Gauging Citizen Perspectives on Energy Policy Outcomes September 2015 Mark Peterson, Professor of Marketing, University of Wyoming David Feldman SDR Consulting, Atlanta, GA

2 Goal: Gauging Citizen Perspectives on Energy Policy Outcomes Current energy policy research Highly politicized Does not uncover citizen’s underlying importance Often biased by survey sponsor Need for a different type of research Cannot use current energy policies – already politicized Need to focus on trade offs associated with energy policies Predict level of support Understand different citizen’s perspectives

Current Study 3 Discrete-choice conjoint administered online Survey conducted in the following states: (final sample size) KY (173) MA (162) MN (166) NV (168) WY (116)

4 Example Traditional Research Current study included 5 traditional questions. Traditional research findings show many issues are very polarizing. Republicans and Democrats have significant differences in their perspectives on global warming. As will be seen, differences are not as great when considering trade-offs.

Component DescriptionDescriptionOption 1Option 2Option 3 Impact policy has on your energy costs Financial costs would include energy costs associated with your home and transportation 20% increase in my energy costs No change to my energy costs 20% decrease in my energy costs Impact policy has on greenhouse-gas (GHG) emissions GHG emissions trap heat in the atmosphere. The two main sources of GHG emissions are carbon dioxide (CO2) and methane. Carbon dioxide (CO2) enters the atmosphere through burning fossil fuels (coal, natural gas and oil). Methane is emitted during the production and transport of coal, natural gas, and oil, and emissions from livestock and other agricultural practices, and by the decay of organic waste in municipal solid waste landfills. Increase GHG emissions by 20% No change to GHG emissions Decrease GHG emissions by 20% Impact policy has on job creation in your state due to expanding new energy technologies The development of new energy technologies, including solar, wind, geothermal and batteries, has the potential to create new jobs. State’s unemployment r ate goes down 1 % No change in state’s unemployment rate Impact policy has on traditional energy related industries (such as coal, oil and natural gas) in your state Energy policy could impact traditional energy related industries such as coal, oil and natural gas, and restrict or expand its use (e.g. reduction in coal for electricity generation, or increase in natural gas for electricity generation). Reduces jobs by 10% in traditional energy industries like coal, oil and natural gas No Impact on jobs in traditional energy industries Increases jobs by 10% in traditional energy industries like coal, oil and natural gas Level for no change Components and Levels of Energy Policy Used in the study 5

Component DescriptionDescriptionOption 1Option 2Option 3 Impact policy has on environmental quality (land, water and air resources) in your state. Energy policy has a major impact on our land, water and air resources. This impact can be either positive or negative based on the particular policy. Negatively impacts quality by 2% No impact on the environment Positively impacts quality by 2% Impact policy has on the amount of renewable energy used in your state for electricity generation Mandating the amount of renewable energy that a state generates can significantly reduce greenhouse-gas (GHG) emissions. Given that the available renewable energy resources vary significantly by state, the renewable amount is more effectively decided on a state by state basis. By 2025, 25% of electricity generated by renewable energy No mandatory percent for electricity generated by renewable energy Impact policy has on your state's cost of implementing energy policy Energy policies, such as reduction in coal electricity generation, can have varying financial impacts across the country. In order to more fully implement these policies, cost might need to be shared by region or country-wide. Each state carries full cost for its implementation States in a region share costs for a state’s implementation Implementation costs shared across all US Impact policy has on your energy consumption Energy policies can impact your energy consumption through efficiency standards for heating, air conditioning, appliances, vehicle mileage, and building codes. 10% reduction in your energy consumption 5% reduction in your energy consumption No reduction in your energy consumption Level for no change Components and Levels of Energy Policy Used in the study 6

Trade off Methodology 7 Screen shot of actual survey

8 Key Findings – Massachusetts When faced with trade-offs, energy costs, GHG emissions, and environment were the most important components of energy policy for Massachusetts

9 Key Findings – Massachusetts Differences Republican vs Democrat There are differences between Republicans and Democrats but the relative order of importance is almost identical.

Energy Costs GHG Emissions Job creation RE Job creation traditional energy Environment RE Standards State's costs Your energy consumption Kentucky Massachusetts Minnesota Nevada Wyoming Difference in Importances by State 10

11 Prospect Theory Behavioral Economists Daniel Kahneman and Amos Tversky won the 2002 Nobel Prize in Economics for their work developing Prospect Theory. One of the key assertions in this theory is that “losses loom larger than gains” for most persons. Results for the Top 4 Energy Policy Outcomes reflect this loss aversion.

12 Support for combinations of policy outcomes – Massachusetts Only 41% of MA citizens would support a policy that DOES NOT change current levels for the 8 components below Support for no change to current levels 41% 20% decrease in energy cost 2% improvement in environment 20% decrease in GHG 10% increase trad. energy jobs Lower state unemployment by 1% through new RE related jobs 10% lower energy consumption RE standards mandated Cost shared with region/all US Potential Loss in support Potential Gain in support

13 Hypothetical Policy Example Slightly increase energy costs Decrease GHG emissions Increase renewable energy jobs No impact on traditional energy jobs. Positive impact on the environment Hypothetical Policy would raise level of support from 41% to 59% Policy ComponentPotential Range in Market Perceptions Energy Costs Increase in energy cost No change Decrease in energy cost GHG emissions Increase in GHG No change Decrease in GHG Renewable energy jobs No Change Reduce unemployment Protecting traditional energy jobs Lose jobs No Change Protect jobs Environment Neg. impact on environment No Change Pos. impact on environment

Gauging Citizen Perspectives on Energy Policy Outcomes September 2015 Mark Peterson, Professor of Marketing, University of Wyoming David Feldman SDR Consulting, Atlanta, GA