IDEAS home Printed from https://ideas.repec.org/p/pad/wpaper/0304.html
   My bibliography  Save this paper

CO2 emissions reduction from residential buildings: cost estimate and policy design

Author

Listed:
  • Riccardo Camboni

    (University of Padova)

  • Alberto Corsini

    (Spanish National Research Council and OIPE)

  • Raffaele Miniaci

    (University of Brescia)

  • Paola Valbonesi

    (University of Padova)

Abstract

We assess the efficiency of a bonus financed by the government to support energy renovation of dwellings and the related CO2 emissions reduction. The bonus considered is a fixed percentage of the cost of the energy improvement. Efficiency of this policy is assessed by comparing the cost of the bonus with the cost of individually tailored subsidies that a fully informed government would have paid to achieve the same CO2 reduction. Relying on the Energy Performance Certificates (EPCs) dataset, which includes information on characteristics of the buildings, recommendations to improve their energy efficiency and related CO2 reduction, we derive the costs and benefits of three bonuses levels (25%, 50%, and 75%) of the upfront cost to implement EPCs recommendation. Matching our data with the socio-economic characteristics of the household most likely to live in the observed dwellings shows that without any bonus, only 15% of the recommended efficiency enhancing investments have a positive private net present value (NPV) and their upfront cost averages about 22% of annual household spending; a bonus of 50% of the upfront costs brings the percentage of recommended investments with positive NPV to 30% and reduces the incidence on the annual household budget to 11%.

Suggested Citation

  • Riccardo Camboni & Alberto Corsini & Raffaele Miniaci & Paola Valbonesi, 2023. "CO2 emissions reduction from residential buildings: cost estimate and policy design," "Marco Fanno" Working Papers 0304, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0304
    as

