How to reduce carbon emissions = 100 coal power stations with the world’s biggest nudge

September 14, 2020

     By Duncan Green     

In the latest instalment from my LSE activism students, Lachlan Hill took my course to help formulate the strategy for his Go25degrees campaign in Indonesia. This asks Air Con manufacturers – not governments – to take responsibility for their indirect emissions and make one simple change to their factory settings.

One simple nudge to prevent the construction of >100 power stations, improve gender equality, and keep voters and corporates happy!

Later this year, Go25degrees will commence work on the world’s biggest nudge.

In Indonesia alone, its implementation could see electricity demand drop by the equivalent of 6 coal-fired power stations by 2025, improve the productivity of female employees by 5-10% and reduce power prices for its 275 million residents.

Unlike organ donation or tax collection, this nudge doesn’t require governments, so we have a decent chance of succeeding!

What is it?

Currently, the factory default settings of most AC Units are 18-23°C. Our mission is to change the default air-conditioning temperature to 25°C for 1 billion people living in the tropics. It may seem trivial if the numbers weren’t so scary:

  • The IEA estimates AC will soon produce 2bn tonnes of CO2 a year – about the same amount as India, the world’s third-largest emitter, produces today.
  • The unrestricted use of toxic refrigerants used in AC could cause 0.4°C of additional warming by the end of the century. This doesn’t include some of the emissions from the 1035 coal-fired power stations planned or under construction.
  • The number of AC units is predicted to triple to 5.6b by 2050, with most of the growth in the rapidly developing tropics.
  • AC is a vicious cycle, as the globe warms, the demand for AC increases which in turn heats the globe more.

Why will it work?

  • Changing defaults changes behaviour: In the world of nudging and behavioural change, changing defaults comes out on top as the most effective intervention by far. Acknowledging this, India became the 1st country to introduce minimum factory defaults of 24°C.
  • The manufacturing market is relatively concentrated: ~16 companies represent 80% of all AC units manufactured. Most of these companies are acutely aware of their impact on the environment and have showed a willingness in the past to reduce their harm.
  • Increasing your AC temp saves big dollars: In India, the ministry estimates corporates and consumers can save 6% off their power bill for every 1 degree increase. Use the Go25degrees calculator to see how much you can save.
  • Women are more productive at higher temperatures: The most recent study found women perform best at ~29°C compared to men at ~20°C. Another study found employees no less productive at 25°C than the industry consensus of 22°C.
  • Governments to spend less: Power plants and distribution lines are expensive. For example, preventing the construction of 6 coal-fired power plants in Indonesia saves ~USD$3b and ~10m tonnes of state-subsidized coal.
  • Power bills are a political Achilles heel: As with other everyday products like metro prices in Chile or petrol prices in Indonesia, a key source of political survival rests in a governments ability to manage power prices. The demand shock caused by higher AC defaults would lead to lower electricity prices, in turn, keeping voters happy.

Why won’t it work?

  • AC as a status symbol: In Asia especially, having AC and setting it to 18°C is viewed as a sign of wealth.
  • Men in management positions: A lot of the people responsible for setting AC temperatures are men who prefer lower temperatures, regardless of the benefits.
  • Governments beholden to fossil-fuel lobby groups: In the recent Indonesian election, both candidates pledged to increase coal production. This is perhaps no surprise as the eventual winner, Joko Widodo, received 86% of his donations from fossil-fuel related companies. Conceivably, a government could force manufacturers to default to a low AC temperature, but we think that’s unlikely.
  • Lack of understanding: People think that if you want to cool a room quickly, you should set the temperature as low as possible. This could mean regardless of the default temperature, people will always “opt-out” of 25°C for something cooler. This is of course more difficult to do in corporate settings.

Would you support this? Let us know what you think!

I checked the go25 website, and Lachlan’s already got a million sign ups – pretty impressive! He is also the first student to submit his assignment on a powerpoint – here

September 14, 2020
Duncan Green