The Power of Green Defaults: The Impact of Regional Variation of Opt-out Tariffs on Green Energy Demand in Germany

52 Pages Posted: 13 Jul 2020

See all articles by Micha Kaiser

Micha Kaiser

Copenhagen Business School - Department of Management, Society and Communication; University of Hohenheim; Zeppelin University

Manuela Bernauer

Zeppelin University Friedrichshafen

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Lucia A. Reisch

Copenhagen Business School - Department of Management, Society and Communication; Zeppelin University CCMP - Center for Consumer Markets Politics

Date Written: August 2020

Abstract

The present paper focuses on green defaults as demand-side policies supporting the uptake of renewable energy in Germany. It sets out to gain a better understanding of whether and for whom green electricity defaults work. The present study is one of the first to use a large-scale data set to investigate this question. We combine micro-level data from the German Socio-Economic Panel (GSOEP) covering private households (including a wealth of individual information) with macro-level information such as population density of a region and proportion of energy suppliers in a given region that use a green opt-out tariff within their basic supply. We show that in Germany, green defaults, automatically enrolling customers in renewable energy sources, tend to stick, especially but not only among those who are concerned about the problem of climate change. This finding, based on real-world rather than experimental evidence, attests to the power of automatic enrollment in addressing environmental problems in Germany and potentially beyond, including climate change, and also adds to the growing literature on the substantial effects of shifting from opt-in to opt-out strategies.

Suggested Citation

Kaiser, Micha and Bernauer, Manuela and Sunstein, Cass R. and Reisch, Lucia A., The Power of Green Defaults: The Impact of Regional Variation of Opt-out Tariffs on Green Energy Demand in Germany (August 2020). Ecological Economics, 2020, Available at SSRN: https://ssrn.com/abstract=3646280 or http://dx.doi.org/10.2139/ssrn.3646280

Micha Kaiser

Copenhagen Business School - Department of Management, Society and Communication ( email )

University of Hohenheim ( email )

Fruwirthstr. 48
Stuttgart, 70599
Germany

Zeppelin University ( email )

Am Seemooser Horn 20
Friedrichshafen, Lake Constance 88045
Germany

Manuela Bernauer

Zeppelin University Friedrichshafen ( email )

Am Seemooser Horn 20
Friedrichshafen, 88045
Germany

Cass R. Sunstein (Contact Author)

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Lucia A. Reisch

Copenhagen Business School - Department of Management, Society and Communication ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Zeppelin University CCMP - Center for Consumer Markets Politics ( email )

Am Seemooser Horn 20
Friedrichshafen, Lake Constance 88045
Germany

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