Abstract
The building sector consumes most energy in the world, especially public buildings, which normally have high energy-use intensity. This phenomenon indicates that the energy-efficiency retrofit (EER) for public buildings is essential for energy saving. Incentive policies have been emphasized by governments in recent years, but their effectiveness has not been sufficient. A major reason is agency problems in EER and that the government and building owners have asymmetric information. Furthermore, most policies apply identical standard to existing buildings of different types, resulting in resistance from owners and tenants. To mitigate this issue, this study proposes a principal–agent model to optimize incentive policy in EER. The proposed model defines two pairs of principal–agent relations (i.e., the government-owner and owner-tenant) and models their behaviors under different scenarios as per principal–agent theory. The results indicate the optimal incentive policies for different scenarios. In addition, critical factors of policy making, such as cost, risk, uncertainty, and benefit distribution are discussed. This study has implications for policy that will benefit policy makers, particularly in promoting EER by mitigating the agency problem found for the different scenarios.
Highlights
40% of energy is consumed by the building sector globally, which has led to remarkable air pollution and health risk [1]
If owners put in more effort on efficiency retrofit (EER), they will gain more environmental benefits from EER. θ indicates the uncertainty of the exogenous environment [19]. πen can be calculated by Equation (1): πen = keonao
This study focuses on incentive policy in the short term, so the energy price is stable
Summary
40% of energy is consumed by the building sector globally, which has led to remarkable air pollution and health risk [1]. More than 80% of life-cycle energy use is consumed after the building is occupied [3]. Governments all over the world have emphasized policies for EER in public buildings [9,10,11,12]. In China, pilot EER projects included 60 million m2 of public buildings according to the 12th Five-Year Plan (2011–2015) [13]. The target areas of EER were achieved, most pilot project were state-owned buildings; they included hospitals, schools and government offices [14]. A major reason is that the incentive policies of the government cannot effectively inspire building owners to take the initiative on EER [15,16]
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