A roadmap for navigating voluntary and mandated programs for building energy efficiency

doi:10.1016/j.enpol.2012.01.026

Energy Policy

Volume 43, April 2012, Pages 415-426

https://doi.org/10.1016/j.enpol.2012.01.026 Get rights and content

Abstract

Commercial building owners and managers often face the challenge of selecting the appropriate combination of voluntary and mandated programs for commercial building energy efficiency. Using a mixed-method, both quantitative and qualitative approach, this study finds that barriers to energy efficiency can be interpreted as strategic drivers for the emergence of five forms of voluntary and mandated program forms. We argue that the links between energy efficiency programs in commercial buildings should be conceptualized in a comprehensive manner by evaluating the strategic drivers that have ultimately led to the emergence of the principal forms of voluntary programs: economic incentives; certifications; alliances and partnerships; and internal company programs. We develop a conceptual framework that helps building owners and managers: identify the primary drivers for energy efficiency efforts; assess the efficacy and limitations of available program forms; apply each program form strategically in conjunction with a number of other program forms; and, ultimately, predict the emergence of new program forms. In addition to United States Department of Energy survey data, this study draws upon data collected through semi-structured interviews with experts at major U.S.-based corporations, federally funded laboratories, government agencies, and non-governmental organizations.

Highlights

► Distills a complex system of energy efficiency programs into a single framework. ► Classify drivers, emerging forms, and shortcomings of each voluntary program form. ► Present survey and interview data from retail, real estate, and hospital experts. ► None of these programs alone meet organizational needs for energy efficiency. ► Entrepreneurs will play a key role by capitalizing on broken agency challenges.

Introduction

Energy efficient practices in commercial buildings offer considerable potential for businesses to save money. Despite technically available and economically viable opportunities for energy savings in buildings, numerous known barriers to the adoption of energy efficiency in the built environment persist (Blumstein et al., 1980, DeCanio, 1993, Jaffe and Stavins, 1994, Gillingham et al., 2006, Gillingham et al., 2009). In addition to building codes that are intended to promote building energy efficiency, a wide range of voluntary programs, such as economic incentives, certification schemes, alliances, partnerships, and internal company programs exist as tools to help overcome these barriers. Much of the prior research on barriers to energy efficiency is focused on developing theories as to why these barriers exist, how these barriers are manifested, and ultimately presenting policy recommendations for overcoming these barriers. We confirm the known barriers to the adoption of energy efficiency measures in commercial building development empirically employing a quantitative and qualitative approach. We analyze a survey conducted by the U.S. Department of Energy (DOE) of 150 diverse organizational types. In addition, we performed 27 semi-structured interviews with industry experts from various types of firms, non-profits, government agencies, and federally funded research facilities. These barriers are then translated into the strategic drivers leading to the emergence of the four principal voluntary program forms and a mandated program form for energy efficiency in commercial buildings.

The paper addresses the following research questions:

(1)
What forms of voluntary programs for energy efficiency in buildings exist?
(2)
What are the strategic drivers leading to the emergence of each voluntary program form?
(3)
How can voluntary and mandated program forms be employed comprehensively to address a broad set of barriers to commercial energy efficient development?

In addressing each of these research questions, this paper aims at developing a conceptual framework, presented through the lens of four illustrative cases, that classifies the main strategic drivers, the forms that have emerged in response, and the shortcomings to each program form if viewed independently. We assess the relationships among each program form and ultimately present a roadmap for managers and policymakers to navigate the complex system of voluntary and mandated programs for building energy efficiency. The framework and cases presented in this paper are supported by a survey of, and semi-structured interviews with, industry experts from major U.S.-based corporations, federally funded laboratories, government agencies, and non-governmental organizations.

In the next section we summarize the existing literature on barriers to the adoption of energy efficiency measures in commercial buildings. In the following sections we describe our methods and summarize the findings from analysis of a DOE survey. In the subsequent sections we explain our framework for the emergence of five forms of voluntary and mandated programs for energy efficiency. For each program form, we provide in-depth analysis of each program's emergence, an exemplary implementation form, and shortcomings. Finally, we present the managerial and policy implications of our framework and the findings within this study.

