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The power of green defaults: the impact of regional variation of opt-out tariffs on green energy demand in Germany

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  • Kaiser, Micha
  • Bernauer, Manuela
  • Sunstein, Cass R.
  • Reisch, Lucia A.

Abstract

The present paper focuses on green defaults as demand-side policies supporting the uptake of renewable energy in Germany. It sets out to gain a better understanding of whether and for whom green electricity defaults work. The present study is one of the first to use a large-scale data set to investigate this question. We combine micro-level data from the German Socio-Economic Panel (GSOEP) covering private households (including a wealth of individual information) with macro-level information such as population density of a region and proportion of energy suppliers in a given region that use a green opt-out tariff within their basic supply. We show that in Germany, green defaults, automatically enrolling customers in renewable energy sources, tend to stick, especially but not only among those who are concerned about the problem of climate change. This finding, based on real-world rather than experimental evidence, attests to the power of automatic enrollment in addressing environmental problems in Germany and potentially beyond, including climate change, and also adds to the growing literature on the substantial effects of shifting from opt-in to opt-out strategies.

Suggested Citation

  • Kaiser, Micha & Bernauer, Manuela & Sunstein, Cass R. & Reisch, Lucia A., 2020. "The power of green defaults: the impact of regional variation of opt-out tariffs on green energy demand in Germany," Ecological Economics, Elsevier, vol. 174(C).
    • Handle: RePEc:eee:ecolec:v:174:y:2020:i:c:s0921800919317975
    DOI: 10.1016/j.ecolecon.2020.106685
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    4. L. Mundaca & H. Moncreiff, 2021. "New Perspectives on Green Energy Defaults," Journal of Consumer Policy, Springer, vol. 44(3), pages 357-383, September.
    5. Junika Napitupulu & Septony B. Siahaan & Sunday Ade Sitorus, 2023. "Renewable Energy and its Moderation on Green Home Selection in Indonesia: Bridging Environment, Product, and Value," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 259-269, November.
    6. Christina Gravert, 2024. "From Intent to Inertia: Experimental Evidence from the Retail Electricity Market," CESifo Working Paper Series 11139, CESifo.
    7. Diederich, Johannes & Goeschl, Timo & Waichman, Israel, 2022. "Self-Nudging vs. Social Nudging in Social Dilemmas: An Experiment," Working Papers 0710, University of Heidelberg, Department of Economics.
    8. Alessandro De Palma & Marco Faillo & Roberto Gabriele, 2023. "Decentralized Energy: How 100% Renewable Energy Regions Affect Households’ Saving Behavior," Discussion Papers of DIW Berlin 2055, DIW Berlin, German Institute for Economic Research.
    9. Dominik Bär & Stefan Feuerriegel & Ting Li & Markus Weinmann, 2023. "Message framing to promote solar panels," Nature Communications, Nature, vol. 14(1), pages 1-9, December.
    10. Leonhard Lades & Federica Nova, 2022. "Ethical Considerations when using Behavioural Insights to Reduce Peoples Meat Consumption," Working Papers 202209, Geary Institute, University College Dublin.
    11. Meier, Johanna & Andor, Mark A. & Doebbe, Friederike C. & Haddaway, Neal R. & Reisch, Lucia A., 2022. "Review: Do green defaults reduce meat consumption?," Food Policy, Elsevier, vol. 110(C).
    12. Marko Milojević & Paweł Nowodziński & Ivica Terzić & Svetlana Danshina, 2021. "Households’ Energy Autonomy: Risks or Benefits for a State?," Energies, MDPI, vol. 14(7), pages 1-16, April.
    13. Elena Smirnova & Katarzyna Szczepańska-Woszczyna & Saltanat Yessetova & Vadim Samusenkov & Rodion Rogulin, 2021. "Supplying Energy to Vulnerable Segments of the Population: Macro-Financial Risks and Public Welfare," Energies, MDPI, vol. 14(7), pages 1-18, March.
    14. Danuta Miłaszewicz, 2022. "Survey Results on Using Nudges for Choice of Green-Energy Supplier," Energies, MDPI, vol. 15(7), pages 1-19, April.
    15. Gonçalves Rigueira Pinheiro Castro, Pedro Henrique & Filho, Delly Oliveira & Rosa, André Pereira & Navas Gracia, Luis Manuel & Almeida Silva, Thais Cristina, 2024. "Comparison of externalities of biogas and photovoltaic solar energy for energy planning," Energy Policy, Elsevier, vol. 188(C).
    16. Leonhard K. Lades & Ewa Zawojska & Robert J. Johnston & Nick Hanley & Liam Delaney & Mikołaj Czajkowski, 2022. "Anomalies or Expected Behaviors? Understanding Stated Preferences and Welfare Implications in Light of Contemporary Behavioral Theory," Working Papers 2022-20, Faculty of Economic Sciences, University of Warsaw.

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