Multiple benefits of renovation in buildings - PU Europe

Multiple benefits of investing in energy
efficient renovation of buildings
Figure A.8 Benefit from increased economic activity
€ billion
350
300
291
250
200
150
153
128
100
67
50
0
Low EE scenario
Impact on GDP
High EE scenario
Impact on public finances
Source: Copenhagen Economics based on the stated sources in the above calculation steps.
As investments continue to take place after 2017, there will continue to be an increasing
pressure on economic activity. However, as this will take place at a time where the economy
is expected to be on or above its structural level, we do not consider this is a benefit
to the total economy. Instead, such economic activity will most likely crowd out already
existing economic activity, and will increase wage and inflationary pressure.
A.11 Aggregating the benefits
The benefits of investing in energy efficient renovation of buildings constitute of several
different elements as listed in the above description. While some of the benefits are direct
and tangible, such as cost savings from reduced energy consumptions, other benefits are
less direct and tangible such as e.g. the value in terms of health of reduced air pollution.
In this section we nonetheless aggregate the different benefits with a view to which of the
benefits can be attributed to improving public finances. When interpreting the overall
benefits, one should therefore be aware of the different levels of uncertainty and timing of
the benefits.
As mentioned in the report, several studies find that there is a relatively small, but significant
rebound effect of conducting energy efficient renovation of buildings. These renovations
essentially make it cheaper to consume energy, which will increase energy consumption.
Based on a survey of the economic literature on rebound effects we apply a rebound
effect of 10-30 per cent. This corresponds to 6-19 Mtoe less reduced energy consumption
in the low EE scenario in 2020 than would have taken place without a rebound effect, cf.
Figure A.9.
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