CICERO - Center for International Climate Research

Does change in ownership affect community attitudes toward renewable energy projects? Evidence of a status quo bias

Kristin Linnerud, Toney Philip, Morten Simonsen, Erling Holden

The distributed nature of many renewable energy technologies allows for new ownership models as well as frequent ownership changes. We analyse whether a change in ownership negatively affects community attitudes toward a hypothetical small-scale hydropower plant. We use a two-stage framing experiment and a student sample. We find that a change in ownership has a significant negative effect on their attitudes toward the project, irrespective of whether the change is from a national to a local owner or vice versa. We interpret this finding as an example of a status quo bias, that is, a preference for the current state of affairs. A status quo bias makes renewable energy transitions more challenging, at least initially. Over time, as the status quo shifts, this may become less of an issue. We conclude the paper by discussing the robustness of our findings as well as whether and how policymakers can reduce the impact of such cognitive biases.

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