THE IMPACT OF STATE LEVEL BUILDING CODES ON RESIDENTIAL ELECTRICITY CONSUMPTION

1. THE IMPACT OF STATE LEVEL BUILDING CODES ON RESIDENTIAL ELECTRICITY CONSUMPTION AninAroonruengsawat UC Berkeley, ARE Maximilian Auffhammer UC Berkeley, ARE/IAS Alan H. Sanstad LBNL

2. National Per Capita Consumption of Total Energy Has Been Flat since 1970

3. Residential Per Capita Consumption of Total Energy Flat since 1970

4. Growth of Residential Per Capita Consumption of Electricity has Slowed

5. …In States With and Without Significant Regulation

6. Policies are thought to matter

7. Technology-focused Efficiency and CO2 Potential Studies • “Bottom-up” engineering economics methodology • First appeared 1970s • Studies recently emerging at an accelerated rate, and gaining increasing attention • e.g., McKinsey study • Traditional point-of-contention is the claim of sizable zero or negative cost energy and/or carbon reduction

8. Are potential studies overly optimistic? • Varying degrees of enforcement on site. • Ex-Post Modifications by end-users • If these improvements are free or have a positive return, why don’t households build the “correct” house? • Building codes are technical or performance standards, which may not achieve savings at least cost.

9. Ex-Post Evaluation of Energy Efficiency Programs • Aggregate (national scale) studies are few, but do exist • Gillingham et al. (2006) estimated about 5% reduction in national primary consumption as of 2000 due to cumulative effects of all policies and programs, local, state, and federal • Geller (1995, ACEEE) • Jones, Norland and Prindle (1990, ASE) • Econometric Studies: • Jaffe and Stavins (1995, JEEM) • Everyone speaking today.

10. Research Question How effective were state-level building codes at reducing residential electricity consumption?

11. History of Residential Building Codes Fuel-oil, gas and electricity shortages in the winter 1972/73. Closing of schools, industry and government offices created demand for regulation. NCSBCS asked NBS to develop set of standards states could use. August 1975 ASHRAE (American Society of Heating, Refrigerating, and Air Conditioning Engineers) Code 90-1975 Revisions until 1995 known as the Model Energy Code (MEC) Current: International Energy Conservation Codes (IECC) California: Title 24 of 1978

12. California

13. Texas

14. MANDATORY STATE BUILDING CODES

15. Unconditional Event Graph: Per Capita Consumption Building Code Adoption

16. Residential New Construction und Building Code by State

17. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

18. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

19. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

20. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

21. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

22. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

23. Econometric Model Per capita residential electricity consumption, state i, year t Average residential electricity price, state i, year t Average natural gas price, state i, year t Per capita real personal income, state i, year t Heating & Cooling Degree Days, state i, year t Share of construction since 1970 permitted under building code ACEEE stringency and enforcement index

24. Estimation Results

25. Estimated Building Code Impacts

26. Total New Residential Construction since 1970 by State

27. Waxman Markey (ACESA, 2009) • Combines Cap and Trade Program (Title III) with aggressive energy efficiency efforts (Title II). • Title II, Subtitle A, Section 201 sets energy efficiency targets for residential and commercial buildings • After enactment, compliant buildings will meet a 30 percent reduction in energy use relative to a baseline code (ASHRAE Standard 90.1 -2004 for commercial and 2006 IECC for Residential) • By 2014 (residential) and 2015 (commercial), buildings will be required to meet a 50% reduction. • The reduction requirements are tightened by 5% at three year intervals thereafter until 2029 and 2030 respectively. • Option to raise state-specific standards to match or exceed new standards.