Section snippets

Prior research on barriers and challenges to energy efficiency in buildings

Stemming from the 1979 oil embargo, policymakers and researchers became interested in identifying, categorizing, and addressing barriers to the adoption of energy conservation and energy efficiency in buildings (Jaffe and Stavins, 1994, Lutzenhiser, 1993, Gillingham et al., 2006, Stern, 1986, Stern, 1992, Weber, 1997). Recognized organizational barriers to the adoption of energy efficiency practices include, but are not limited to asymmetry of information, missing information, uncertain

Methods

This study employs a mixed-methods quantitative and qualitative approach, relying upon two data sources. First, the study employs data provided by an independent United States Department of Energy (DOE) survey conducted in 2009. The DOE survey was distributed to an estimated 150 major U.S.-based companies participating in the DOE Commercial Building Energy Alliance program (United States Department of Energy, 2010). The survey asked building portfolio managers, energy experts, and facilities

Translating observed barriers to strategic drivers for program forms

Barriers are a theoretical construct and one can never ‘truly’ assess the reason an action on energy efficiency was not taken (Weber, 1997). This study develops a proxy for barriers by empirically classifying fundamental challenges firms report they have experienced in their attempts to become more energy efficient. The coded results from the 2009 DOE survey are presented in Fig. 1, Fig. 2. Fig. 1 demonstrates the broad categorical barriers to energy efficiency: Technology, Organization, and

Framework for the emergence of voluntary and mandated program forms

Our framework [Fig. 4] depicts a mandated form promoting energy efficiency—regulation—and the four forms of voluntary programs for building energy efficiency (economic incentives, certification programs, alliance and partnership programs, and internal company programs). Each program's strategic driver, example case described in this study, and program shortcomings are presented in Fig. 4.

The emergence of economic incentive programs such as tax incentives, direct subsidies, and loan programs is

Building energy efficiency regulation in the U.S.

National building codes were created in the late 1970s as a response to the energy and economic crises. Federal, state, and local building codes represent a set of legal requirements governing the design and construction of residential and commercial buildings.

Building regulatory structures possess four fundamental shortcomings. First, it is well established that energy pricing does not fully reflect the social and environmental costs of energy consumption (Brown, 2001, Owen, 2006, Ryghaug and

Economic incentive programs for energy efficiency

A representative example of an economic incentive program aimed at improving building energy efficiency is the Energy Efficient Commercial Buildings Tax Deduction (EECBTD). EECBTD provides a tax relief of $0.30–$1.80 per building square foot, depending on the technology and the amount of energy reduction. It was established in 2005 by the U.S. Energy Policy Act and is applicable through 2013. The deductions are available to building owners and tenants willing to assume construction expenditures.

Certification programs for energy efficiency

Examples of voluntary certification programs in the field of building energy efficiency are the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED), the joint Environmental Protection Agency (EPA) and Department of Energy's (DOE) Energy Star Program, and American Society of Heating, Refrigerating and Air Conditioning Engineers' (ASHRAE) Building Energy Quotient Program. While the Energy Star for Buildings Program is explicitly targeted at “improving the energy

Alliance and partnership programs for energy efficiency

Alliances at the regional, national, and international scale have arisen in the last three decades such as: The Alliance to Save Energy, the United States Department of Energy Commercial Building Energy Alliance (CBEA) program, and the Northwest Energy Efficiency Alliance. Direct partnership programs such as DOE Commercial Building Partnership Program have emerged at the project-team level to address the knowledge gaps specifically inherent to project-based industries. The alliance and

Internal company program for energy efficiency

As a representative case of an internal company program for energy efficiency, in late 2007 the environmental science and technology team at a major global media company (Major Media) put forward a proposal to key decision makers within the company for an energy reduction program. This program was selected for inclusion in this paper because the first author was personally involved in the project, worked for the company at the time, and was able to observe firsthand the decision process

Managerial, policy and research recommendations

The framework presented (Fig. 4) distills a complex system of energy efficiency options into a single framework encompassing the relationships between various forms of voluntary programs and regulation. Our framework focuses on identifying the five fundamental forms of energy efficiency programs: regulation, economic incentives, certification programs, alliance and partnerships, and internal company programs. In examining each of these forms, we have assessed the strategic drivers for their

