. Mainstream instruments should intervene as early as possible in the decision-making process and emphasise communication about advantages such as comfort and quality in addition to money and energy savings, and present energy conservation as a solution to an actual problem. Instead of bureaucratic subsidy systems for the mainstream, the motto should be 'cash on the barrelhead'. Early market actors are highly internally motivated, implying that early market interventions have to be challenging and facilitating.