A growing body of research attaches figures to the value of benefits that energy efficiency measures deliver to public agencies, private entities, economies as a whole and to individual citizens. Renovating private homes has a benefit-cost ratio of 4:1, reflecting reductions in healthcare expenditure, elimination of energy subsidy pay-outs, job creation and greater economic empowerment of citizens who are lifted out of energy poverty.
At present, buildings account for 40% of EU energy demand and 36% of carbon dioxide emissions. Each year, the EU imports 55% of its energy needs at a cost of approximately €300 billion. Most troubling is the reality that in 2050, nine out of ten existing buildings will still be in use.
Renovate Europe is pleased to see that buildings are included in early discussions of the European Green Deal. Yet to date, policy action in this area has failed to stimulate the level of deep energy renovation needed. During Executive Vice-President Timmermans’ first 100 days in office we plan to loudly advocate for renovation of the building stock as a tool not only to reduce emissions, but to capture a range of untapped benefits in terms of health, productivity and the economy.
BENEFITS OF BETTER AIR QUALITY
Across the EU, people spend approximately 90% of their time indoors. Temperature, lighting, humidity, draughts and noise play important roles in physical and mental well-being. More efficient buildings improve thermal comfort for lower volumes of energy consumption, reducing emissions and leading to better air quality indoors and outdoors.
In 2013, long-term exposure to air pollution was responsible for about 436,000 premature deaths across the EU. Direct costs associated with air pollution, including lost working days and higher health costs — especially for the elderly and children — amounts to €23 billion annually.
ERADICATING ENERGY POVERTY FOR HEALTH AND PUBLIC BUDGET BENEFITS
People with low incomes live in poorer quality dwellings which require high energy consumption to achieve thermal comfort — whether that means staying warm in winter or maintaining a healthy indoor temperature in summer. Often, the associated costs drive them into energy poverty. Recent estimates put the number of EU citizens affected at 41 million in winter and 98 million in summer. Renovating such homes would obviously reduce demand and lower energy bills, lifting people out of energy poverty.
Public budgets could also realise substantial benefits through reduced healthcare costs. Multiple studies show that young children living in cold, damp homes are more than twice as likely to have problems with breathing, chest conditions and bronchitis, and are 40% more likely to suffer from asthma. Adults in energy poverty suffer higher levels of stress associated with poor quality living conditions, rental instability, social deprivation and inability to pay energy bills. Among the elderly, inadequate housing is linked to a 40% increase in deaths in winter in Europe.
Research from the UK shows that of all household risks that carry costs for the National Health Service, being cold at home is four times more costly than the next-highest risk of falls on stairs. Across the EU, approximately 250,000 excess/early deaths are recorded each winter (compared with summer mortality rates). About one-third of these, 80,000 deaths, are associated with poor-quality housing and inability to keep adequately warm.
ENERGY EFFICIENCY BOOSTS PRODUCTIVITY AND PERFORMANCE
A recent study by the Buildings Performance Institute of Europe (BPIE, 2019) found that deep energy renovations deliver specific benefits across different building types:
IN HOSPITALS: Directly related to the health costs associated with energy poverty in homes is the question of energy efficiency in hospitals, where a healthy interior can make the difference between life and death. Good ventilation reduces the risk of cross-infection, while daylighting, thermal comfort and good soundproofing accelerate patient recovery times.
Startlingly, the BPIE study found that improved indoor environmental quality at a children’s hospital would lower mortality rates by 10%. More broadly, energy renovations could cut the average length of patient stays by 11% while also shaving medication costs and employee turnover by 20%.
PUBLIC AND PRIVATE WORKSPACES: Around 36% of the EU workforce, 81 million people, spend eight hours a day or more working in offices, where about 90% of operating costs are linked to employees. Renovating for comfortable, healthy, well-lit and thoughtfully designed workspaces improves staff morale and reduces turnover. It can also boost employee productivity by up to 12%.
All things considered, healthier workplaces could save a staggering €500 billion annually in the EU.
IN SCHOOLS: Student health, attendance, concentration and learning performance all suffer when school buildings are poorly designed or have outdated systems.
Modelling carried out by the BPIE estimates that school renovations could allow children to improve academic performance by 3%-8% — equivalent to ten fewer school days a year.
Across all building types, scaling up renovation to the level needed to achieve an 80% reduction in energy waste has the potential to create 2 million local jobs. In many cases, this will require building skills capacity in low-income areas, with the added benefit of boosting local economies. One study found that every €1 million invested in energy efficiency in the residential sector resulted in the creation of 17 job years. In turn, net gains are seen in local economies through higher employment and higher disposable income — with lower energy bills, families can afford a comfortable indoor temperature while also covering the costs of other basic needs.
THE EUROPEANS GREEN DEAL NEEDS TO UNLOCK THESE BENEFITS
In 2014, the International Energy Agency (IEA) published a book which set out clear benefits for public budgets, for health and well-being of citizens, in industry and for energy delivery.
At the global scale, the IEA estimated that uptake of economically viable energy efficiency measures would result in savings that far outweigh the cost of investment.
Under policies in place in 2014, the IEA estimated that two-thirds of the economically viable energy efficiency investments would be missed — with buildings showing the greatest lost potential, at 82%.
We call on authors of the European Green Deal to unlock the substantial benefits of energy efficiency across all sectors in a strategic way. To truly put people at the centre of policy, prioritising deep energy renovation is the most direct way to improve the health and well-being of EU citizens, while also advancing towards energy demand and emissions reduction goals.
Follow our hashtag #GreenDeal4Buildings on Twitter and LinkedIn to keep up to date with the Renovate Europe 100 days campaign
The views expressed in this opinion are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy
Do you have a thoughtful response to the opinion expressed here? Do you have an opinion regarding an aspect of the global energy transition you would like to share with other FORESIGHT readers? If so, please send a short pitch of 200 words and a sentence explaining why you are the right person to deliver this opinion to email@example.com.
New York City has been testing a pilot version of a tool developed to estimate emissions from its buildings, potential refits, costs and benefits
Online platforms can deliver transparency around PPAs, bring down transaction costs and enable new entrants in the market
A recent World Bank study reveals global carbon revenues are rising sharply, but only around 42% are used for environmental projects. It shows European and American citizens prefer their governments to spend carbon revenues on low-carbon initiatives, so why is political will lagging behind asks Susanne Dyrbøl from Rockwool Group
The Green Bank Network has committed almost $15 billion of predominantly public capital to mobilise a total of $50 billion towards the low-carbon transition
Energy Cities, a European association of local authorities, estimates a city will need between €1 billion and €3 billion to reach net zero emissions by 2050