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Thinking About Consumers:

Meaningful policy needs to factor in psychological hurdles
BioEnergy Connection July 2012

The reasons to reduce oil consumption, from climate change and national security, have existed for 30 years. And yet, in all that time Americans have neither substantially reduced the amount consumed nor meaningfully shifted to alternative fuels.  Why is that? asks law professor Joshua Fershee, who teaches courses in energy law and public policy at the University of North Dakota

“You'll notice that since the 1970's ‘addicted to oil’ conversation began we have not made much progress,” says Fershee. “I wondered what things are getting in the way of that? What are the intellectual or psychological hurdles to the next step?”

Understanding and factoring in behavioral psychology when writing policy could help, says Fershee. Identifying and examining this “psychological infrastructure,” he hopes, will deepen the level of discourse on renewable fuel policy and help move the country beyond policies that “subconsciously or not” have psychological appeal — such as supporting American patriotism and job creation — but that he believes have stalled progress in moving the country toward “true replacement fuels.”

Fershee’s experience advising clients on state and federal energy legislation, climate change issues, and renewable portfolio standards, as well as an earlier stint developing consumer product public relations strategies in the entertainment technology industry, gives him a distinct position from which to consider energy policy.

Writing policy is a devilishly complex undertaking and policy-makers expend an enormous amount of effort trying to weigh every factor. Fershee urges them to factor in consumer psychology as well.

"We have to ask are consumers ready for change, and if not, how do we help get them there?”

Writing policies for renewable fuels can be especially difficult because of American consumers’ multiple desires. “We want to save the world and save money. Those desires are often in tension,” he observes.

A big part of what Fershee calls the psychological infrastructure is a marked preference for the status quo. Policies that encourage and support alternative fuels that mimic gasoline, in that it burns in internal combustion engines and can be bought at a local retailer in five minutes or less (not something like a battery that must be recharged for several hours) have the greatest potential to succeed, he says.

But just because it feels right and seems good, doesn’t necessarily mean it is, argues Fershee. He believes the U.S. government’s advocacy of corn-based ethanol is an example of a policy solution that didn’t do what was intended. “It doesn’t change how we do things, it doesn’t change transportation policy, it doesn’t change our dependence on oil at all.”

“Subconsciously or not, policies are passed that support farming states and feeds American pride instead of pushing harder on advanced biofuels,” he says.

Instead, he advocates adopting policies and subsidizing research and development of innovative technologies that encourage and support “true replacement fuels,” such as renewable plant-based fuels produce from algae and the biomass-rich grass Miscanthus, as a far more effective approach.

Because cellulosic and other advanced biofuels represent a truly emerging market, energy subsidies and policy support are vital to developing those markets. Policies that include support for a reliable supply of biomass, for example, would encourage farmers to grow it in enough quantity that and refineries would invest in infrastructure. Without policies in place, no one would be able to take the first step, he says.

Fershee says taking behavioral psychology and behavioral economics into account when writing policy might resolve some bottlenecks that are more mental than technological. Not that moving consumers toward alternative fuels will be a simple matter.

“Consumers are not ready for a massive change, and shifting away from fossil fuels will require significant and even fundamental change,” says Fershee. “Still, that change can be pragmatic rather than unnerving and harsh. By considering what we want from government, and who wants what, policymakers may be better able to draft effective solutions.”


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