Building efficiency is crucial to a fair energy transition


When we think of the complex transition to clean energy, we often think in terms of broad “how” questions. One question rightfully gaining increasing attention across the EU is how to address energy poverty as part of the clean energy transition. In Germany, even conservative estimates assume that one in ten households cannot afford to keep adequately warm. To make matters worse, evidence shows that almost all people affected by energy poverty live in rented accommodation.

But here’s where the rubber meets the road: the tenant pays the energy bill, whereas only the landlord can decide to implement energy efficiency measures. Most tenants will struggle to achieve any change in this situation.

Dynamic minimum energy efficiency standards for apartment buildings, which can trigger energy-efficient refurbishments, are a promising option. Such standards, which lay down minimum requirements for energy efficiency, are an important instrument for combating energy poverty, alleviating negative health impacts, and achieving climate targets in the building sector.

A good trigger point for enforcing those standards can be the renewal of existing or new tenancy agreements. Minimum energy efficiency standards should be regularly adjusted and announced well in advance so that landlords can plan to make necessary upgrades. Associated financing mechanisms can prevent a rent increase and ensure renovations are carried out in a socially acceptable manner.

In this discussion, it is critical to understand that energy poverty is not the same as poverty. The causes of energy poverty go beyond mere income poverty. In Germany, over 70 percent of all households affected by energy poverty live in apartment buildings, many of which were erected in the post-war years between 1949 and 1979, and have comparatively low efficiency classes. Energy poverty has structural causes that can and should be addressed independently of income poverty.

We know energy poverty can result in serious health problems caused by inadequate heating, low indoor temperatures, damp, and mould. The connection between energy poverty and poor health is internationally well documented. The International Energy Agency, the World Health Organization and the Cochrane Library, a health research database, regularly report how inefficient living spaces can trigger a whole range of diseases, including increased winter mortality, respiratory diseases, increased susceptibility to heart attacks, strokes and thrombosis.

If we go back to the broader energy transition picture, we also know it will be difficult, if not impossible, to reach the climate goals set out in the Paris Agreement without upgrading inefficient rental properties.

Health, comfort, and climate protection are three benefits that can be achieved through minimum energy performance standards. Experiences in the U.K., Canada, the Netherlands, Flanders, Belgium, and Boulder, Colorado, in the United States, where standards are now operational or planned, show how minimum standards for the most inefficient buildings can be used to push forward refurbishment.

The existence of these regulations underlines how many traditional energy efficiency policies, which rely solely on providing grants, do not reach many tenants who need this support the most. It is also critically important, in addition to grants and standards, to establish an accompanying finance mechanism to avoid an increase in living costs for tenants. This would allow them to stay in the renovated building and benefit from improved health and increased comfort.

Finally, people need to be aware of the multiple benefits stemming from deep renovation. Broad stakeholder participation in designing the instrument is therefore crucial to its success.

A version of this article originally appeared in FORESIGHT Climate & Energy.