Ross Stackhouse
Honors Thesis Proposal
Municipal Policies to Promote Energy Efficiency in Existing Buildings: Comparative Analysis and Lessons for Providence
Motivation:
In the effort against global warming, investments in energy efficiency constitute the most cost-effective means of mitigating greenhouse gas emissions worldwide. A widely circulated 2007 report by McKinsey & Co. demonstrated that energy efficiency investments represent an overwhelming majority of the greenhouse gas mitigation strategies that pay for themselves over time. (Creyts, J. et. al., 2007) A related study by the same firm concluded that energy efficiency investments in the U.S. alone could abate 1.1 gigatons of greenhouse gas emissions annually at a net profit to investors of almost $700 billion. (McKinsey, 2007) These studies and earlier works with similar findings have induced a wealth of scholarly and not-so-scholarly literature studying opportunities for public and private entities to capitalize on potential energy efficiency investments. (Bolinger, 2008; Paton, 2001; Golove, 1996; Gillingham, 2009)
Within the topic of energy efficiency investments, upgrades to existing buildings are an obvious focus. Buildings are responsible for 39% of energy consumption in the United States (USGBC) and despite projected construction over the next several decades, existing buildings will still account for a majority of building energy consumption by 2050 and beyond. Nonetheless, relatively little progress has been made in this field to date. Building owners are reluctant to pursue energy efficiency investments for a variety of reasons, including lack of awareness, lack of financing, and so-called “split-incentive” problems arising when renters are responsible for paying utility bills but owners are responsible for capital improvements. A number of public and private entities have taken it upon themselves to overcome these barriers with varied levels of success. Academics have sought to analyze the effectiveness of these efforts, but these studies have mainly focused on national and state-level endeavors. (Carpenter, 1984; Loughran, 2004)
The lack of emphasis on municipal policies and programs to promote energy efficiency in existing buildings is a glaring oversight in the energy-efficiency literature. Municipalities are in many ways the best-resourced entities to pursue such projects. Municipalities frequently control zoning ordinances, property-tax incentives, and in some cases building codes. It is therefore no surprise that many cities such as Los Angeles, Houston, and New York City have taken it upon themselves to enact policies and institute programs to help their residents and businesses increase the energy efficiency of their buildings. I seek to fill a significant gap in the energy efficiency literature by reviewing the effectiveness of some of these programs, and formulate recommendations on how Providence might institute such a program.
Overall Research Question:
How have U.S. cities tried to promote energy efficiency in their existing buildings and how can Providence learn from and improve upon the models implemented in other cities?
Approach
I will begin by selecting 2 to 4 case studies of cities that have enacted legislation and/or implemented programs to promote energy efficiency in their existing buildings. It will be important to select cities whose lessons can be easily applied to Providence, so I will do my best to choose cities that are similar to Providence in areas that are relevant to my analysis (e.g. per capita income, climate, cost of energy, political climate, etc.). I may also choose a city that is very dissimilar from Providence in these respects as a reference case. Additionally, I have decided to focus my analysis on existing residential structures in Providence, and programs that address residential buildings in my case studies. This decision comes as a result of my finding that commercial buildings in Providence are already well served by a National Grid partnership with RISE Engineering and the need for more support is much greater in the residential sector.
I will then perform in-depth qualitative and quantitative analyses on each of these case studies to discern what specific factors caused their efforts to succeed or fail. I will use peer-reviewed scholarly literature, data published by city agencies, and personal contact with the individuals overseeing these efforts to develop an accurate and in-depth set of case studies. It will be important to place the actions of the municipal governments in the context of the cities that they govern to best understand the complex web of influences that affect any public effort. I will then compare each of these case studies to one another as a means of drawing general conclusions on what strategies are likely to be successful in the context of a city like Providence and what strategies are likely to fail.
I will subsequently gather data on the city of Providence that I deem relevant to the success or failure of a building energy efficiency program. To obtain this information I will rely on members of the Providence building community, city agencies, and non-profit stakeholders like the Providence Plan. This data will be necessary to help me understand the context in which a building retrofit program could be implemented here. Based on my previous analysis and my understanding of the local context, I will conclude with recommendations to the Mayor and City Council on how they might promote energy efficiency in Providence’s existing building stock.
Anticipated Results
I expect I will generate recommendations on 1) How to finance these investments, 2) How to promote/market the program, 3) How to engage and properly train the building community in Providence, and 4) How to overcome particular obstacles like the split-incentive issue. I do not yet know enough to guess what I will specifically recommend in all of these areas, but I have a general sense of what to expect for some of them. In particular, I expect I will recommend a financing strategy that includes property-tax assessments, utility companies, mortgage lenders, or some combination therein. I also predict I will recommend that the city engage the Providence building community in the development of whatever legislation it might enact and/or programs it might implement as a means of gaining their support. I predict I will propose some simple, standardized training course on retrofitting practices to synthesize and streamline the disparate knowledge of retrofitting that the members of the Providence building community may have at present. Such a course may be instituted through Rhode Island College or another public learning institution in Providence.
Significance of the Proposed Research
As I previously mentioned, this thesis will fill an existing hole in the literature on energy efficiency. By looking at another (and potentially more successful) level of government that can incentivize building energy efficiency, I will further the public’s understanding of how to achieve cost-effective greenhouse gas emission and energy use reductions over the short-term.
On another level, my work may be helpful as Providence attempts to establish a building retrofit program. Last week, the Providence Department of Planning and Development won an Energy Efficiency and Conservation Block Grant (EECBG) from the Federal Government under the Stimulus Act in the amount of $1.75 million to establish the type of program I describe above. According to Providence professionals familiar with the matter, the final details of this program are not yet established and there is still time for public input. My thesis could serve as an important contribution to the decision-making process around how to distribute and/or make loans from the EECBG in a fashion that will promote meaningful residential weatherization in Providence for decades to come. Successfully establishing such a program will not only engender significant environmental benefits for the city and cost savings for building owners; it will also create much-needed reliable, low-skill jobs for Providence’s significantly under-utilized workforce. Building retrofits can serve as the foundation of a green-collar economy in Providence and jumpstart an economic revival in the city around smarter, greener industries for the 21st century.
Literature Cited