References (46)

M.A. Brown
Market failures and barriers as a basis for clean energy policies*1
Energy Policy
(2001)
S.J. DeCanio
Barriers within firms to energy-efficient investments
Energy Policy.
(1993)
A.B. Jaffe et al.
The energy paradox and the diffusion of conservation technology
Resource and Energy Economics
(1994)
W.L. Lee et al.
Regulatory and voluntary approaches for enhancing building energy efficiency
Progress and Combustion Science
(2004)
A.D. Owen
Renewable energy: externality costs as market barriers
Energy Policy.
(2006)
P. Rohdin et al.
Barriers to and drivers for energy efficiency in the Swedish foundry industry
Energy Policy.
(2007)
M. Ryghaug et al.
How energy efficiency fails in the building industry
Energy Policy.
(2009)
P.G. Sassone et al.
Industrial energy conservation: The reasons behind the decisions
Energy
(1984)
L. Weber
Some reflections on barriers to the efficiency use of energy
Energy Policy
(1997)
H.E. Aldrich et al.
Organizations Evolving
(2006)

S. Arora et al.

Why do firms volunteer to exceed environmental regulations? Understanding participation in EPA's 33/50 program

Land Economics

(1996)

C. Blumstein et al.

Overcoming social and institutional barriers to energy conservation

Energy

(1980)

J.C. Borck et al.

Voluntary environmental programs: Assessing their effectiveness

Annual Review of Environment and Resources

(2009)

K. Charmaz

Constructing grounded theory: a practical guide through qualitative analysis

(2006)

C. Coglianese et al.

Beyond compliance: business decision making and the U.S. EPA's performance track program. Regulatory Policy Program

(2006)

R. Cyert et al.

The Behavioral Theory of the Firm

(1963)

Derringer, J., Iyer, M., Huang, Y.J. 2010. Transferred just on paper? Why doesn't the reality of transferring/adapting...

P.J. DiMaggio et al.

The New Institutionalism in Organizational Analysis

(1991)

F. Dobbin et al.

The strength of a weak state: the rights revolution and the rise of human resources management divisions

American Journal of Sociology

(1998)

L.B. Edelman et al.

The endogeneity of legal regulation: grievance procedures as rational myth

American Journal of Sociology.

(1999)

Eichholtz, P., Kok, N., Quigley, J.M. 2009. Doing well by doing good? Green office buildings. Center for the Study of...

Energy Policy Act of 2005, H.R. 6, 109th Congress...

Energy Star. 2010. Energy star for buildings and plants. 〈http://www.energystar.gov/index.cfm?c=business.bus_index〉,...

Cited by (35)

