Modelling energy efficiency in residential buildings with closed housing markets - a static CGE approach

Résumé du document

This paper aims at modelling an energy efficiency policy in order to evaluate its consequences on real estate and energy consumption. We use the closed general equilibrium model IMACLIM-S, that represents France's economy in 2004. After having introduce the households and firms maximization pro- gram, we define the rate of occupied buildings, that closes the supply and demand equilibrium. This rate is the key to understand the mechanism.

The money amount invested in energy efficiency is not allocated to construction and therefore the pressure on estate increases, as for the rate of occupied buildings. This higher rate is responsible for a higher rent, due to the de- crease of vacant buildings. There is no distinction between home-owners and renters in this model, only one aggregated household. This higher rent will be responsible for inflation.

We are in a perfect asymetric information situation, where households do not know they could extract a higher rent from the fact their building is green. They only know they will use less energy to have the same life stan- dard. It will be one of the several features that will be included within a next version of the paper. Here we observe the mechanism that says that "one euro invested in energy efficiency is one euro not invested in construction".

Nowadays the demand for green buildings, with high energy and environmental standards, is exploding. The anticipation for a strong increase of
energy prices is also responsible for a wilingness from both the governement and households to start renovation programs that aim at enhance buildings energy efficiency and consume less energy.

All these programs do have a cost, and the investment in this eld is not allocated to other sectors. We know that the whole households investment amount is devoted to construction. If this investment is reallocated to renovation, what will be the impact on buildings construction?

Extraits

[...] Eect on the housing energy consumption Parameters sensivity . Sensivity of the investment function . Sensivity of the mark-up parameter Ω Conclusion Introduction Nowadays the demand for green buildings, with high energy and environmental standards, is exploding. The anticipation for a strong increase of energy prices is also responsible for a wilingness from both the governement and households to start renovation programs that aim at enhance buildings energy eciency and consume less energy. All these programs do have a cost, and the investment in this eld is not allocated to other sectors. [...]

[...] Sh is an energy service, and do not directly reprensent the energy consumption. This service needs a certain energy amount to be reached. This is for instance the temperature required to live in the home. Shbn is linked with CEh , the housing energy products consumption, by the relation Sh = κCEh , where κ is the energy eciency. The function is: U Sh ) = Hbn )α Cbn ) C (Sh Shbn ) S )α where Hbn is the basic need for housing services, Shbn for energy products linked to housing and Cbn the basic need for composite good. [...]

[...] For instance, this program has been the source to study the eects of the introduction of a carbon tax in France The adaptation to this deformation results from several elasticities. There is no way to know how is the economy during the transition. The model is split into four sectors. Two are related to housing. They're represented and they're balanced in both money metric values and physical quantities (m2 The building and home construction is a sector, that also includes renovation and property development. The other one can be called "Housing Services". [...]

[...] We realized several simulations with dierent values for this input. The reference situation corresponds to an investment equal to 10Ge, with κ = 1. The other points belongs to a situation where 20 years before 2004, a certain amount of investment (IEE ) has been devoted each year to energy eciency. Results Eect on the energy eciency The graph shown below is the relation between the energy eciency coecient κ and the investment. We observe of course the rst part of the graph described in a previous paragraph, with the "learning-by-doing" eect Eect on estate prices The results are not surprising. [...]

[...] To broke this hypothesis needs the introduction of the owner's knowledge about their green estate price Integration of energy eciency We state in this model that there is only one type of building. There is no distinction between normal and high environmental eciency buildings. The resulting energy eciency coecient κ is an average of the environmental performance of each buildings. However this is still possible to come to a model with two types of building, by a process based on generations. The eects we want to model are represented on the diagram shown below. The starting point is the household investment. [...]