Judge a book by its cover: the impact of policy framing on the willingness to reduce energy consumption

Panel: Panel 8 Choosing some specific instruments

Authors:
Yael Parag, Environmental Change Institute, Oxford University School of Geography and the Environment
Deborah Strickland, Environmental Change Institute, Oxford University School of Geography and the Environment
Stuart Capstick, School of Psychology, Cardiff University, Wales.

Abstract

Framing alters the way that individuals react to signals. A possible opportunity therefore exists for saving energy and emissions by changing the policy framing. A comparative experiment (N=1200) examined peoples’ willingness to change energy consumption behaviour under three differently framed policy instruments: carbon tax, energy tax and Personal Carbon Allowances (PCA). PCA is a radical alternative to taxation proposed in the UK. Under a PCA scheme carbon credits are allocated periodically, at no cost, to individuals, and require surrendering when energy is purchased. PCA scheme would cover electricity, gas, gasoline, and air tickets
but not embedded carbon in products. Under-emitters could sell their surplus credits in the personal carbon market, while over-emitters would need to buy extra credits. Whereas taxation supposes to change economic behaviour, PCA additionally postulates to impact behaviour by shifting individual’s carbon perception and setting a new social norm for personal emissions. It is therefore hypothesised that PCA has greater potential to deliver emissions reductions than taxation. Participants in three groups each received one version of a survey with the same questions about energy consumption behaviour (household and transport) and energy efficiency, under one of the following framings: PCA, carbon tax and energy tax (where carbon was not mentioned). Results suggest that more people are willing to make reductions under a PCA framing as compared to the two taxation options; carbon visibility has an impact on behaviour; PCA framing encourages people to reduce emissions covered by the scheme as well as non-inclusive emissions more generally (spillover effect).