A novel BIM-based process workflow for building retrofit
2022, Journal of Building Engineering
The European Union (EU) has developed policies aimed at accelerating the retrofit of existing buildings, with the vision of a decarbonised building stock by 2050. Retrofitting of existing buildings offers significant opportunities to reduce global energy consumption and greenhouse gas emissions. Although there is a wide range of government incentives available, retrofits only affect 0.5–1% of the building stock per year. Thus, this research conducted a literature review in order to identify the barriers preventing retrofitting of existing buildings. These barriers include low financial availability, user awareness, uncertainty in regulatory frameworks and fragmentation of the supply chain. The research presented here overcomes these retrofit barriers by developing a novel step-by-step guideline for building retrofit. The proposed workflow combines the benefits of Building Information Modelling (BIM) with the Business Process Modelling (BPM) technique. BIM is used for its capacity to create and manage information along the full life-cycle of a building. While BPM allows to optimise the retrofit workflow, by providing all relevant stakeholders with (i) the instruments to better understand their roles and responsibilities in the retrofit process, (ii) the technological framework and data needed to efficiently implement BIM within the project. This novel BIM- BPM workflow was demonstrated on a residential pilot building located in Inis Mór, Ireland.
Non-technological and behavioral options for decarbonizing buildings – A review of global topics, trends, gaps, and potentials
2022, Sustainable Production and Consumption
Worldwide, energy use in buildings with the same function differed by a factor of 3–10, owing to behavioral issues. Future lifestyle changes in developed countries are expected to result in significant energy use reductions of up to 50% by 2050, with a correspondingly large impact on greenhouse gas (GHG) emissions. However, neither clear categorizations of behavioral or nontechnological (NT) climate mitigation solutions (CMS), nor corresponding estimates of global potentials for energy savings and GHG mitigation are available. Using a systematic map methodology, review of frameworks, and topic modeling, we propose a taxonomy that conceptually covers various demands (maintained/reduced), perspectives (individual/collective), and direct energy use (yes/no), resulting in five types of NT solutions: active and passive management and operation (MO), demand flexibility, sufficient comfort levels, circular and sharing economy, and organizational and social innovations. A knowledge glut for active and passive MO has been identified, with clusters in Europe and North America. Furthermore, evidence gaps were discovered in terms of geographical scope (with very little literature available about Africa and the Middle East, Latin America and the Caribbean, and Eastern Europe and West-Central Asia), stakeholder perspectives, and some measures (circular and sharing economy, flexibility of demand over time, social and organizational innovations). There was insufficient evidence on current NT CMS adoption and implementation costs.
Quantified potentials were mostly found for developed countries and residential buildings, with more energy savings than GHG mitigation studies. Whereas these potentials are substantial, they vary largely among regions and solutions. The potential energy-saving ranges between 5% and 40% for most regions and CMS. The greatest potential GHG emissions reductions are seen in the circular and sharing category (25% to 70%). For other actions, most potentials range from 5% to 30%. More research is needed to provide evidence on rebound effects that can offset the climate benefits of NT solutions, business models that demonstrate their financial viability, and policy actions that trigger the already identified climate mitigation potentials of NT solutions.
Barriers to the adoption of energy-efficient technologies in the building sector: A survey of Brazil
2021, Energy and Buildings
The building sector is responsible for 51% of the electricity consumed in Brazil, and about 10% of the total greenhouse gas emissions. These numbers continue to grow, despite significant efforts made by the government to promote the adoption of building energy efficiency (BEE) technologies, which have not been widely adopted due to barriers. A systematic literature review revealed 27 barriers, classified into six categories, as being responsible for hindering the adoption of energy-efficient technologies. This article aims to verify whether such barriers make sense in the Brazilian context. In order to accomplish this goal, a survey among one thousand Brazilian professionals was carried out. The results are analysed by two multivariate techniques, cluster and factor analysis, validating these barriers as well as the proposed taxonomy for Brazil. The results also show that the two most important categories of barriers are Governmental/Political/Regulatory and Financial/Economic, showing that Brazilian society has high expectations that the government will be more active in this matter. In addition, the survey respondents gave insights into important points concerning technology, education, etc. that should be verified in a timely manner. These findings can assist government agencies, researchers, and experts to develop guidelines/strategies to overcome such barriers.
A comprehensive review of obstacles and drivers to building energy-saving technologies and their association with research themes, types of buildings, and geographic regions
2021, Renewable and Sustainable Energy Reviews
Citation Excerpt :
In addition, there is a lack of pilot projects demonstrates innovative and energy-efficient actions to investors and owners [68]. One can conclude that the latter two obstacles are underlying causes for the existence of the former [12,45,68]. Table 6 shows the strategies to overcome the Technological barriers.
The building sector has played an important role in energy consumption over the last few decades, demanding actions to decrease it. A way to reach this goal, without affecting the occupants’ welfare, is the adoption of building energy-efficient (BEE) technologies. There are several of these technologies available, bringing lots of benefits. However, there are barriers that hinder their adoption. Before overcoming such barriers, it is necessary to know them. Thus, after examining 450 publications, from 2000 to 2018, only eight presented some kind of taxonomy to the barriers, ranging from three to five categories, showing that some barriers were perhaps not considered. The dependence relationship of the barriers and the types of buildings and geographical regions as well as their evolution has not yet been evaluated. The recommendations to overcome such barriers are spread throughout the literature and have not yet been compiled. This review gathered 105 barriers that were grouped into six categories (Financial, Market, Technological, Professional, Political and Behavioural), followed by their respective timelines, as well as the dependence relationship of them and the types of buildings and geographical regions. A compilation of the strategies to overcome such barriers is also presented. These results, besides supporting the formulation of policies for the adoption of BEE technologies, clarify the structure of each group of barriers and allow researchers to identify the most relevant ones for their scenario followed by the starting point to overcome them, focusing their attention on neuralgic points.
Building green retrofit in China: Policies, barriers and recommendations
2020, Energy Policy
Green retrofit is an effective way of improving the performance of existing buildings to achieve low energy consumption and low carbon emission. To realize a successful building green retrofit, it is important to understand the barriers and to develop relevant policies for retrofitting existing buildings, especially in developing countries. As a typical developing country, China has a large number of aged buildings with high green retrofit potential. In terms of its government structure, economic development, and building stocks, China is unique in that it poses a unique set of barriers and policy strategies on the promotion of building green retrofit. Based on a critical review, existing retrofit policies in China were reviewed. Then, the barriers to building green retrofit within the context of China were identified. Based on the study of existing policies and barriers, relevant policies for addressing these barriers are recommended. The findings provide a valuable reference for policy makers in China to review current building green retrofit policies or to develop new policies that address the barriers. This study also provides a useful reference for other countries aiming to review their building green retrofit policies.
The “START” framework to evaluate national progress in green buildings and its application in cases of Singapore and China
2019, Environmental Impact Assessment Review
Current studies provide little knowledge for a holistic assessment of green building (GB) studies and practices. This study addresses the gap by developing a systematic and multidisciplinary framework called “START” that integrates five interactive dimensions of GB, including S-stakeholders, To-total building life cycle concerns, A-actions of government, R-relevant contexts, and Ta-targets to facilitate scholars and policymakers' analysis of GB development and progress. A comparative review of Singapore's and China's GB journey has been conducted to illustrate the application of the framework. Results indicate that both countries face common challenges of achieving economic sustainability of GB due to market failure and lack of non-technical support. However, Singapore has made better progress in environmental and social sustainability than China. Singapore's GB program inclusively covers the whole building life phases whereas China mainly emphasizes on planning/design phase. Collectively, effective governance, strict law enforcement, engaged stakeholders, matured economy and emerging technologies facilitate the GB implementing in Singapore. Additional efforts are required for China to cope with its complexity and heterogeneity regarding climate zones, hierarchy of authority, and disparity of economy and resources allocation in various regions. The framework helps facilitate policymakers to comprehensively assess GB progress and highlights the importance of incorporating non-technical drivers, such as social, psychological, political factors, into multi-disciplinary research of GB programs.

