Abstract
Based on data for a portfolio of 548 multi-unit buildings observed over 16 years, we quantify the impacts of more than 400 energy efficiency interventions among 239 treated buildings. We exploit variation in the timing of investments to provide evidence that treated and control buildings follow the same trend in the absence of energy efficiency investments, and use staggered difference-in-differences regressions to document building-level energy savings, CO2 abatement, and heating expenditure reductions. Our results show that a ranking of interventions based on realized energy savings yields substantially different priorities as compared to a ranking of implicit carbon prices, with estimates of frequently subsidized measures (such as wall insulation and windows replacement) well in excess of available benefit estimates for avoided emissions.
Highlights
Market-based approaches to regulate externalities associated with CO2 emissions generate a carbon price that signals which investments are worth pursuing
That energy savings for smart thermostats tend to increase with pre-treatment energy use, so that the implicit price of carbon estimated for treated buildings is likely a lower bound for the corresponding population of non-renovated buildings
While we do observe the timing of installation for these interventions and can estimate energy savings, a lack of financial data implies that we cannot estimate the implicit price of carbon associated with these interventions
Summary
Market-based approaches to regulate externalities associated with CO2 emissions generate a carbon price that signals which investments are worth pursuing. 240 buildings benefited from energy efficiency investments, and our data allow us to derive forensic evidence for the implicit carbon price across the following interventions: insulation of exterior walls, roof or attic, replacement of windows, installation of smart thermostats that optimize heating operations using real-time information (e.g., weather forecasts), replacement of the boiler, including fuel switching from heating oil to natural gas.. Widely subsidized investments such as exterior wall insulation and the replacement of windows are associated with energy savings of 18 and five percent, respectively For these two interventions, point estimates for the implicit price of carbon are around CHF 1,000 per tonne of CO2. Our data afford a rare investigation of energy efficiency investment behavior outside of specific policy programs (Metcalf and Hassett, 1999, is another exception) Despite these differences, our estimate of energy savings across interventions (around 12 percent on average) closely aligns with the above studies.
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