Challenging Energy Companies to Compete

by Amy Caraballo

Since the dawn of time, humans have thrived on competition. Today, countries continue to compete for dominance in both the financial markets and for total power. Competition isn’t limited to national governments, however. In the United States, entire weekends are devoted to televised sporting events and children, as young as toddlers, compete in sports (Sports Connection, n.d.). Even the performing arts have become televised competitions. It seems only natural then to look at the power of competition to change our energy consuming ways. What about our options, though? Few companies offer much renewable energy. Even those that do offer only a small fraction of the energy produced through renewable resources (American Physical Society, n.d.). How can consumers meaningfully change our consumption when the options are so severely limited? But, what if we used this naturally competitive streak of our human nature on the actual energy companies, themselves?

What Do We Need?

Nearly 40% of the world’s electricity is produced by burning coal (Nijhuis, 2014). The burning of coal is one of the main contributors of greenhouse gases, specifically CO2 (Nijhuis, 2014). And coal isn’t the only problem. All fossil fuels, including natural gas, capjerimum_Greenhouse_Effectpropane, gasoline, even butane give off CO2 as a byproduct of their use (EIA, n.d.). In fact, 84% of all the world’s power is created through fossil fuels. (American Physical Society, n.d.). These resources are also severely limited and we are destined to run out (Riddel, Ronson, Counts, & Spenser, n.d.). It is obvious that we need to find renewable and ecologically safe alternatives and we need to do this soon. But with such changes come costs and there has been little financial incentive for energy companies to change their ways. After all, consumers still need energy regardless of where it comesĀ from.

What Do We Know?

In 1996, Siero et al. studied how a phenomenon called comparative feedback influenced industrial employees to conserve energy while at work. Basically, the scientists found that when a group of workers saw how their own conservation efforts stacked up against another group’s efforts, they worked harder at conserving energy (Siero et al, 1996). This comparative feedback idea has also been used successfully in getting individuals to reduce energy consumption at home (Midden, Meter, Weenig & Zieverink, 1983). Knowing that competition also drives much of our capitalistic economy, it would seem that using comparative feedback to stir up competition might also work on the energy companies, themselves.

How Do We Do It?

From a financial standpoint, there is very little reason for an energy company to scrap current technology and know-how to convert resources to renewable energy. Conversion is costly in both time and resources. Though we can make many moral and environmental arguments for switching, the bottom line is usually about money. In order for energy companies to change, there has to be financial incentive. One way we might incentivize the industry is to create government sponsored competition. Though thispowerplants idea might incur public costs, these costs could be minimal if in the form of advertisement. Using the idea of comparative feedback, the government could create public advertising campaigns that gave statistics about how well each energy company was doing in terms of changing to renewable sources. This advertising could serve as a financial incentive for companies who were working harder at switching to renewable energy. Consumers would be able to know which energy companies were more dedicated to saving the planet and thus these companies could outsell their competition.

What Does This Look Like?

Much like other United States Government sponsored campaigns (think The Ad Council), there could be multimedia campaigns that ensured that people knew which companies were changing over to renewable resources. This could be updated on a monthly or semi-monthly basis and be part of the national news, for instance. In order for it to work, this information would have to be consistently sent out and updated. People would need to know when to expect the information and where to get it. As long as the information was flowing, consumers would have choices and the energy companies would have to work hard at keeping the consumers happy.

But Will It Work?

A program is only as good as its evaluation process. There would have to be a way to measure how much positive change was happening in the form of continually more available renewable energy and less available fossil fuel sources after this comparative advertising campaign took flight. We would have to measure how much renewable energy was available in the short-term of the program and then how much was available in more of a long-term time frame. Because this intervention also presumes that consumers want renewable energy, more studies should be done to gauge the public’s knowledge about the dire circumstances of our continued reliance on fossil fuels. The knowledge or lack thereof could affect how much or little change happens in terms of energy production from the industry. In other words, they might build it, but will we buy it?

For those who are aware of the dire circumstances of global climate change and the limited supply of fossil fuels, switching to renewable energy is, well, a no-brainer. If we want the Earth to support life a little while longer we must find a way to reduce our usage. For those who are hard to convince, however, we might need some incentives. Competition is as old as we humans, ourselves. Perhaps we can use that competitive quality to push everyone, even energy companies, to save our species.


American Physical Society. (n.d.). Fossil Energy. Retrieved from http://www.aps.org/policy/reports/popa-reports/energy/fossil.cfm

Midden, C., Meter, J., Weenig, M., & Zieverink, H. (1983). Using feedback, reinforcement and information to reduce energy consumption in households: A field-experiment. Economic Psychology, 3.1, 65-86. http://dx.doi.org/10.1016/0167-4870(83)90058-2

Nijhuis, M. (2014). Can Coal Ever Be Clean? Retrieved from http://ngm.nationalgeographic.com/2014/04/coal/nijhuis-text

Riddell, A., Ronson, S., Counts, G., & Spenser, K. (n.d.). Towards Sustainable Energy: The Current Fossil Fuel Problem and the Prospects of Geothermal and Nuclear Power. Retrieved from http://web.stanford.edu/class/e297c/trade_environment/energy/hfossil.html

Sports Connection LLC. (n.d.). Lil’ Kickers Soccer. Retrieved from http://www.sportsconnectionnc.com/details.php?Lil-Kickers-Soccer-40

U.S. Energy Information Administration (EIA). (n.d.). Energy – Carbon Dioxide Emissions Coefficients. Retrieved from http://www.eia.gov/environment/emissions/co2_vol_mass.cfm

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2 comments

  1. cover,adele

    “[…]Challenging Energy Companies to Compete | Applied Social Psychology (ASP)[…]”

  2. Michael Edward Montgomery

    Hello Amy
    Wow this is really a great blog. I love it.I like that you put in some graphics to explain what you are saying and you message is very clear and easy to follow. You are so right we as consumers need to be informed on the energy we use and its limits. Renewable energy is the way to go but as you said company’s do not want to spend the money to change over. I am glad to see that car companies are starting to make the change over to electric cars but then we need to look at a renewable electricity. Some thing needs to change and change at a faster rate. I really enjoyed your blog and learned some things on the arguments that company’s have on switching over.Great job

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