A major hurdle to the adoption of energy-efficient practices is the greater influence of current situation on decision-making than future wellbeing. An example, as cited in ‘Energy Efficiency and Climate Change’ (www.sagepublications.com), is of the first energy-efficient houses built in the 1970s, which looked like common, ordinary houses, though with higher initial costs.
According to a report by the Iowa Association of Municipal Utilities and Iowa Energy Centre, energy efficiency can add 2 to 3 per cent to the cost of a new house, inform the authors B. Sudhakara Reddy et al. “Builders tried long and hard to explain that their homes would be less expensive to own on a monthly basis than the traditionally constructed home, but many went out of business trying,” reads the narrative.
There is a failure of the normative principle of economic rationality, which claims that consumers act to maximise the net present value of their position by engaging in any economic transition that involves net benefits, the authors reason.
Refreshingly, a different approach was adopted in the Netherlands, through the ‘insulation mortgage.’ How does it work? The energy supplier gives the consumer an additional mortgage that covered the cost of thermally insulating the house, and the repayments on the mortgage were less than the savings on the energy bill, the authors describe.
They concede, however, that rented houses pose a problem of their own. “The house owner does not worry about the energy bill. The person renting will never invest in a house that is not his own. In fact, in many countries, the law specifies that the owner could request that any changes, even improvements that the tenant had made to be ripped out at his expense when he leaves the house. As a result, it is nearly impossible to install EE technologies in such houses.”
Imperative addition to the shelf of the eco-conscious.
