Energy renovations are a priority for post-crisis recovery plans, both in France, in the European Union and in the world.1 This urgency can be explained both by its rapidly mobilizable economic potential, its key role for climate policies, and by the importance of the fight against energy poverty in a context of increasing vulnerabilities. While proposals for France’s recovery plans abound,2 the challenge now is to identify the most effective levers for combining economic recovery with scaling-up of highly performant deep retrofits, which is a prerequisite for moving onto a convergent path with France’s national low-carbon strategy.

A key sector with a rising lag behind targets

Buildings alone account for 45% of the energy consumed in France (two thirds of which is residential and one third tertiary).3 This energy consumption accounts for 28% of greenhouse gas emissions in France;4 emissions that have hardly decreased since 1990 (-3%), making it the “laggard” sector of the first carbon budget (2015-2018) with a 12% overrun compared to the sectoral objective. This is mainly due to the slow progress in the energy retrofitting sector. Faced with the objective of bringing the entire housing stock up to the “low-energy building” (BBC) performance level by 2050 and of renovating 500,000 housing units per year, progress remains timid, insofar as it can be measured in the absence of reliable data on the number and quality of renovations.5

A significant potential in economic and employment terms

The Ademe’s “Marchés et Emplois” (Markets & Jobs) study indicates that the energy retrofitting sector represented more than 200,000 jobs and generated 29 billion euros of revenues in 2016. According to the hypotheses of the “Rénovons” (Let’s retrofit) scenario, an ambitious plan to eradicate the most energy-inefficient homes (energy class F and G housing) could create up to 93,000 additional jobs over ten years; an estimate that is in line with the evaluation carried out by I4CE in a recent analysis and which identifies ways to double investments in 5 years for high-performance retrofitting.

Such an approach entails two major risks. On the one hand, the increase in the volume of activity would fade quickly after the disappearance of the exceptional measures, creating a bubble of activity with no lasting impact over time. On the other hand, relying exclusively on existing tools entails the risk of retaining or even amplifying their weaknesses. In this case, the risk is that it will only encourage single and disparate energy retrofitting measures, which are disconnected and often incompatible with the logic of a comprehensive and deep energy retrofits. Furthermore, this would increase the risks of windfall effects in the event of targeted subsidies for specific equipment, thereby greatly reducing the overall economic efficiency.6

 

1. https://www.iea.org/news/iea-offers-world-governments-a-sustainable-recovery-plan-to-boost-economic-growth-create-millions-of-jobs-and-put-emissions-into-structural-decline
2. For further information, following is a (non-exhaustive) list of proposals for the recovery plan focused on the subject of energy renovation: Senate Sénat (http://www.senat.fr/fileadmin/Fichiers/Images/commission/affaires_eco/Covid-19/Feuille_de_route_relance_energie_04-06-2020.pdf); Négawatt (https://www.negawatt.org/IMG/pdf/200611_note_plan-de-relance_reno-performante.pdf); I4CE (https://www.i4ce.org/wp-core/wp-content/uploads/2020/04/I4CE-Investir-pour-le-climat-sortie-de-crise-COVID-1.pdf); CSCEE (https://www.actu-environnement.com/media/pdf/news-35644-cscee-relance-propositions-secteur.pdf); Convention citoyenne pour le Climat (https://propositions.conventioncitoyennepourleclimat.fr/) ; Association des régions de France (http://regions-france.org/wp-content/uploads/2020/04/20200406-DP-relance.pdf). Also of interest is the draft bill on the “Climate Premium” (Prime climat): (https://lessocialistes.fr/wp-content/uploads/2020/05/Groupe-Socialistes-et-apparente%CC%81s-Proposition-de-loi-Prime-pour-le-Climat-2020-1.pdf), by the deputy Boris Vallaud, which is particularly comprehensive on the link between a progressive energy retrofitting obligation and an overhaul of aid for renovation work.
3. Energy consumption in the residential-tertiary sector is stable overall (+4% since 2000). Emissions from buildings fell by only 3% between 1990 and 2007, as gains in efficiency and energy decarbonisation were generally “offset” by the increase in surface areas.
4. According to the new national low-carbon strategy adopted in 2020, the residential-tertiary sector accounts for 19% of national emissions in Scope 1 and 28% in Scope 2, including emissions linked to the production of energy consumed in buildings (in particular electricity and heating networks).
5. In its first annual report for 2019, the High Council for the Climate (HCC) noted as follows: “The absence of a performance requirement and monitoring system for most thermal retrofitting operations (even when they receive financial support) means that there is no quality of results or reliable data to properly assess the progress made in relation to the objectives set by the SNBC and the effectiveness of renovation aid”.
6. The risk of windfall profits is particularly high when subsidies are targeting specific equipments (wood stoves, heat pumps, windows) or retrofitting measures (attic insulation, roofing, etc.), rather than establishing an overall subsidy based on the level of performance achieved after completion of the work. For a more detailed analysis, see for example the evaluation of retrofitting subsidies published by the CGEDD and IGF in 2017 (https://cgedd.documentation.developpement-durable.gouv.fr/documents/Affaires-0009660/010867-01_rapport.pdf) or this article by Bozonnat et al. (2016) (https://hal-enpc.archives-ouvertes.fr/hal-01336704/document).

 

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This blog first appeared on the IDDRI site. 

Author: Andreas Rüdinger, IDDRI. 

Image courtesy of www.ccPixs.com via Flickr.

The views are those of the author and not necessarily those of ETTG.