Energy efficiency not a priority for US consumers

Obama has subsequently assigned $150 billion to overhaul US energy consumption in an effort to reduce greenhouse gas emissions, but according to new research by independent market analyst Datamonitor, the US has a lot of ground to make up on their Australian, Canadian and British counterparts in order to prove their environmental and energy credentials.

Leading the way?

Therefore, it was expected, particularly after the oil price shocks of mid-2008 and the impact of the US recession, that American consumers would be leading the way in terms of changing their personal energy consumption behaviours and usage – particularly as European consumers have a significant head-start over their US colleagues in most matters relating to energy efficiency and the environment. According to the Energy Information Administration, in 2006 the US accounted for 21% of global energy consumption, more than double UK per capita consumption. Indeed, over the period from 1980 to 2006, US energy consumption rose overall by 27%, compared to only 11% in the UK and only six percent in Sweden – emphasising the fact that the US has a much greater scope for conserving energy than most developed economies.

However, according to research undertaken as part of Datamonitor’s Recession and Recovery programme, US consumers are still not embracing energy efficiency and ‘green’ initiatives to anywhere near the extent of consumers in Australia, Canada and the UK, says Datamonitor global consulting director Neil Hendry. “For example, only 12% of Americans claim to have used public transport more over the last year, compared to 31% of Britons,” he says.

“Whilst this in part can be put down to differences in the geography of the UK and the US, it does not explain why over 20% of consumers in similarly vast countries such as Australia and Canada say they use public transport more frequently than previously.”

A similar pattern is evident when consumers are asked whether they have increased the frequency with which they walk or cycle to work: 27% of UK respondents say they are now walking or cycling to the office more often than before, but only 12% of US respondents claim to be doing the same.

There is a contradiction in the numbers when automobile journeys and mileage are taken into consideration, however. Twenty nine percent of US consumers state they are taking fewer car journeys now than they were a year ago, compared to 21% of Britons. This apparent paradox can be explained by the fact that once the convenience and relative affordability of car ownership are taken away from US consumers, lifestyle elements that were facilitated by the car reduce in importance, thereby forcing a fundamental reassessment of recreational and shopping behaviours. Whilst consumers in Australia, Canada and the UK will find other ways of ensuring that their lifestyle is not affected by rising petrol prices and an increased social awareness of issues such as climate change, US consumers are tending to ‘stay-at-home’ and are finding other ways of working and socialising.

Herein lies the problem for the Obama administration; whilst US consumers begin to use their homes as more of social hub or as a place of work, over the last twelve months 25% of US consumers say they have not reduced the amount of time they have the heating on at home, compared to 13% of Britons and 19% of Canadians, Mr Hendry says. “Even the argument of a harsh winter does not carry much truck when trying to defend these findings when it is considered that the winter of 2008/9 was relatively as harsh across all three countries.”

Americans lagging behind on energy efficiency

But this is only part of the story. On every indicator of home energy efficiency examined by Datamonitor, from use of energy saving light bulbs to investment in solar panels, the US comes out bottom of the list compared to Australia, Canada and the UK. Whilst arguments can be made around the age and design of housing stock and the cost of domestic energy supplies across the countries, the underlying fact is that at present US consumers have a long way to go when it comes to ensuring that they are using precious gas, fuel and electricity resources in the most efficient and ‘green’ means possible.

Basically, what this means is that US consumers are actually trading off energy consumption in one part of their lives for increased energy consumption in other areas, rather than seeing what they can do from a holistic perspective. According to a University of California study in 2008, whilst this may have the desired effect of reducing carbon dioxide emissions, it has the negative effect of resulting in more nitrous oxide emissions because of the increased use of home electronics equipment and other gadgets.

Whilst initiatives being undertaken by the US Department of Energy to offer tax credits, rebates and financial incentives to consumers looking to save energy and go green are to be praised, it is apparent that more of a co-ordinated approach needs to be made at a local, state and federal level to encourage consumers to not only understand the impact that energy efficiency can have on their back pockets, but also more broadly on US energy security and global warming generally, Mr Hendry says.

“If the Obama administration’s efforts to engage with the rest of the world on climate change are to have real resonance, US consumers need to lead the world in embracing change and need to start to show real and meaningful shifts in behaviour for his words not to sound like proverbial hot air,” he says.

By Datamonitor