Everyone wants a clean environment and the lowest possible emissions. Likewise, everyone also wants affordable, reliable, and efficient heating, cooling, and water heating equipment. Heating, cooling, and water heating are not luxuries, they are necessary to ensure human health, safety, productivity, and comfort. While the United States, Europe, and most of the rest of the developed world seek to implement ambitious policy initiatives such as the F-Gas regulation, the challenge for policy makers around the world is how to ensure that the desire for environmental protection and access to affordable, reliable heating, cooling, and water heating can happen simultaneously.
The HVACR and water heating industry has the technological solutions, but to be successful in the long-term, sustainability programs must be carefully considered and implemented in a manner that takes into account economics, human nature, energy supply, and technological capabilities. The recent EU parliamentary elections demonstrated that while environmental aspirations are good, their implementation must be carefully crafted to ensure economic and political viability.
COST IS A KEY CONSUMER CONSIDERATION
The cost of green energy and highly energy efficient products and equipment has always been one of the — if not the — greatest barriers to widespread acceptance and use. The simple fact is, when considering new or replacement equipment, whether it is cars, appliances, or HVAC and water heating equipment, most consumers prioritize first cost over other considerations. That means that encouraging them to adopt more efficient, “green” goods must be done in an inclusive, measured, carefully considered way. Even in prosperous economic times, numerous analyses have indicated that consumers are reluctant to pay more than they consider necessary for items that aren’t deemed luxuries.
Consumers might overwhelmingly indicate in polls that environmental protection is a priority, but it’s important to consider that those answers are in the abstract. When higher initial costs are involved, the promise of sustainability and future cost savings might not be sufficient for many consumers. According to recent data, the average American consumer, for example is simply not in a financial position to lead the charge on the sustainability front. A survey taken by The Motley Fool Ascent in July 2023 found that the typical American has just $1,200 in their savings account, which is nearly three-quarters less than the $4,500 they had in 2022. Another survey points to the inability to save money as the major driver of that sudden drop off, finding that in the current economy, a third of all Americans say they’re not able to save at all. On top of that, more than half of the population in one of the wealthiest nations on earth admits to living paycheck-to-paycheck.
Data from Europe show a similar situation. As a whole, the European Union saved an average of 12.7% of their income during 2022, according to data from Eurostat. That rate is down from 16.7% in 2021, and despite a positive average, both Greece and Poland recorded negative rates, meaning people were not only unable to save any money, but they had to use previous savings to cover monthly expenses.
The data presented above demonstrates quite clearly why a large, unexpected purchase such as a new air conditioning system, furnace, heat pump, or water heater is so economically challenging for so many, on both sides of the Atlantic. When faced with a decision that is almost always an emergency, the least expensive, like-for-like option often wins out, regardless of the potential long-term advantages of more efficient — and therefore more expensive — units. To ensure sustainability is sustainable long-term, governments, regulatory agencies, and the industry must meet people where they are. The current financial situation shows us that people will not go out of their way to pursue sustainability because it’s the “right thing to do.” If, in a perfect world, the cost of fighting climate change was an additional $1 a month, only 57 percent of Americans would be in favor of making that payment. If the number bumped up to $10 a month, support drops to just 39 percent. While there is growing belief that climate change can be addressed, in part, through human actions, many supporters draw the line at spending their own money to implement these changes.
All is not completely bleak, however. There is growing evidence, compiled in an Energy Policy Institute of Chicago (EPIC) poll, that people will engage in green energy practices if it benefits them in a tangible way. For example, there is widespread acceptance and support, across generations, for actions that will save money on energy bills, such as turning off lights in empty rooms, reducing heat and A/C use, and buying an energy efficient appliance. While the motivation for these behaviors is financial, the end result satisfies the goals of both the consumer and the environment. We see another example of this thought process in Europe, where YouGov conducted a large public opinion survey surrounding climate change and sustainability. The survey found widespread support for initiatives to make homes more efficient by updating appliances and systems to reach certain energy efficiency levels. However, the support hinged significantly on how these upgrades were being financed. Using Spain as an example, 86% of people surveyed were in favor of making these changes if the upgrades were funded by government subsidies. But, if the cost fell to the consumer as a personal expense, support dropped significantly, to just 40%. This gives us another specific example of willingness to embrace sustainability, but only under specific conditions.
