Comment

24 September 2009

U.S. should mirror Europe, Aussie energy efficiency plans

If the U.S. wants to become more energy efficient, it has to listen, watch, and learn.

At the same time, it can create more “green” jobs by adopting strategies employed by the European Union and Australia to rate and disclose the performance of commercial and government-owned buildings, according to a new RAND Corporation study.

The study finds wealthier countries use more than one-third of their energy to heat, cool, and illuminate buildings, but not always efficiently. Recent steps taken by the European Union and Australia to inspect, rate, and publicly disclose the energy efficiency of buildings indicate the buildings use less energy and are worth more when sold or leased.

The buildings sector has unique characteristics that make design of energy efficiency policies particularly challenging—transactions are infrequent, capital costs are high, and the variability of design and siting makes energy efficiency comparisons difficulty. Often, owners must bear the costs of efficiency improvements while tenants benefit from the costs savings. 

“Nevertheless, investments in renovation and energy-aware construction should be part of a green jobs strategy,” said Charles Ries, the report’s lead author and senior fellow at RAND, a nonprofit research organization. “If the United States wants to be a global competitor in green building technology, it can learn from the ways in which information disclosure, building codes, financial incentives, and benchmarking have been used in Europe and Australia.”

In examining the recent efforts in the EU and Australia to promote energy efficiency, researchers focused on five key policy tools: Building codes, energy efficiency ratings, the role of public buildings, the training and certification of experts, and the issuance of tradable “white certificates.”

Building codes have been effective in improving energy efficiency in new buildings and in buildings undergoing major refurbishments because they are mandatory and have specific requirements. However, codes are slow to have a significant effect on energy use because at most 3% of a nation’s building stock is newly constructed or renovated, the study found. The EU now requires all member nations to have energy efficiency elements in building codes, and EU codes must undergo review every five years.

Since a building’s good energy performance can be attractive to potential buyer or tenant, the EU has made presenting a standardized rating of a building’s energy efficiency before or at the time of sale or lease an integral part of its approach. In 2002, the EU began requiring energy performance certificates be presented for all building sales or rentals. Some Australian states also require energy efficiency certificates. The ratings could come from a building’s design characteristics, energy performance, or both. Many highly rated building designs fail to perform up to potential, however, often because of management issues or tenant behavior.

Among the report’s key considerations for U.S. policymakers:

• Building-materials manufacturers will be able to better standardize their products if there is regional consistency in the energy efficiency requirements for building codes. This will provide relatively quick benefits. For the long term, performance codes should also go into consideration, with expanded use of building codes accompanied by aggressive training and quality-assurance programs for inspectors.
• Energy Performance Certificates should be understandable and meaningful enough to affect marketplace behavior.
• Widespread energy efficiency gains are possible only through retrofitting and making operational improvements to existing buildings. Energy use monitoring, as well as incentives, inspection, and improvement recommendation systems are essential.
• Public buildings should continue to be a test bed for new energy-saving ideas and should promote awareness of building energy-performance levels.
• Building energy-efficiency programs can play an important part of a cap-and-trade program for reducing emissions of carbon dioxide. A ratings system, along with a cadre of trained and licensed experts to conduct the ratings, is crucial to any roll-out of a broad-based “white certificate” program.

For related information, go to www.isa.org/productivity.