The Feasibility of Reducing Greenhouse Gas Emissions in Residential Buildings

Abstract

The American Clean Energy and Security Act of 2009, the so-called Waxman-Markey cap and trade bill, proposed that all residential buildings be renovated to meet existing energy codes upon sale to minimize emissions. In this paper, we examine existing and suggested International Energy Conservation Codes (IECC) and how they compare to the proposed climate objectives. We follow this by calculating the costs to bring existing homes to current energy codes and review the effort needed to bring homes up to future codes based on an in-depth study of over 100 homes in the Denver Metropolitan Area. We find that requiring homes be upgraded to meet existing energy codes is not efficient on a cost versus energy savings/emissions effort for the individual owner unless the government allows large tax credits or imposes a significant carbon tax on carbon emissions. Measures that do make sense include requiring new homes be energy-efficient, energy-efficient light bulbs and appliances when replaced, and increased attic insulation. To minimize the impact of global warming, the concept of updating homes to current and future energy codes is a valid one. However, no one has undertaken the task of examining in detail what it would cost to modify and improve the existing housing stock to bring it into compliance with the 2020 and 2050 emissions goals (i.e., 20% below 2005 levels by 2020 and a total reduction in emissions of 83% below 2005 levels by 2050) and the related energy codes to avoid the worst impacts of global warming. While contemplating the potential impact of global warming and the contribution from buildings, no one has examined the potential impact this could have on household valuation. In addition, the effect on the marketplace in terms of potential defaults, as it may be the case that focusing solely on improving the existing building stock to meet emissions goals could potentially undermine the value of homes and the related impact on net wealth. This paper ties the concerns and reactions to climate change and energy consumption to policy implications. Specifically, how potential policy reactions affect the cost of compliance. We then examine if these costs will have an effect on the marketability of housing. We first review the concern of climate change and policy reaction, followed by a review of energy codes and historical energy consumption. We then review