CREATURE COMFORTS AND LIFESTYLE PLAY A SIGNIFICANT ROLE
The same YouGov survey also offered insight into how far individuals are willing to go when it comes to sustainability. Large majorities in the seven countries surveyed – ranging from 60% in Sweden, 63% in Germany, 65% in the UK to 77% in Spain, 79% in France and 81% in Italy – said they were very or fairly worried about climate change and its effects. Those surveyed agreed on a few basic tenets:
- Human activity is contributing to climate change,
- Individuals should take some action to reduce the effects, and
- A broad, international approach would be the most effective way to address it.
However, the majority of the group, which is largely supportive of green energy and indicated that they are willing to take personal action to address climate change, draws the line at lifestyle changes.
There is significant support for measures that do not involve any major lifestyle “sacrifice,” with two popular options seeing widespread backing. Of those surveyed, between 45% (Germany) and 72% (Spain) support a government tree-planting program, and 60% (Spain) and 77% (UK) say they would grow more plants themselves if they weren’t doing so already.
There is also widespread support for measures that put the onus of sustainability onto businesses or the government. Between 40% (Denmark) and 56% (UK, Spain, and Italy) of respondents said they would “happily” never buy products made of single-use plastic again, while between 63% (Sweden) and 75% (Spain) would support a government ban on them.
However, when surveyed about measures that would directly impact their day-to-day life, support plummeted. Asked whether they would be willing to switch to an electric car to cut carbon emissions, an average of just under a third of respondents across the seven countries surveyed – ranging from 19% in Germany through 32% in Denmark to 40% in Italy – answered positively. Measures designed to cut back on fuel use were also very unpopular. None of the countries surveyed had a positive view of an increased fuel tax, and there was major opposition to a ban on fossil fuel vehicles, especially in Germany and France.
In short, the growing prevalence of this viewpoint means it’s more important than ever to ensure that sustainability is simple, accessible, and has clear, measurable benefits. Polling shows that people simply aren’t going to go out of their way to pursue green options.
DISCONNECT ON NEED FOR INCREASE IN ENERGY SUPPLY
This growing, negative sentiment coincides with the implementation of the Inflation Reduction Act (IRA) in the United States. Many of the components, like rebates for energy efficient appliances, have been widely accepted and embraced by states and consumers. But the steps that would provide long-term sustainability of a green energy supply still have a mixed response. The IRA specifically provides historic incentives for renewable power, and the Biden Administration reported that more than 280 clean energy projects are underway across 44 states. Despite that, Americans remain lukewarm on the construction of the high voltage power lines that would be needed to distribute and ultimately deliver that clean electricity to consumers. Only 56 percent of Americans support a proposal to construct high voltage lines that would transport renewable energy. The support drops at least another 10 percentage points when people were asked if they would support new power line construction in their neighborhood.
This disconnect becomes a more significant barrier to sustainability when considering the focus of recent sustainability initiatives. The IRA set aside $8.8 billion for energy efficiency and home electrification rebates, with the goal of pushing consumers toward investing in the technological advances in HVACR equipment, such as heat pumps and electric appliances. But if the renewable energy to power these homes isn’t available, then the sustainability initiative cannot, at least for the foreseeable future, be considered sustainable.
SUSTAINABILITY REQUIRES REALISM AND A MEASURED APPROACH
Now, more than ever, sustainability measures must take more than just the environment into account. Initiatives for clean energy and efficient appliances require widespread compliance to be effective, but in their current state, many sustainability programs fail to address one or more of the key aspects of economics, human nature, energy supply, or technological capabilities. In many cases, especially within the HVACR industry, the technology has advanced in a way that can bring about real change. But to reap the benefits of these developments, regulators, manufacturers, and other industry stakeholders must find a way to make it realistic at every level. It will not be easy, but if we are to be successful in the long term, it must be done.
Stephen R. Yurek