Multiple benefits of renovation in buildings - PU Europe

Multiple benefits of investing in energy
efficient renovation of buildings
Figure A.7 Dynamics of a permanent increase in public spending
per cent of GDP
1.4
1.2
1
0.8
0.6
0.4
0.2
0
t t+1 t+2 t+3 t+4 t+5 t+6
Note:
The effect is showed for the euro area.
Source: OECD (2001)
By combining the assumed investment path of Figure A.6 we can derive the effect on GDP
from investing in order to meet the identified potential for energy efficient renovation of
buildings in Europe. We do this by assuming that an increase in the energy efficiency
renovations is equal to an increase in public spending. Since we have derived the investment
path as an increase in the permanent investment level, we can use the multipliers
related to a permanent increase in public spending.
We apply the average direct estimate on GDP from Table A.27 as the first year effect, and
the multipliers from Figure A.7 to calculate the effects on the following years. We find that
the accumulated increase in GDP from investing in energy efficient renovation of buildings
during the period of spare capacity to be 1.19 per cent, cf. Table A.28. This equals
€153 billion. 75 By the same method, we find that in the high EE scenario the accumulated
effect on GDP is 2.26 per cent, equalling €291 billion.
75 Based on 2012 GDP in current prices
73