Energy Sector Behavioural Insights Platform

Although technologies are important determinants of energy demand, people’s decisions about which technologies they use, and how they use them, ultimately determine energy use. This is true for all sectors. Identifying ways to influence human behaviour will therefore be an important ingredient in clean energy transitions globally.

However, in many cases when designing and implementing energy policy, policy makers resort to “rules of thumb” about human behaviour, often based on orthodox economic theory. While these can be useful, they are not always good predictors of actual human behaviour and policies based on them can sometimes be ineffectual – a policy performance gap.

Building on existing knowledge and experience to incorporate evidence from behavioural science (or Behavioural Insights) throughout the policy cycle should help ensure that energy policies are designed to work with people’s likely behaviours, reducing the policy performance gap.

To some extent, all energy policy is designed to change behaviour: From congestion taxes to discourage people from driving in certain parts of the city, to labelling schemes that encourage people to purchase more energy efficient appliances.

However, in many countries policy makers observe a disconnect between the expected outcomes of a policy and the actual outcomes – a policy performance gap. Often, this gap is because people behave differently than the way policy makers had expected.

Energy policy makers—like policy makers in many other fields—often use “rules of thumb” when making policy, which implicitly involve assumptions about human behaviour. A typical example is this:

While this rule of thumb may work in many cases, it is based an assumption about how people respond to prices and ignores other ways people make purchasing decisions. For example, for some people, higher-priced goods might signify better quality. For these people, lowering a product’s price may make it unattractive, the opposite impact intended by the policy.

Examples such as this suggest policy makers should carefully consider evidence from the behavioural sciences when designing policy, to minimise the risk of policy performance gaps.

What are Behavioural Insights?

Behavioural Insights (BI) are designed to help make better and more effective public policies based on evidence on human behaviour drawn from the fields of behavioural economics, psychology and other behavioural sciences.

Research from these fields has shown that behaviour is often not “rational” and that habits are often guided by cognitive “short cuts” which, while useful in many situations, sometimes result in behaviours that differ from expectations.

BI is designed to help policy makers take such factors into account when designing policies, offering a data-driven and nuanced approach to policy making based on what actually drives citizens’ decisions rather than relying on assumptions about how they should act.

The emergence of Behavioural Insights in government and the need for collaboration

Over the last decade, several countries have set up specialised teams to incorporate BI within energy policy development and implementation processes. In some countries, dedicated BI teams have been established within energy or environment departments. In others, BI teams are established in central agencies to apply BI across a portfolio of issues, including energy. In others still, BI analysis has been conducted by private or semi-private organisations, with government as the primary client.

While some countries have been applying BI to energy policy for years, others are just beginning to experiment with it. International collaboration can help ensure that countries share lessons learned and pool their efforts to improve the efficacy of energy policy globally.

1. Overall objective: Improve the efficacy of demand-side energy policies by ensuring that human behaviour is accounted for at all stages of the policy cycle.
2. Build an international network of energy policy makers that use or are interested in using BI for energy policy.
3. Support energy policy makers in understanding the behavioural assumptions of different policy instruments.
4. Share lessons learned and identify best practices, from inside and outside the energy sector, in applying BI throughout the policy cycle and in both advanced and emerging economies.

Utilising desktop research and expert interviews, the Platform will develop a toolkit for policy makers that will help them understand key behavioural assumptions of different policy approaches.

The work will span multiple areas of the energy policy, including housing, transport, and industry, and will review behavioural assumptions of different policy instruments, such as laws and regulations, incentives and sanctions, and information and service provision.

The toolkit will be accompanied by practical checklists, case studies and online videos that will help policy makers establish dialogues with their in-house behavioural teams (or external consultants) to design a more effective, behaviourally sound energy policy.

Participants will gain access to the network of highly motivated policy makers and behavioural experts with a joint aim: developing more effective energy policy by incorporating human behaviour at all stages of the policy cycle.

All outputs produced by the Platform (see Deliverables) will be directly shaped by the participating countries, ensuring maximum applicability to their national context.

Task participants will also obtain early access to a  massive online course (MOOC) developed for the toolkit users, as well as access to custom webinars, workshops, and networking events. 

Phase 2

For more information on these deliverables please refer to the Phase 2 work plan

Phase 1

Phase 2: April 2021 to December 2022
Canada, Ireland, the Netherlands, Switzerland, United Kingdom

Phase 1: December 2019 to December 2020
Australia, Canada, Ireland, the Netherlands, United Kingdom and Switzerland.

Phase 2 publications:

• Phase 2 work plan

Phase 1 publications:

• Policy Brief (March 2021)- Improving demand-side energy policy outcomes using behavioural insights https://doi.org/10.47568/1PB106
• UsersTCP and IEA Report (December 2020) – Behavioural insights for demand-side energy policy and programmes: An environment scan https://doi.org/10.47568/6OR105
• Project proposal (as agreed by the UsersTCP ExCo)
• Proposal slides