Association for Public Policy Analysis & Management

Academics and policymakers are increasingly interested in using “nudges” – such as information provision and persuasion (Allcott, 2017; Hansen and Jespersen, 2013) – to alter consumer behaviors. Nudges are typically inexpensive compared to price-based approaches. For example, in 2019 Chinese Development and Reform Commission required government institutions at various levels to organize publicity campaigns on the day of special environmental events to improve citizens’ environmental protection and energy-saving awareness. This paper provides the first empirical evidence of the effect of the special environmental events on both residential and non-residential consumers and also explores the mechanisms behind the effect. Specifically, we examine three popular events in China and around the world: Earth Hour, World Environment Day, and Chinese National Energy-Saving Publicity Week.

Methods

(1) The effect of the events: We adopt a two-step local-linear method to estimate the effect of the events on electricity consumption using a high frequency (15 min level) smart meter electricity consumption data from 2017 to 2018 in Shanghai. In the first stage, we fit a panel regression model using global data to estimate the effect of weather, seasonality, day-of-week on electricity consumption. Then we save the residuals which have excluded the influences of these confounding factors. In the second stage, we regress the residuals on the special environmental event variables within a narrow time bandwidth. The high-frequency data enables us to obtain enough observations within a narrow time bandwidth to further eliminate other confounding factors’ influence.

(2) Mechanism analysis: We reviewed all related policy documents and web-scraped 100,182 related social media tweets from Weibo in order to summarize all the activities related to the events.

Results

We find that the World Environment Day and the National Energy Saving Publicity Week caused commercial users to reduce their electricity consumption by 0.3 kWh/hour and 0.4 kWh/hour in the short run, around 4% and 5% reduction, respectively. However, we find an obvious “rebound effect” on electricity consumption for both residential and commercial users after the Earth Hour. Most activities adopted (as evidenced by the tweets and policy documents) during the first two events were related to actual knowledge and skills of energy saving, while most activities during the Earth Hour were symbolic behaviors like turning off lights. We also explore a possible mechanism to explain the “rebound effect” of Earth Hour. Turning off lights from 20:00 to 21:00 caused employees to be unable to work at that time given a fact that a considerable part of employees has to work until 21:00 in Shanghai. We provide simple evidence by showing that there is a significant increase in electricity consumption during off-hours on the first day after the day of Earth Hour, which demonstrates that more employees might work overtime on that day. Moreover, we find consumers tend to save electricity during peak times.

Our results are valuable for policy makers. The Earth Hour event should adopt more activities that are directly related to the knowledge and skills of energy saving, although its inimitable symbolic activity caused great public attention.