Efficiency policy overhaul touted by IEA

International Energy Association suggests innovative new fiscal policies needed to overcome financial barriers restricting investment in improving buildings' energy efficiency

Cost-effective energy efficient technologies remain under-utilised by home owners due to a number of financial barriers, according to a study by the International Energy Association (IEA), published today.

The report, Promoting Energy Efficiency Investment: Case Studies in the Residential Sector, said that existing buildings account for over 40 per cent of the world's primary energy consumption as well as nearly a quarter of global CO2 emissions, making them a key battleground in the fight to reduce emissions.

IEA director Nobuo Tanaka said that high energy prices and soaring CO2 emissions, meant the "imperative [on the building industry] to improve energy efficiency is stronger than ever".

However, the report found that despite the existence of many technologies with the potential to slash domestic energy use and carbon emissions, their adoption faces a number of major barriers, including the low priority ascribed to energy saving by consumers, difficulty in accessing capital to make improvements, and split incentives between landlords who have to invest in efficiency measures and tenants who will benefit from them.

The IEA claims that to overcome these barriers a series of new policy measures and incentive schemes need to be adopted to help overcome the high initial costs of energy efficient equipment.

UK Green Building Council spokesman John Alker agreed there should be more fiscal incentives for homeowners to refit their homes, arguing that "Council Tax or Stamp duty rebates, together with more innovative products from mortgage lenders", could have a major impact on adoption rates.

In addition to incentives for homeowners, the report claimed that greater private sector involvement in the sector will be required and government will need to act to incentivise more firms to address the opportunity presented by the need to retrofit many homes with energy saving technologies.

Richard Bradley, head of the energy efficiency and environment division at the IEA, said that new standardised measurement and verification protocols are required for assessing the effectiveness of energy efficiency investments. He explained that the development of such protocols would make the evaluation of green home investments much easier for the banks and mortgage providers that will be called upon to provide much of the funding.