Economics and changing lifestyles

Economics and changing lifestyles

Energy Com'ers. Mgmt Vol. 22, pp. 301 to 307, 1982 0196-8904/82/040301-07S03.00/0 Copyright :~ 1982 Pergamon Press Ltd Printed in Great Britain. All...

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Energy Com'ers. Mgmt Vol. 22, pp. 301 to 307, 1982

0196-8904/82/040301-07S03.00/0 Copyright :~ 1982 Pergamon Press Ltd

Printed in Great Britain. All rights reserved


Rancho Santa Fe, CA 92067, U.S.A.

(Received 4 July 1982)

Abstract--The management and consumption of our energy resources are undergoing radical change. That change is prompting reevaluation of traditional patterns of: economic interaction; the roles of public participation in the political process. This article discusses the roots of the energy dilema, the impact of energy on the decision-making process, social change, and energy policy formulation. The impact of this reevaluation on lifestyles and attitudes toward energy are also discussed. Efforts towards the search for a solution are presented.



Energy has become an integral part of modern society. It is indispensable for industrial, agricultural, commercial, and personal use, and it is perceived as a key to growth and industrialization in lesser developed countries (LDCs). Throughout the world, society is in a period of change and transition away from the traditional oil-based economy [1]. Over 8 years have passed since the 1973 oil embargo, yet few nations have been able to formulate viable, consistent national energy policies. The debate that surrounds the policy formulation has been intense and has reached into every corner of society. In fact, energy has touched the fundamental values of society and society's perceptions of itself. Thus, the energy debate has come to symbolize the changes that are occurring in traditional patterns of institutional interaction [1, 2]. The roles and legitimacy of existing institutions are being questioned [3]; seats of power are shifting; conditions under which decision-making occurs are being altered [4, 5] and new social and political modes of action are being generated [1, 6, 7]. Furthermore, the gap is widening between the policy-makers and society. The rights and role of policy-makers to determine the future paths of society are being challenged. Yet the processes being used to resolve the debate do not reflect the peculiar characteristics of the energy debate itself. What has resulted is a stalemate in energy policy that will only be broken as part of a much more profound social and political transformation [1]. The nature of that transformation is complex and the factors that impact the speed and direction of the transformation are numerous. Regardless of the policy decisions made, the changes going on in society will have a significant impact on any successful policy that is formulated.

Energy and economics Economic growth and change. Economic growth is an important element in any period of change. When an economy is growing, resources and options are available, and the costs and benefits associated with change can be more equitably distributed [1, 3]. Conflict is mitigated, and stress is, therefore, greatly reduced in the society as a whole. When economic growth is curtailed, however, the will and ability of an institution to cope with change are reduced. "Economic management and investment decision-making become heavily preoccupied with immediate or short-term concerns," [l]. Unequal distribution of costs and benefits become more prevalent and political and social dissatisfaction arises. Internationally, there is a movement away from unrestricted trade and toward protectionist policies. The energy debate is taking place in a time of economic curtailment. National economies today are retrenching. Institutions are toying with new energy policies but, basically, are sticking to old, comfortable and familiar modes of action, and they are resisting demands for change. Short-term supply-side energy options are being increased with little concern for the long-term impacts or support for new alternatives. In the past, energy policy was based primarily on national goals and priorities. Although energy was bought and sold on the international market, it was not until the 1973 embargo that the true international nature of energy was fully realized. But instead of responding to the interdependencies of the world energy market, countries became increasingly nationalistic in their policies. Not only in the energy arena has this occurred. "For only the second time in 20 years, growth in world trade is at a standstill.., and





the forces of protectionism are again on the march,"

