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Energy Efficiency Efforts in U.S. Buildings Should Focus on Improvements in Regulation and Financing
New Briefing Paper by the Economist Intelligence Unit and the Global Buildings Performance Network Identifies Key Strategies for Scaling Up Efficiency
In the United States, buildings account for 41 percent of primary energy consumption, more than the transport or industrial sectors. Tackling rising energy consumption in U.S. buildings will require a more coordinated and coherent approach to energy efficiency codes and regulation, one that is more focused on retrofits—where most potential gains lie. It’s also crucial to develop new financing mechanisms that help institutional investors assess the risks associated with energy-efficient projects.
These are the key findings from an Economist Intelligence Unit paper, Achieving scale in the US: A view from the construction and real estate sectors, commissioned by the Global Buildings Performance Network (GBPN) in collaboration with its U.S. hub, the Institute for Market Transformation (IMT) and in partnership with the World Business Council for Sustainable Development (WBCSD).
Other findings include:
Energy efficiency regulation in the U.S. is patchy, confusing, and inconsistent. Building codes and other policies are too focused on new builds and often differ between states—and sometimes within them. As a result, the majority of U.S. companies manage energy efficiency at the building level rather than at the portfolio level.
Innovative financing offers opportunities to achieve greater scale. Aggregating projects across and within sectors through green banks and large mortgage financing organizations allows for a more efficient allocation of capital and would likely attract large institutional investors.
Both the public and the private sectors must work to address the data challenge. Data on energy efficiency performance is limited, unshared, and often inconsistent between measurements. Institutional investors require standardized data on the energy and financial performance of projects.
Co-benefits of energy efficiency retrofits include higher occupancy rates and higher tenant retention. While many of these co-benefits like reduced carbon emissions have yet to be priced into the market, some—for example, greater comfort—are almost immediately tangible for both companies and their customers.
"The challenges to scaling up energy efficiency in the U.S. are different from many other countries," said Jayson Antonoff, U.S. Director of the GBPN. "Most building codes and regulations here are adopted and enforced at the local level, creating a fragmented and inconsistent policy landscape."
Antonoff continued: "Though there is a great potential for energy savings in retrofits, this research by the EIU—and the GBPN's own discussions with high-level leaders in the public and private sectors—also points to the need for more standardized and accessible data to make the case for energy efficiency, and the importance of the often overlooked side benefits or 'co-benefits' of efficiency, such as improved comfort and productivity."
Achieving scale in the US is available free of charge on the websites of the GBPN and IMT. It can also be downloaded at: http://www.managementthinking.eiu.com/archive/industries/energy-natural-resources.html.
The GBPN has also released a short video to accompany the briefing paper, "Investing in Energy Efficiency in Buildings" (view on YouTube).
ABOUT THE ECONOMIST INTELLIGENCE UNIT
The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com ( http://www.eiu.com/ ) or follow us on www.twitter.com/theeiu
ABOUT THE GLOBAL BUILDINGS PERFORMANCE NETWORK
The Global Buildings Performance Network (GBPN) is a globally organized and regionally focused nonprofit network advancing building energy performance best practice policies to help decision-makers develop and implement policy packages that can deliver a Deep Path of energy consumption reductions and associated CO2 emissions mitigation from buildings. It operates a Global Center in Paris and is officially represented by Hubs in China, Europe, India and the United States. www.gbpn.org
ABOUT THE INSTITUTE FOR MARKET TRANSFORMATION
The Institute for Market Transformation (IMT) is a Washington, DC-based nonprofit organization dedicated to promoting energy efficiency, green building, and environmental protection in the United States and abroad. Much of IMT’s work addresses market failures that inhibit investment in energy efficiency. www.imt.org