From 29-30 January 2015, Ca' Foscari University of Venice, The Energy and Resources Institute (TERI) and the United Nations Environment Programme (UNEP) will host the GGKP's Third Annual Conference on the theme of "Fiscal Policies and the Green Economy Transition: Generating Knowledge – Creating Impact" in Venice, Italy.
Nadia Ameli will be a speaker at the conference, presenting on January 29 inthe session 'A2: Creating incentives for investment in clean energy'. Nadia will be presenting her paper, 'Determinants of households’ investment in energy efficiency and renewables. Evidence from the OECD survey on household environmental behaviour and attitudes'. Nadia is currently a Marie-Curie fellow in the Economics Department at the OECD, where she is analysing different explanations for slow diffusion of energy efficiency and renewable energy technologies across OECD countries.
Q&A with Nadia Ameli
1. Briefly describe the topic and conclusion of your paper.
My study provides novel evidence on the main factors behind consumer choices regarding investments in energy efficiency and renewable energy technologies using the OECD Survey on Household Environmental Behaviour and Attitudes. Empirical results suggest that households’ propensity to invest in clean energy technologies depends mainly on home ownership, income, social context and household energy conservation practices. Indeed, home owners and high-income households are more likely to invest than renters and low-income households. In addition, environmental attitudes and beliefs, as manifest in energy conservation practices or membership in an environmental non-governmental organisation, also play a relevant role in technology adoption.
2. Through your research, what do you find as the role for fiscal policy in the transition to a green economy?
My research suggests that fiscal policies may play a relevant role in the transition to a green economy. Indeed, clean energy investments depend positively on income and this effect is larger for lower income levels. This is indicative of credit constraints. Lifting these constraints would likely promote investment for low-income households. Fiscal policies such as direct subsidies, tax credits or rebates can also be relevant policy instruments to lower the upfront cost of energy investments. While internalising external costs of emissions by increasing energy prices is thought to be a more efficient instrument in the absence of credit constraints, subsidies to adopt low-emission technologies may be a more effective and less costly than higher energy taxation when credit constraints are present. On the other hand, novel approaches, such as nudging consumers could complement fiscal policies to promote energy conservation actions and influence individual decision-making. In particular, providing households with feedback on their energy use can be helpful along with energy labels.
3. What are the key policy implications of your research?
My study suggests that targeted policies are required to address specific barriers for different groups of consumers. For instance, credit constraints are more relevant for low-income households and lifting these constraints would likely promote investment for this group. The split incentive problem that arises in the rental housing market can be addressed if investments in energy-efficient measures were capitalised in the purchase and rental prices of the corresponding property, so the owner could recover the investment cost. In addition, explicitly allowing owners to increase the rent after implementing energy efficiency measures might be necessary in some countries, where owners are not allowed to raise the rent as they wish, unless the tenant changes. To promote energy conservation actions and influence individual decision-making, providing households with feedback on their energy use can be helpful along with energy labels. Novel approaches, such as nudging consumers could be another policy option to promote energy conservation.
4. What do you hope to gain from the GGKP’s 3rd Annual Conference?
As a young researcher, the GGKP’s 3rd Annual Conference would provide an unique opportunity to contribute significantly to my professional maturity. At the moment, I am exploring different explanation scenarios for slow diffusion of energy efficiency and renewable energy technologies. This topic is receiving innovative contributions from behavioral economists and psychologists, who have integrated advances and breakthroughs from their research areas into economic science. This is just a paradigmatic example of a field where the interdisciplinary interaction between different scientists, points of view and experiences provide a new vision and novel insights. Attending this meeting will allow me to exchange key ideas and establish new collaborations, as well as offering an influential yet out of the box voice in key policy debates. This is fundamental to foster a better communication between science and society, in such a way that science can influence and impact the policy making, in particular by stimulating experiment and innovating the energy field.
5. Which session at the conference are you interested in attending and why? (See programme here).
There are two sessions that I am most interested in attending: “Fiscal policy reform for an inclusive green economy” and “Effectiveness of fiscal policy in eliciting behavioural change”.
Indeed, the need to achieve inclusive green growth, by improving both people’s material living conditions and their quality of life, while at the same time considering the distribution of well-being outcomes, is now at the forefront of energy science and policy discussion worldwide.
At the same time, a growing body of evidence in academic literature demonstrates that there is great potential for energy savings due to measures targeting consumer behaviour. A better understanding of the consumers’ behaviour can help policy makers to design more cost-effective and mass-scalable behavioural solutions towards a low-carbon economy.
6. What are the next steps for your research?
Next steps of my research will focus on comparing alternative policy instruments aiming at energy efficiency and renewables deployment. Evaluation policy studies will be central to gain a better understating of what have worked so far and what can be improved in the future to ensure a more sustainable development.