(Business Week, 8 March 1982, p. 16). Few countries are totally energy self-sufficient. Yet the development of national policies that are consistent with international policies and conditions is difficult and complex. Different societal structures respond differently to different energy systems and strategies [8-10]. Nations have differing capacities to change [1]. National goals and policies may clash with the global goals. Even if the goals are the same, the means to achieve those goals may be different. Energy poliey.formulation. There has been a commonality of approach to energy policy among the western nations. Prior to 1973, energy policy was predominantly ad hoc and supply-side oriented. Government incentives were distributed in different forms by all western countries to stimulate conventional energy production. The types of incentives used differed by country depending upon the philosophy of the government, the degree of national energy self-sufficiency, and the level of economic activity. In no case was there any substantial or dedicated policy to stimulate policies for conservation and energy efficiency or for research in non-conventional energy supply options [11, 12]. With the advent of the first embargo, energy policy focused on meeting near-term shortfalls while investigating longer-term societal needs. Two policy approaches were undertaken. The first was an accelerated and strengthened continuation of existing policies. In the U.S., Project Independence was an "heroic effort to acquire more energy" [13]. Proposals called for further offshore exploration, development of Alaska's North Slope and steppe d up building of nuclear power plants. Strong nuclear power programs were launched in Norway, Sweden, France, Switzerland and Germany; increased oil exploration in the North Sea was supported by Great Britain and the Scandanavian countries; and the Canadian policy was almost exclusively aimed at developing indiginous fossil energy supplies [14]. The second approach was aimed at promoting energy conservation and increased energy efficiency. Information dissemination, financial assistance, pricing policies and other regulations were standard approaches to reach and stimulate consumers to conserve. Funding of research and development for alternative energy options, renewable as well as fossil, was undertaken for the long-term needs [15]. Unlike supply-side policies, governments were unfamiliar with implementing demand-side programs. Most industrialized nations did not understand consumer behavior and were unaware of how to stimulate that behavior to change. Furthermore, consumers were reluctant to change. While verbally declaring that change was good, consumers accepted change only as long as it happened to someone else. Conservation was considered deprivation and "doing without." Mixed messages confused consumers and elicited a mistrust of government policies, pro-

nouncements and predictions. People were unwilling to put national good ahead of self-preservation. Ignoring the fact that such fundamental change takes time, the government approach was to accelerate the rate at which the change would occur. Discontinuities and disruptions occurred in society, and governments suffered even greater losses of credibility. Difficulties in implementing the conservation policies were also enhanced by similar sets of political and institutional constraints. There was a bias among decision-makers toward high technology and centralized energy facilities; a naive knowledge of the highly complex institutional structure of the energy market; public mistrust of government intervention in heretofore private activities; conflicting priorities between liberals and conservatives, federal and local governments; and a divergence of government energy goals with societal values. In spite of these difficulties, progress was made during the late 1970's. New energy policies were implemented and more social responsiveness was observed in the political process. But the economic conditions continued to deteriorate, and by 1980 the economy became once again the primary political concern. The results for national energy policies were devastating. In the U.S. situation, for example, Ronald Reagan was elected President, taking office with a strong public mandate for a return to "normalcy." He took this mandate as a support for a beefed-up nuclear power program and a systematic dismantling of the conservation and renewable energy research programs. Where public debate and participation were beginning to occur in the implementation of energy policies, they were greatly reduced. Throughout most western countries, renewable energy options and conservation programs were scrapped or greatly reduced as disposable pawns in economic policy-making. Coupling of energy and economic policies, In current political philosophy, economic and energy policies are inextricably entwined. As countries try to deal with their declining economies, energy policies and programs have been ravished. In order for the longterm energy planning that is needed to occur, energy and economic policies must be decoupled. The rapid post-World War II economic growth in the industrialized world has been associated with, and accompanied by, a steady increase in energy consumption. In the 1960's, there was an almost one-toone ratio of growth to consumption in the industrialized countries. Unfortunately, this close historical correlation between economic growth and energy consumption has contributed to a widespread belief that sustained economic growth requires an increasing consumption of energy. National energy policies have reflected that belief, promoting ever increasing exploration for fossil fuels. Energy has been an essential factor in economic growth. However, energy consumption per dollar of

BARBIERI: ECONOMICS AND CHANGING LIFESTYLES Gross National Product (GNP) peaked for most industrialized countries in the early 1900's and has been declining ever since [13, 16]. In addition, energy efficiency has steadily increased. For example, total energy use in the industrial sector of the United States declined six percent from 1973 to 1978 while industrial output increased by 12~o (CEQ, 1979). From 1975, Energy use grew only at 70~o of GNP. In 1978, growth in the G N P was at a rate of 3.9~o while energy grew at only 1.9~ [13]. Long-term economic growth in the industrialized countries has been due primarily to technological change and the changing nature of the economy and society rather than to the increase in energy consumption [13, 16]. Energy is only one of the factors of production and, as such, must be utilized in conjunction with other factors such as labor, capital, materials, and technology. In other words, energy is one of a number of variables decision-makers must consider when making economic decisions. It alone is not sufficient to stimulate economic growth. Thus, energy and economic growth are related but not directly coupled. While the synergism between the two cannot be ignored, the process of developing the policies required to achieve stability in each area must be developed independently. The decision-making process. Politics and its institutions are the means by which society organizes and deals with conflict [4]. The outcome of conflict resolution to the existing institutions is extremely important--it determines which actors have legitimate claims and interests in the political process. The rights and influences gained are important future resources to the decision-makers. Thus, the decisionmaking apparatus will take actions to safeguard its established position rather than risk that position through adopting change [3]. It will seek to minimize conflict [17] and will select the least controversial or risky conflicts to negotiate. Thus, it is not surprising that conservation policies in most countries have held a distinctly lower priority than policies to increase energy supplies. Commitments have been made to existing ways of dealing with energy decisions. The dilemma facing the decision-making process, particularly in a period of change, is that their ability to solve new problems is limited by their very design and functioning [2, 4]. These well-established administrative problem-solving systems are likely to fail when faced with radically new problems because of built-in barriers and, in some instances, active opposition to any learning and restructuring of needs that deviate from established ways of thinking about and dealing with the problems. The difficulties and apparent inability of institutions to deal with the energy dilemma and the new constraints being forced on these institutions have been the topic of wide debate. The debate has ranged from the inadequacy of information for energy analysis [8 10, 18, 19] to the decision-making apparatus itself [4, 5].


