Non-White Consumers Appear to Be More Likely to Believe the Transition to Renewables Is Important

The Conference Board Survey of Multicultural Consumers conducted over the January–February 2023 period shows that just under half of US consumers say that transitioning from fossil fuels to renewables is “important.” Sentiment is strongest among consumers belonging to racial/ethnic minority groups. One hypothesis is that, as many reports have shown, these communities (albeit based on self-reporting) are disproportionately exposed to damaging environmental events.

We should note that “important” is open to the respondent’s subjective interpretation and indicates that he or she, when prompted, believes the issue of energy transition warrants consideration or action; it does not indicate the degree or type of action the respondent is willing to take.

People who earn more than $75,000 annually are more likely than people in lower income groups to agree that the transition from fossil fuels is important. Additionally, consumers who believe a transition to be important tend to skew younger (under age 55) when age is the only consideration. However, when race/ethnicity is factored into the mix, the results change. Indeed, by race and income and by race and age, those who feel an energy transition is more important are more likely to be people of color, with Asian consumers the most enthusiastic across incomes and age groups. White non-Latino/Hispanic consumers across age and income groups are more likely to disagree or be neutral on the import of the subject.

Asian consumers are the most likely to agree that the energy transition to renewables is important

Source: The Conference Board Survey of Multicultural Consumers, February 2023

A separate 2022 study of the likelihood of self-reporting weather impacts reveals material divergences across racial groups, suggesting differing attitudes about climate issues. According to the study, while “an overwhelming majority (86 percent) of the US public reported being at least slightly impacted by an extreme weather event,” there are statistically significant differences in which groups report the most significant impact.

While these groups self-report exposure to these weather events, we cannot independently verify their claims. Still, these findings are consistent with our past research on how different racial/ethnic groups view environmental and climate issues. Non-White and higher-income consumers tend to be most supportive of a greater focus on climate-friendly energy consumption and production.

Racial/ethnic minority groups most likely to report impact from extreme weather events

Source: Chad Zanocco, June Flora, and Hilary Boudet, Disparities in Self-Reported Extreme Weather Impacts by Race, Ethnicity, and Income in the United States, PLOS Climate, June 16, 2022.

High Cost and Low Battery Life Are Consumer Barriers to Buying an Electric Vehicle (EV)

In 2022, only 6 percent of vehicles sold in the US were electric, according to registration data from Experian. As with many other issues, what people say they would like to do and what they can afford to do differ. Sales are growing, however. In 2021, EVs represented 3.2 percent of the market.

Across incomes, only consumers earning $75,000 or more indicate they would be willing to pay more for an EV than a gasoline-powered car. Even among this cohort, less than 30 percent of any racial/ethnic group indicate they would do so. Black/African American consumers in this higher-income group are most likely (38 percent) to say they would pay more for an EV. Across lower/middle-income groups, Asian consumers (58 percent) are more likely than other racial/ethnic groups to say they would purchase an EV if it was affordable.

When asked about the feasibility of EV adaptation, consumers are somewhat more concerned about cost than battery life. Affordability beats charge duration when it comes to willingness to buy an EV across all income and racial/ethnic groups. This sentiment is consistent with pricing data that indicate that many EVs, especially the luxury brands, are more expensive than gas-powered cars. The average price of an EV in the US in 2021 was $52,000, significantly higher than the average price of a fossil-fuel-powered car ($36,000). After incentives, more affordable EVs might come close to $25,000, which helped bolster EV sales in 2022 by 70 percent over 2021, even if that figure represents growth from a low base. The recently passed Inflation Reduction Act of 2022 expands the tax credit for new purchases of EVs with final assembly in the US up to $7,500 for 10 years, which may help more consumers pay for an EV, but EVs are unlikely to hit significant market share until less expensive battery technologies come online (see Alex Heil and Will Baltrus, Charge it! Challenges for the Growth of Electric Vehicles in the US, December 2022).

For consumers earning at least $75,000, battery duration is more important than price; among this cohort, battery duration particularly matters to Latino/Hispanic consumers (53 percent).

Consumers are somewhat more concerned about EV affordability than battery life

Source: The Conference Board Survey of Multicultural Consumers, February 2023

Mainly High-Income and non-White Groups Express Willingness to Pay More to Heat and Cool Their Homes with Renewable Energy

As we know, comments do not always lead to commitments to act, but consumers most likely to say they would be willing to pay more for renewable energy to heat and cool their home are aged 35 to 54 (59 percent), earn more than $75,000 (62 percent), and are Asian (60 percent) or Latino/Hispanic (59 percent).

Higher-income consumers say they are more willing to pay more to heat and cool their homes with renewables

Source: The Conference Board Survey of Multicultural Consumers, February 2023

Most Consumers Prefer That Corporations and Governments Shoulder the Cost of Transition

Consumers stating that government should help defer costs are more likely to be under age 55 (60 percent), earn $75,000 or more (62 percent), and be Asian (62 percent) or Black/African American (62 percent). By race/ethnicity and income, Asian consumers earning less than $35,000 (68 percent) are the most likely of all respondents to say the government should help pay for the cost of transition.

In general, consumers are somewhat less likely to say that corporations should pay to assist with the cost of the switch to renewables than that the government should do so. Consumers who do believe corporations should help contribute to the cost of transition tend to be younger than age 55 (57 percent) by age cohort and Black/African American (60 percent) by race/ethnicity. By income there is little differentiation in answers (~55 percent across all three income groups).

Consumers favor energy transition if they do not have to pay too much for it

Source: The Conference Board Survey of Multicultural Consumers, February 2023

It is not surprising that consumers are concerned about the cost of transition. Indeed, it likely will be expensive for governments, corporations, and consumers, and thereby inflationary. Infrastructure will need to be built to accommodate EVs, and investments will need to be made to either erect new or retrofit existing buildings and equipment to use renewable energy. Moreover, there will be costs to mine, ship, and fabricate the materials necessary to create batteries and conduits for renewable energy—both in terms of actual dollars and effects on the environment and human labor forces until less harmful modes of storage and transmission are developed. Additionally, much investment in R&D is necessary to make difficult-to-harness forms of energy like hydrogen or biomass feasible and cost efficient. While the Inflation Reduction Act presents businesses and households with opportunities to take advantage of economic and tax incentives to decarbonize, success depends on how much consumers and businesses respond to these financial incentives (see Alex Heil, US Energy Transition: The Path Toward Net Zero, September 2022).