Leveraging the Motivational Effects of Labels: Lessons from Retrofitting

Retrofitting—replacing obsolete home infrastructure with more energy-efficient substitutes—will be essential to reducing energy use and carbon emissions in the future. Yet European and American households have proved reluctant to undertake these changes. Evidence has shown that a home energy audit can motivate people to retrofit their homes. In this article, we show that including the EU energy label—which displays the property's energy-efficiency rating—in energy audit reports is a simple way to enhance the audit's effectiveness: When energy labels are required as part of the process of selling a property, home sellers become motivated to retrofit if doing so boosts their property into a higher efficiency category on the label. Drawing on insights from the behavioral science literature, we offer suggestions for how policymakers can leverage this motivation to expand household investments in retrofitting. Although our proposals focus on retrofitting, some of them could also encourage other actions that would reduce energy consumption.