Davos [5] sees two factors predominantly underlying the paralysis. First, the interdependencies among social values, including those for energy, within social values, and among different publics necessitate critical tradeoffs that are difficult to evaluate. Second, scientific input does not foster definitive conclusions helpful to the decision-makers nor attuned to a public interest. Sorensen [8-10] further states that the major obstacles to a comparative assessment of energy systems that any decision-making process must undertake are the existence of unacceptable impacts and the large uncertainties that often accompany these impacts. Theoretically, energy systems should not be accepted if they have adverse impacts or if the uncertainties surrounding the systems stretch into unacceptable regions of public values. If a society has agreed on those impacts it considers unacceptable, the energy decisions can be made with relative ease. But society cannot reach a consensus, or even agree to disagree. Reflecting their constituencies, the decision-makers see no clear path to determine which energy option or approach to take. Therefore, they will select the path of least resistance. It is easier to evaluate and make marginal modifications to existing energy systems rather than decisions calling for a complete energy transition. Change will ultimately require a consensus between the conflicting concerns or an agreement on the groups of the conflict. Administratively, when consensus does not occur within the existing framework, the conflict issue must be redefined. The issue must either conform to the administrative process, or new strategies must be developed which include changing the action possibilities and constraints (Andersen, 1980). Change can be accomplished by cooperation with the differing factions; maintaining an open conflict; or by changing the rules of the game, i.e., redefining the conflict. To date, most western countries have temporarily resolved the energy conflict by changing the rules of the game, e.g., they have withdrawn the conflict from the debate [3]. In Norway, for example, local referenda were held to determine siting for nuclear power plants. In all cases, the nuclear option was defeated. Unable to proceed with the nuclear option, and unwilling to formulate alternative energy options, the Norwegians pulled nuclear energy out of the political debate. In effect, energy policy had been put on a back burner [3]. Central to the decision-making dilemma have been four constraints on the ability of public decisionmaking to function efficiently [5]. First, there is uneven access to information among interested parties. Not only is the access uneven but often the information is erroneous or incomplete, distorting perceptions and the validity of decisions. Second, there is an unequal capacity of participants to understand and assimilate technical information. Third,



there is unequal leverage of the participants on the decision-making process. Finally, there is the manipulation of the participatory process by the decision-makers. As the rise in public participation has occurred, decision-makers see an opportunity to gain political advantages and thus may bias the decisions that are taken. This has furthered the social pressure on the political institutions to change and on the demand for public participation in the process. Change will require modifications of the decisionmaking system to meet the new demands placed on it. The alternative to change is more conflict, this conflict will likely take place outside the system. Conflict can only reduce the efficiency of government institutions and bring a decline in the legitimacy of these institutions [3]. If the conflict proceeds far enough, it could result in a paralysis of the decisionmaking apparatus. The paralysis could ultimately, "lead to panic and ill-considered policies on the grounds of 'imminent emergency'" [1].

