Energy transition and equity: Quantifying pathways to building decarbonization based on notions of fairness

Zoe De Simone, Mariana Arcaya and Christoph Reinhart

Energy Policy, 2025, vol. 206, issue C

Abstract: Buildings are significant contributors to greenhouse gas emissions, accounting for nearly 40 % of the total. This makes decarbonizing the building sector crucial for reaching carbon-neutrality by 2050. While federal US tax incentives support a variety of upgrades, deep retrofitting all US single-family homes would cost approximately $240 billion, exceeding available public funds. The question therefore is how to best allocate limited public funds. The prevailing equality-based approach, which provides equal support to all homeowners, inherently favors higher-income groups, perpetuating inequality. Alternatively, focusing incentives on disadvantaged households risks depleting funds before economies of scale are fully realized. To develop incentive structures that balance long-term building-related carbon emissions and equity, we propose a model that combines a physics-based urban building energy model (UBEM) with US homeowners’ willingness-to-pay predictions and a spectrum of incentive policies. Using Oshkosh, WI, as a case study, we explore the philosophical, economic, political, and mathematical dimensions of creating just and effective decarbonization policies that ensure healthy, low-carbon homes for all. Our findings reveal that our evidence-based policy framework facilitates the achievement of concurrent carbon reduction and equity goals, allows to compare policies on the bases of long-term community impact, as well as avoid potential policy pitfalls of over and under incentivization.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:206:y:2025:i:c:s0301421525003052

DOI: 10.1016/j.enpol.2025.114798

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