Hi, I'm John Byrd and welcome to week two of Become a Sustainable Business Change Agent, MOOC Specialization. This week we're talking about some of the first sustainability changes you might make in your company. In the previous lecture we talked mostly about lighting, which is a place to find great high-return opportunities by switching to LED bulbs. That change might not apply to your company so we need some other good ideas. In this lecture I want to introduce a few ideas from behavioral economics that can be very useful. Especially if you have a limited budget, or no budget at all, for making these kind of changes. Remember the chart I showed you about how electricity is used in buildings? Here it is again. HVAC, the heating, ventilation, and air conditioning consumes about 44% of all energy. Lighting and refrigeration are about 20%. Heating and cooling are harder to make efficient than lighting. Because they usually require an energy audit, then investments and insulation, caulking, and maybe new doors and windows. These are relatively low cost improvements, but new high efficient furnaces and boilers can be huge investments. However, there's one simple approach to saving energy on heating and cooling. Slight changes in thermostat settings can produce pretty significant savings. Programmable thermostats make this easy to do. I've seen estimates of a 10% to 33% energy savings from adjusting thermostats down at night and on weekends in offices. This is where behavioral economics comes in. It turns out that people use rules of thumb and shortcuts to make a lot of daily decisions. They also have some biases that prevent them from doing some things. One behavioral bias is to accept the status quo if it's okay. That means that whatever the default setting on something, like a thermostat is, becomes the temperature setting until a space gets uncomfortable and someone changes it. Knowing this, we can use default settings to conserve energy in some other materials. Another very simple way to save electricity is to make sure that computers are set to sleep mode. This is that default setting idea again. For my computer, an iMac, when it's running at maximum capacity, it can use 215 watts. Idling with the screen on but not processing anything uses about 60 watts. But when it's asleep, it uses 1.13 watts. So 1 watt. These numbers are all for Apple. Notice that a screen saver is like idle, it doesn't save much. To save power, you need sleep mode, or the deeper hibernate mode some computers have, though it takes longer to wake them up from hibernation. When the computer is asleep, at 12 cents a kilowatt hour for electricity, it uses $1.20 per year of power. Computer manufactures have figured out how to save energy. So it isn't necessary to turn them all the way off every night, but be sure that the default is set into sleep mode. Another place you can save money using this default setting idea is printing. Just in the last couple of weeks I've heard two people say oops, I meant to print two-sided. Setting the printer so two-sided or duplex printing is the default would prevent these kinds of mistakes. Even if people still opt for one-sided printing most of the time. You saved a lot of paper from being wasted or from being used unnecessarily. Printing invoices and bills or paying them through the mail uses resources. Using email for invoicing and bill paying saves money in postage and the impacts of transporting the letters. We still get paper bills through the mail from our doctor's office. I call and I pay it by credit card, so could easily have gotten an email invoice or bill and done the same thing. More and more I'm being asked if I'd like my receipt to be emailed to me. Setting up electronic billing, and bill paying as a default, could save a lot of money. If you investigate a bit further, you'll find other ways to use electronic bill pay. For example, we can renew car licenses online. Which means not driving to having to stand in line at the DMV office. Default settings can also be used if your utility offers time-of-day discounts. For appliances with timer setting it to run, if they can run unattended anyway, late at night when electricity demand is low can save money. The size of power plants is determined by peak demand load. If everyone wants electricity at the same time, that means more or larger power plants have to be built. Or that existing ones have to be run at inefficiently high levels. By leveling out the use of power plants they can usually run more efficiently, producing less pollution. Another result from behavioral economics that's relevant here, is that people respond to peer pressure, even indirect peer pressure. What economists have found, is that if water bills tell people how much water their neighbors are using, and if they're above that average, they tend to reduce their use. This works for electricity consumption, office waste, and setting thermostats. Having information about what the norm is, especially if the norm is a group you identify with like coworkers or neighbors. That encourages you to move toward that norm. I don't know if people who use less than the norm increase their consumption, but there are results for reductions by over-users. If you can find a way to share information across workgroups about their energy, or paper use, or recycling rates, you might be able to use this peer effect to make improvements. But how you can get that sort of information for an entire office, or store, or facility? It isn't perfect, but an energy audit can give your company a norm. The norm is everything that it can do to save energy. So the peer group becomes excellence. Not a specific group of people or companies. This might be a great first step. An expert can identify where energy is being wasted and used inefficiently. They can also give you a list of improvements with approximate costs. Some electric utilities share in the cost of an energy audit. Our local electric company, LPEA, offers up to $150 to households and $300 to businesses to have an audit done. Having information about peer behavior can be helpful. Just having information can be helpful. It may be that energy consumption Is not a criteria you use to make purchase decisions at your company. There's lots of information about the comparative energy use and that's the cost of operating similar appliances or electronics. This label shows that similar appliances, in this case a room air conditioner, have an annual operating cost from $105 to $224. Since cost of operation is tied to energy efficiency, we think a lower cost would mean less electricity use. This assumes that the capacity and performance are the same or very close to all of the units measured in this graph. Sometimes people just need help conserving energy. Now, here’s where technology can help. For example, motion sensors can turn off lights when a room's unoccupied for some period of time, and then turn them on when somebody comes in. You have to be careful where you use these. Bathrooms, storerooms, and closets are usually good places. General office space where people sit to work without moving often, means the lights suddenly go off, leaving them to work in the dark. Also, high-traffic areas, where the switch would be triggered on and off too often, are not good choices. A topic that was a big deal about five or ten years ago is phantom load or vampire power drain. This is electricity used when appliances are in standby mode waiting to be used. A TV uses a little electricity waiting for the remote to turn it on. Originally people thought that maybe 5% or 10% of household electricity was used in the phantom mode. But new appliances and electronics use less than one watt in standby mode. So this is not a place to find big energy savings. This is also great news. Manufacturers are responding to environmental concerns with better products. And embedding some of the green design principles we're going to talk about, into their product design. One final idea about energy, is to buy green energy. Many utilities give you this option. In our area it adds nine cents per 100 kilowatt hours. For the average household, this is about 85 cents a month. For businesses it depends on the type of business. Often, you will get a sign that says, you're using green energy. The benefit of this type of spending is that as demand for green energy increases, more supply has to be created. But it's all cost and no obvious financial benefit, so this probably isn't the best first project. We'll talk a lot more about energy in the next class as we address climate change and carbon emissions. This first look was to give you some ideas of places you might find productive first projects as you start on your sustainability path. Thanks.