Energy and social change Changing lifestyles. Since the mid 1960's, western society has been going through substantial restructuring and reevaluation, a process that will apparently continue for the next several decades. This social change is heavily impacted by two factors: first, changes in the structure of society and societal interactions; and second, increased public disillusionment with the policy-making institutions and increased public pressure for a more open decision-making process [6]. The major structural changes continue to be the movement of employment from heavy manufacturing and agriculture to the services and information industries. Jobs are increasing in finance, management, government, transportation, education, and communication [20]. Simultaneously, there has been a steady increase in specialization, division of labor, centralization, and mass-production, as well as a growing anonymous bureaucracy. Increasing leisure time, the changing role of women in society and the workforce, telecommunication, and the growth of personal computers are all changing the ways society interacts. The structural changes in society have released the individual from previously work-intensive lives. The job is no longer the center of existence [21]. Society is moving toward what one author has called "postmaterialistic values" [20]. In other words, the individual is becoming involved in issues and concerns outside of his or her immediate environment. It can be seen in the growth of the social movements-women's liberation, environment, peace, decentralization and self-reliance. However, both the changes in society as well as the individual's changing role has created negative responses as well. "Within the OECD countries there is a many-sided crisis of withering social relations; an increased stress in faceless daily contacts and nar-

rowly effective, compartmentalized work; a deteriorating environment; a threatened natural resource base for coming generations; and a more overt sexist and cultural oppression" [22]. The growth of the autonomous bureaucracy has created, in those on the periphery of power, a feeling of greater distance and alienation from those in the center [8 10]. In essence, there is a power struggle going on between the existing power structures and the public who desire involvement in the control of that power [6]. Finally, this change is happening during a period of economic deterioration. As confidence in the economic system and political bureaucracy dwindles, increased dissatisfaction, alienation and social conflict occur. The conflict of values. Perhaps the most difficult dilemma facing energy policy-makers is the fact that society actually holds dual conflicting values about the energy options, and the future course society should take. From the rhetoric of the past 9 years, two basic energy alternatives have emerged. One is characteristic of most western national energy policies as well as most industrial institutions. It is based on moderate growth in energy use with an emphasis on fossil fuel, coal and nuclear. The other alternative places strong emphasis on efficient use of energy and the ultimate replacement of fossil energy systems with renewable ones. We are in a period of transition. Neither can society instantly go from its existing energy systems to a new one, nor is the new one capable of meeting the demands which society would place upon it today. The conflict in society is that society values parts of both systems [17]. It values the future portrayed by the "soft path"--environmentally clean and decentralized. Also society values what it seems the fossil and nuclear options have given it, namely, material goods, comfort and leisure time. It does not want to lose those. Yet society does not see the renewable options maintaining those comforts, particularly not during the transition. While there may be similar economic values, there are significant differences between the consumer and the institutions in terms of how they view the energy options socially. In a 1981 study, Sorensen undertook an assessment of the perceptions of individuals toward the compatibility of those two systems with a range of social goals. He found that the proponents of a nuclear and fossil path (System A) saw energy choices as largely neutral with respect to social issues. Those who favored the "soft path" (System B), on the other hand, saw energy choices more strongly linked to social issues and social choices. Both categories saw their own system as more compatible with social values than the other one. In addition, System A proponents saw the problems of System B as economic while System B proponents saw the problems of System A as mainly environmental and social. Joerges [17] further described the conflicts between the systems as those of environmental and social

BARBIERI: ECONOMICS AND CHANGING LIFESTYLES compatibility. By social compatibility he refers primarily to the extent to which energy systems are acceptable to households as end-consumers of energy. By environmental compatibility he refers to the extent to which energy systems leave intact or improve the quality of communal space. The fact that the majority of people actually endorse both sets of values creates a value stalemate. Insofar as this shapes people's willingness to act, it puts a strong constraint on development of a national conservation policy or a "soft" path. Until that internal, individual conflict can be resolved, it will be very difficult for any strong national energy policy to be achieved. S E A R C H FOR A R E S O L U T I O N

Energy is an integral part of society today. In the choice of energy options are the perceptions of desire and degree of governmental control, selfdetermination, independence, stress and complexity of society, environmental impact, lifestyle, security, social welfare and a view of what the future should be. The energy options will be evaluated by an individual according to the degree of risk perceived in a particular energy option; to the extent the individual is directly affected by the option; to the effect on his or her economic and social welfare; to the correspOndence of the option to the individual's socio-political and social values; and to its effects on his or her ability to cope with the future [18, 19].

Education and information dissemination Adequate and timely information is a necessary ingredient for decision-making, particularly in a time of political and social transformation. It is through the process of education and information dissemination that knowledge to make decisions is acquired. Yet both educational and informational activities have been less than effective in educating the public on energy or on providing the public with the information it needs to make energy decisions. In a study of consumer behavior and energy demand in German households, Iblher and Brog [23] showed that even for the percentage of households able to afford conservation investments and willing to make those investments, the information available to them was inadequate for making a decision to conserve. Iblher and Brog went further to state that improvements in technology, laws or subsidies would only incrementally increase the number of conservation decisions made. Only improvements in the availability and adequacy of information would produce substantial reductions in household energy use. In terms of facing political and social transformation, educators are just as stagnated as the policy-makers. New activities are important to stimulating and implementing any change. Not only does the role of energy need to be rethought in terms of


how it is taught [24, 25], but administrators need to provide support for teachers to be innovative. Parents need to be supportive of educational institutions not just as a means for promulgating ideas and values of the past, but as a means of learning, advancement, exploration, and adventure. The community needs to be used as a resource for the schools.

