Counting good: quantifying the co-benefits of improved efficiency in buildings

Diana Ürge-Vorsatz and Aleksandra Novikova, Center for Climate Change and Sustainable Energy Policy, Central European University, Hungary
Maria Sharmina, Department of Economics, Central European University, Hungary

Keywords

buildings, co-benefits, non-energy benefits, NEBs, cost benefit, energy efficiency, greenhouse gas mitigation, energy policy, climate policy

Abstract

Many recent major studies, including the IPCC’s Fourth Assessment Report, have attested that energy efficiency is humanity’s prime option to combat climate change in the short- to mid-term. The potential to avoid CO2 emissions cost-effectively has been reported to be significant through efficiency policies. However, the review of global research findings on the quantification of cost-effectiveness of opportunities through improved efficiency has highlighted that there is a major shortcoming in the vast majority of such calculations. It is common that such studies normally consider only direct costs in their assessment. Whereas there have been several trans-national efforts to quantify external cost, external “benefits”, or co-, ancillary- or non-energy benefits are rarely monetized and included in cost-benefit analyses. Since several studies have attested that these benefits often amount to more than the direct energy benefits, the omission of these values severely distorts the results of such assessments and, therefore, it is of utmost importance to consider these for in global and national policy-making and target-setting. The aim of the present paper is to assist in laying the foundations for this process, and demonstrates this on the case of the building sector. The paper reviews and synthesises the granules of research in this field. It first provides a taxonomy of co-benefits, and then collates case studies found in the public domain in which certain co-benefits have been monetized/quantified. Then, the paper summarises the various methodologies applied for the quantification of these. Finally, it offers equations on how different co-benefits could be integrated into a more holistic cost-benefit and/or cost-effectiveness assessment.