Authors: Andrew Burlinson, Apostolos Davillas, Monica Giulietti
The widespread adoption of low-carbon technologies (LCTs) by residential consumers is one of the cornerstones of net zero targets worldwide. Reducing the consumption of energy from fossil fuels by residential consumers would undoubtedly contribute to the achievement of these targets in the UK, as the sector represents nearly half (47%) of the UK’s 2035 abatement target for the power sector.
The adoption and diffusion of LCTs, which would facilitate such reduction in emissions from domestic consumption, is however unlikely to be equally distributed across different socioeconomic groups. While there is evidence that some domestic consumers have embraced more sustainable ways to live and travel in recent years, the ability to make environmentally sustainable choices is subject to financial and technological constraints which are encountered to different extents across society. The general picture of LCT penetration across consumers reveals an uneven pattern of adoption, which raises concerns about the feasibility of Ofgem’s objective of ‘ensuring that no consumer is left behind’ in the transition to net zero.
Evidence is available in the literature about socio-economic inequality as a potential barrier to widespread diffusion of LCTs, showing that solar adoption tends to be favoured by white, highly educated, and high-income households and that solar and EV adoption is unequally distributed in the population according to age, gender, education and ethnicity. Furthermore, education appears to affect pro-climate outcomes, such as attitudes towards renewable energy and energy efficiency.
However, in general, it is challenging to establish a reliable causal link between adoption behaviour and socio-economic characteristics because unobserved characteristics might influence both the decision to adopt LCTs and the current socioeconomic characteristics of different consumers. For this reason, we have chosen to investigate the impact of pre-existing socio-economic circumstances on the decision to adopt LCTs. We focus on those circumstances which create the conditions for equal opportunities in an outcome of interest (the adoption of LCTs in our case) before any effort is exerted towards achieving the outcome. These circumstances include birth cohort, gender, ethnicity, childhood socio-economic status and parental occupation status, all of which can be considered as predetermined relative to a consumer’s decision to adopt a technology.
Our results provide novel yet reassuring evidence that socioeconomic inequalities in the adoption of some LCTs (solar photovoltaics, solar heating, and electric vehicles) by domestic consumers have fallen over the last decade. The results also importantly reveal that socioeconomic inequality is more prevalent among late adopters of LCTs, implying that a lower or slower rate of adoption of hybrid or electric vehicles and solar panels is likely to be more prevalent among the least well-off and most vulnerable in society.
Policies targeting the most disadvantaged social groups are crucial to mitigate the effects of these observed inequalities, as a lack of support to these groups could potentially hold back the low-carbon transition. In order to achieve the existing emission reduction and energy efficiency targets, in our view it is therefore crucial to promote LCTs’ adoption by the most vulnerable (either at the household or community level). If such technologies were to remain out-of-reach, socioeconomic inequality in LCTs may slow down a critical pathway to carbon abatement, as well as potentially generating a broad public opposition to welfare-enhancing Government interventions in the energy and environmental areas. The recent debate about the unequal impact of the expansion of the Ultra-Low Emission Zone restrictions in London is just one example of future tensions and challenges to be addressed by policymakers.
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