The Economics of Energy Efficiency in Buildings
At the 2008 summit in Hokkaido, Japan, and again this summer in L'Aquila, Italy, G-8 leaders called for a 50 percent reduction in greenhouse gas (GHG) emissions by 2050 in order to avert the most serious dangers from global climate change. Improving the energy efficiency of buildings is essential: The International Energy Agency (IEA) has estimated that meeting the G-8's emission-reductions goal will require reducing annual GHG emissions from the building sector by 8.2 billion tons by 2050 below business as usual. While previous studies have shown that the cost of emissions abatement in the buildings sector is cheaper than in many other sectors, few studies have attempted to model what policies will be required to reduce building-sector emissions in line with the IEA's calculations. Trevor Houser, expanding on his earlier PIIE policy brief, uses the World Business Council for Sustainable Development's (WBCSD) model to study the economics of improving building-sector energy efficiency. Houser agrees with previous studies that the GHG abatement costs of improved building efficiency are cheaper than the abatement costs in other sectors (though more expensive than previous studies suggest), but he finds significant barriers to investments in energy efficiency. A carbon price alone--a key part of any successful climate policy--will not be enough to overcome these barriers, and complementary measures, such as improved financing approaches and enhanced standards and codes for building energy efficiency, will be needed to incentivize long-term building-sector investments and to meet the emission-reductions goals outlined by the IEA. Failure to enact such policies, and thus to take advantage of lower cost GHG abatement opportunities in the building sector, will force greater emission reductions in other sectors and will carry a much higher price tag.
|Date of creation:||Aug 2009|
|Date of revision:|
|Contact details of provider:|| Postal: 1750 Massachusetts Avenue, NW, Washington, DC 20036-1903|
Web page: http://www.piie.com
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Burtraw, Dallas & Sweeney, Richard & Walls, Margaret, 2009.
"The Incidence of U.S. Climate Policy: Alternative Uses of Revenues from a Cap-and-Trade Auction,"
National Tax Journal,
National Tax Association, vol. 62(3), pages 497-518, September.
- Burtraw, Dallas & Sweeney, Richard & Walls, Margaret, 2009. "The Incidence of U.S. Climate Policy: Alternative Uses of Revenues from a Cap-and-Trade Auction," Discussion Papers dp-09-17-rev, Resources For the Future.
- Burtraw, Dallas & Sweeney, Richard & Walls, Margaret, 2008. "The Incidence of U.S. Climate Policy: Where You Stand Depends on Where You Sit," Discussion Papers dp-08-28, Resources For the Future.
When requesting a correction, please mention this item's handle: RePEc:iie:pbrief:pb09-17. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peterson Institute webmaster)
If references are entirely missing, you can add them using this form.