Public participation and the decision-making process There has been a general growth of the "ideology of (public) participating in the science and technology decision p r o c e s s . . , in order to make political systems more responsive to societal needs" [6]. As Davos [5] stated, there is an inequality of information; access to that information is unequal; and the resultant amount of leverage individuals can then have on policy-making is also unequal. With the tendency of the political bodies to manipulate events in their favor, the public must become more involved in those areas which particularly concern them, such as energy. Historically, some form of public participation has always been part of the democratic decision-making process. It stems from the belief that "participatory democracy" produces better citizens, a better political system, and better decisions. The Belgian national government funds public organizations to keep a two-way channel of information flowing between consumers and the policy-makers. Sweden has had its government-funded "study circles" to inform the public, in particular, of the nuclear power option [1], and the U.S. has its Office of Consumer Affairs. Public participation is also a communications device to channel information into the administrative decision-making process. Citizen review boards and advisory groups are the most common form of on-going participation. Also, when the participatory decision-making does not occur to the public's satisfaction, the referendum can be used, although it is more of a one-shot nature and often is reactionary in intent. In Norway, local referenda kept nuclear power plant sites from being approved [26]. In Germany, a national referendum forced the government to reevaluate its energy policy, and particularly, its nuclear policy. In the U.S. numerous states have held referenda protesting the siting of fossil and nuclear power plants. Certainly the referendum is not the most efficient mechanism for policy-making, but it is an effective voice of public concern when all else fails. Public participation seems to increase in times of conflict and transition. It can alter power relationships and legitimize decisions. It is also a means to resolve conflict, to reduce tensions, and increase understanding. As a Rycroft and Regens [6] say, "It may be a form of social therapy to reduce alienation on the part of citizens." The outlook and behavior of the involved citizens may be altered by public participation, and a greater awareness of the wider public interests may result. "Involvement by a broad range of parties may pro-



mote greater equity in the distribution of costs and benefits of energy policy by acting as a countervailing influence to offset elite biases and ensure political accountability. A n d citizen participation can also lead to greater societal resilience and the capacity to withstand disturbances" (October, 1979). Joerges [17] points out that when groups are effective, it is most often at the point of implementation of an energy policy, e.g. stopping the siting of a nuclear power plant, rather than in the initial planning process of that policy. Public participation needs to be made a legitimate part of the policymaking process and not just a reactive, protesting, after-the-fact activity. The City of Seattle, Washington, for example, found that by developing their energy policy in an open public forum, the longer initial formulation time was more than offset by the reduction in what had become frequent lawsuits and protests over city-formulated policies [27]. Lassiter [7] is working with the concept of public participation with industry. Advisory groups to industry and industry participation in societal activities could promote greater industry involvement in social issues. With reduced levels of government spending, industry could define cost-effective initiatives they could use to meet public needs. As the environmental movement has shown, unanticipated public dissatisfaction can create untold economic and political havoc for industry. Increased social responsibility would improve the relations between the public and i n d u s t r y - - a situation which could lead to new innovative energy solutions as well as increased cooperation between industry and the public. Focus on local and regional activities

While national and international energy policies have been politicized and any significant action has stagnated, local and regional programs have blossomed. Concerned with their immediate environment and future, citizens have rallied in different ways to fight for or against energy alternatives [28]; communities have worked together to search for new energy alternatives [29, 30]; regions have successfully fought what they felt were unacceptable energy alternatives [3]; and under fire from the public and their public utilities commissions, utilities have sought ways to respond more effectively to consumer concerns [15]. The possibilities and prospects for public participation are greatest at the local and regional levels. People are emotionally involved in their communities. The channels of communication to policymakers are more direct and intimate. When energy policies impact the consumer in his or her own backyard, he or she will act. The schools and community resources are available. "Change agents," leaders of industry, and social movers are widely known. A great deal can be done immediately and effectively to accomplish the energy transition. At the national and international level, the time is ripe with opportunities to work on new solutions,

new institutional relationships, and new ways of using energy. The speed and degree to which existing institutions face these new challenges and opportunities will greatly influence how smoothly and quickly we move through the energy transition. REFERENCES

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