Energy use is integral to our lives. Without it, the standard of living Australians currently enjoy would be impossible. However this standard of living comes at a cost. Per capita levels of energy consumption in Australia are now some of the highest in the world and have also experienced the largest growth among comparable OECD countries over the last two decades. This presents a major challenge when trying to shift towards a more sustainable low carbon lifestyle. This report explores aspects of household energy consumption in Australia and the influences that have caused household energy usage to rise. It considers how different academic disciplines explain household decision-making in relation to environmental issues, develops an integrated conceptual framework for understanding what drives household consumption, and includes a literature review to provide research evidence about the impact of policy interventions aiming to reduce energy consumption on households.
The report discusses a whole range of policy levers which are available to manipulate/prompt/nudge/force households into behaviours that could reduce energy usage. These strategies include regulation, taxation, transfers, grants, pricing policy, capital expenditure, education and advocacy, and compliance. However the degree to which any one of these levers is effective, and the precise design of any policy instrument within these broad strategies, has to be grounded in a good understanding of what explains household decision making. But different disciplines offer different understandings, and in effect different policy advice.
The report concludes with an overview of the policy environment with respect to household energy consumption. It reconsiders the range of policy options, and reinforces the proposition that policy design is contingent on a sound understanding of all aspects of the processes of household decision making. It goes on to argue that appropriate policy instruments require two things. The first is a rich understanding of the problems or issues: this includes the scale and form of the problem, knowledge of the range of possible policy options, who will be affected by them, and to what degree, i.e. will they be equitable and efficient? The second even more fundamental requirement is that of social legitimation for the policy process, and for particular policy instruments: that is there must be broad acceptance of, and support for, the policy direction and its particular form.
Government policy levers for influencing household energy consumption should encourage regulation as a broad policy lever, which includes:
1. Building regulations to encourage use of passive design material in new or established dwellings.
2. Planning regulation to require potential for lower energy use of urban environment e.g. new residential housing estates.
It means policy and programs, e.g. building regulations, should be monitored, properly enforced and changed for changing circumstances.