    Download full text from publisher

    File URL: https://economia.unipd.it/sites/economia.unipd.it/files/20230304.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Camboni, Riccardo & Corsini, Alberto & Miniaci, Raffaele & Valbonesi, Paola, 2021. "Mapping fuel poverty risk at the municipal level. A small-scale analysis of Italian Energy Performance Certificate, census and survey data," Energy Policy, Elsevier, vol. 155(C).
    2. Jenkins, David & Simpson, Sophie & Peacock, Andrew, 2017. "Investigating the consistency and quality of EPC ratings and assessments," Energy, Elsevier, vol. 138(C), pages 480-489.
    3. Fuerst, Franz & McAllister, Pat & Nanda, Anupam & Wyatt, Pete, 2016. "Energy performance ratings and house prices in Wales: An empirical study," Energy Policy, Elsevier, vol. 92(C), pages 20-33.
    4. Pat McAllister & Franz Fuerst & Buki Ekeowa, 2011. "The Impact of Energy Performance Certificates on the Rental and Capital Values of Commercial Property," ERES eres2011_89, European Real Estate Society (ERES).
    5. Fuerst, Franz & McAllister, Patrick, 2011. "The impact of Energy Performance Certificates on the rental and capital values of commercial property assets," Energy Policy, Elsevier, vol. 39(10), pages 6608-6614, October.
    6. Delmastro, Chiara & Mutani, Guglielmina & Corgnati, Stefano Paolo, 2016. "A supporting method for selecting cost-optimal energy retrofit policies for residential buildings at the urban scale," Energy Policy, Elsevier, vol. 99(C), pages 42-56.
    7. repec:arz:wpaper:eres2011-89 is not listed on IDEAS
    8. Geller, Howard & Harrington, Philip & Rosenfeld, Arthur H. & Tanishima, Satoshi & Unander, Fridtjof, 2006. "Polices for increasing energy efficiency: Thirty years of experience in OECD countries," Energy Policy, Elsevier, vol. 34(5), pages 556-573, March.
    9. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
    10. Ali, Usman & Shamsi, Mohammad Haris & Bohacek, Mark & Hoare, Cathal & Purcell, Karl & Mangina, Eleni & O’Donnell, James, 2020. "A data-driven approach to optimize urban scale energy retrofit decisions for residential buildings," Applied Energy, Elsevier, vol. 267(C).
    11. Ástmarsson, Björn & Jensen, Per Anker & Maslesa, Esmir, 2013. "Sustainable renovation of residential buildings and the landlord/tenant dilemma," Energy Policy, Elsevier, vol. 63(C), pages 355-362.
    12. Dall’O’, Giuliano & Sarto, Luca & Sanna, Nicola & Tonetti, Valeria & Ventura, Martina, 2015. "On the use of an energy certification database to create indicators for energy planning purposes: Application in northern Italy," Energy Policy, Elsevier, vol. 85(C), pages 207-217.
    13. Curtis, John & Pentecost, Anne, 2015. "Household fuel expenditure and residential building energy efficiency ratings in Ireland," Energy Policy, Elsevier, vol. 76(C), pages 57-65.
    14. Pontus Cerin & Lars G. Hassel & Natalia Semenova, 2014. "Energy Performance and Housing Prices," Sustainable Development, John Wiley & Sons, Ltd., vol. 22(6), pages 404-419, November.
    15. Hårsman, Björn & Daghbashyan, Zara & Chaudhary, Parth, 2016. "On the Quality and Impact of Residential Energy Performance Certificates," Working Paper Series in Economics and Institutions of Innovation 429, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pasichnyi, Oleksii & Wallin, Jörgen & Levihn, Fabian & Shahrokni, Hossein & Kordas, Olga, 2019. "Energy performance certificates — New opportunities for data-enabled urban energy policy instruments?," Energy Policy, Elsevier, vol. 127(C), pages 486-499.
    2. Camboni, Riccardo & Corsini, Alberto & Miniaci, Raffaele & Valbonesi, Paola, 2021. "Mapping fuel poverty risk at the municipal level. A small-scale analysis of Italian Energy Performance Certificate, census and survey data," Energy Policy, Elsevier, vol. 155(C).
    3. Khazal, Aras & Sønstebø, Ole Jakob, 2020. "Valuation of energy performance certificates in the rental market – Professionals vs. nonprofessionals," Energy Policy, Elsevier, vol. 147(C).
    4. Copiello, Sergio, 2017. "Building energy efficiency: A research branch made of paradoxes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1064-1076.
    5. Aleksandar S. Anđelković & Miroslav Kljajić & Dušan Macura & Vladimir Munćan & Igor Mujan & Mladen Tomić & Željko Vlaović & Borivoj Stepanov, 2021. "Building Energy Performance Certificate—A Relevant Indicator of Actual Energy Consumption and Savings?," Energies, MDPI, vol. 14(12), pages 1-19, June.
    6. Federico Dell’Anna & Marina Bravi & Carlos Marmolejo-Duarte & Marta Carla Bottero & Ai Chen, 2019. "EPC Green Premium in Two Different European Climate Zones: A Comparative Study between Barcelona and Turin," Sustainability, MDPI, vol. 11(20), pages 1-21, October.
    7. Marmolejo-Duarte, Carlos & Chen, Ai, 2022. "Uncovering the price effect of energy performance certificate ratings when controlling for residential quality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    8. Benedetto Manganelli & Pierluigi Morano & Francesco Tajani & Francesca Salvo, 2019. "Affordability Assessment of Energy-Efficient Building Construction in Italy," Sustainability, MDPI, vol. 11(1), pages 1-17, January.
    9. Sieger, Lisa & Weber, Christoph, 2023. "Inefficient markets for energy efficiency? – The efficiency premium puzzle in the German rental housing market," Energy Policy, Elsevier, vol. 183(C).
    10. Anil Markandya & Xavier Labandeira & Ana Ramos, 2013. "Policy Instruments to Foster Energy Efficiency," Working Papers 01-2014, Economics for Energy.
    11. Liang Wong, Ing & Krüger, Eduardo, 2017. "Comparing energy efficiency labelling systems in the EU and Brazil: Implications, challenges, barriers and opportunities," Energy Policy, Elsevier, vol. 109(C), pages 310-323.
    12. Wahlström, Marie H., 2016. "Doing good but not that well? A dilemma for energy conserving homeowners," Energy Economics, Elsevier, vol. 60(C), pages 197-205.
    13. Mats Wilhelmsson, 2019. "Energy Performance Certificates and Its Capitalization in Housing Values in Sweden," Sustainability, MDPI, vol. 11(21), pages 1-16, November.
    14. Taruttis, Lisa & Weber, Christoph, 2022. "Estimating the impact of energy efficiency on housing prices in Germany: Does regional disparity matter?," Energy Economics, Elsevier, vol. 105(C).
    15. Fuerst, Franz & Warren-Myers, Georgia, 2018. "Does voluntary disclosure create a green lemon problem? Energy-efficiency ratings and house prices," Energy Economics, Elsevier, vol. 74(C), pages 1-12.
    16. Ana Ramos & Alicia Pérez-Alonso & Susana Silva, 2015. "Valuing Energy Performance Certificates in the Portuguese Residential," Working Papers 02-2015, Economics for Energy.
    17. Hardy, A. & Glew, D., 2019. "An analysis of errors in the Energy Performance certificate database," Energy Policy, Elsevier, vol. 129(C), pages 1168-1178.
    18. Rocco Curto & Elena Fregonara, 2019. "Monitoring and Analysis of the Real Estate Market in a Social Perspective: Results from the Turin’s (Italy) Experience," Sustainability, MDPI, vol. 11(11), pages 1-22, June.
    19. Hyland, Marie & Lyons, Ronan C. & Lyons, Seán, 2013. "The value of domestic building energy efficiency — evidence from Ireland," Energy Economics, Elsevier, vol. 40(C), pages 943-952.
    20. Fleckinger, Pierre & Glachant, Matthieu & Tamokoué Kamga, Paul-Hervé, 2019. "Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis," Energy Economics, Elsevier, vol. 84(S1).

    More about this item

    Keywords

    CO2 emissions; policy design;

    JEL classification:

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pad:wpaper:0304. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Raffaele Dei Campielisi (email available below). General contact details of provider: https://edirc.repec.org/data/dspadit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.