View all citing articles on Scopus

View full text

A roadmap for navigating voluntary and mandated programs for building energy efficiency

Abstract

Highlights

Introduction

Section snippets

Prior research on barriers and challenges to energy efficiency in buildings

Methods

Translating observed barriers to strategic drivers for program forms

Framework for the emergence of voluntary and mandated program forms

Building energy efficiency regulation in the U.S.

Economic incentive programs for energy efficiency

Certification programs for energy efficiency

Alliance and partnership programs for energy efficiency

Internal company program for energy efficiency

Managerial, policy and research recommendations

Energy Policy

Energy Policy.

Resource and Energy Economics

Progress and Combustion Science

Energy Policy.

Energy Policy.

Energy Policy.

Energy

Energy Policy

Organizations Evolving

Why do firms volunteer to exceed environmental regulations? Understanding participation in EPA's 33/50 program

Land Economics

Overcoming social and institutional barriers to energy conservation

Energy

Voluntary environmental programs: Assessing their effectiveness

Annual Review of Environment and Resources

Constructing grounded theory: a practical guide through qualitative analysis

Beyond compliance: business decision making and the U.S. EPA's performance track program. Regulatory Policy Program

The Behavioral Theory of the Firm

The New Institutionalism in Organizational Analysis

The strength of a weak state: the rights revolution and the rise of human resources management divisions

American Journal of Sociology

The endogeneity of legal regulation: grievance procedures as rational myth

American Journal of Sociology.