A More Sustainable Future: Energy Efficiency Policies in Buildings

Energy efficiency is often times the most cost effective solution towards reducing energy demand. Energy usage in buildings accounts for upwards of 40% of the total energy consumption in the United States, as well as the vast majority of the growth in energy demand. Despite this buildings are often not built to be energy efficient, causing the residential and commercial sector to paying for hundreds of millions dollars on unnecessary energy use. The reason for this is the many market failures including: risk, lack of information, and access to capital. Looking at policies by the United States and China attempting to fix these market failures, it is found that most policies were at least cost effective in increasing energy efficiency. The most effective policy tended to be those intended to increase consumer information, possibly because of the supplementary effects in which previous information policies are retained in consumer minds and further information serves to create a more sophisticated knowledge base. It is also found that the major problem in almost all policies was full compliance, showing the need for additional enforcement.