Energy efficiency in the Nordic building sector

Potentials and instruments

image of Energy efficiency in the Nordic building sector

There is an economic potential for increased energy efficiency in Nordic buildings. How much is however difficult to assess, partly because of insufficient energy statistics for buildings. Several barriers hinder the use of more efficient solutions when building and using buildings, e.g. lack of information, energy issues having low priority, and different incentives for builders, owners and users. Climate concerns and the need to secure energy supply are important drivers for energy efficiency policies. Promoting energy efficiency in order to reduce greenhouse gas emissions might however induce large rebound effects causing total emissions to be reduced very little or not at all. This might be the case if reduced energy use in buildings is replaced with more emission intensive activities, like travel. To avoid this it is important to include all greenhouse gasses in tax or quota systems, and to restrain financial support to energy efficient investment in order not to make them too cheap.



Policies for increased energy efficiency – theoretical foundation

From an economic point of view efficient energy use implies that the users are making the right choices between use and non-use (less use) of a particular piece of energy-consuming equipment and between use of that equipment and investment in a more energy-efficient version. For this to happen the energy users must face energy prices that reflect all long-run marginal costs of supply, as well as all environmental and social externalities If that is not the case, i.e., that the energy users to not face (or perceive to face) the “societal optimal” price there is a rationale for policy intervention in order to correct the actual, or perceived, price. The societal optimal price is partly driven by political targets for the energy sector and the environment.


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