With three years and counting of data, a clear trend has emerged: consumers are more concerned about how energy impacts the environment than they about whether it is sufficiently affordable and reliable. The extent to which consumers worry about reliability — that is, whether their lights stay on and the fuels they need are readily available — has consistently lagged their concerns about energy costs and environmental impacts.
Over the first four quarterly samples starting with the launch of the U-M Energy Survey in October 2013, the difference between the levels of concern about the environment and about affordability was not statistically significant, even though the average for the environment was nominally higher than that for affordability. However, the significance of the gap grew as additional data came in. By the second year, we were able to report that the environment had pulled ahead of affordability as Americans’ top energy-related concern. As seen in the chart below, based on data over the first three years of the survey, concern about affordability has lessened a bit in 2016 while concern about the environment has remained strong in spite of some transient ups and downs.
During the survey, we ask respondents to choose one of four responses to questions about how much they personally worry about these three energy-related issues. The possible responses are “not at all,” “only a little,” “a fair amount” or “a great deal.” We analyze the answers using what is known as a 4-point Likert scale. For charting the trends as shown here, we re-scale the average responses so that a value of zero corresponds to “not at all” and a value of 100 corresponds to a “a great deal” of concern about a given issue. A value of 50 then reflects a neutral level, that is, a set of responses that averages out to neither concerned nor unconcerned.
Concern about the affordability of energy has been essentially neutral in recent months, averaging 49 (+/-3) as of our most recent quarterly sample, from July 2016. In contrast, concern about the impact of energy on the environment stood at 61 (+/-3) as of July.
A notable drop-off in the extent to which Americans worry about energy costs was seen in our January 2015 quarterly sample, the one that followed the decline in gasoline prices that occurred in the second half of 2014. (See our earlier post about the marked shift in views on gasoline affordability that occurred during that time.) Environmental concern held steady while the already lower concern about the reliability also dipped with the January 2015 sample. Trends in consumers’ expressed degree of worry about affordability and reliability have tracked similarly since then, both trending down in 2016. In contrast, concern about the environmental impact of energy has gone back up to the level of just over 60, which has been its high point several times over the past two years.
Over the three years (12 quarters) of Energy Survey data analyzed so far, the average degrees of concern are 59 for the environment, 52 for affordability and 38 for reliability. Again, a level of 50 is the neutral point; the value would reach 100 only if everyone surveyed were to answer “a great deal” in response to our question about the given topic.
The consistent finding that consumers’ concerns about the environmental impact of energy are greater than their concerns about the cost of energy stands in contrast to those of other surveys that pit the environment against affordability as a trade-off. Our results show the value of using a psychological rather than economic frame of reference when probing what consumers believe. Thus, consumers have the capacity to be concerned about both issues in a manner that is not mutually exclusive.