Energy performance certificates and investments in building energy efficiency: a theoretical analysis

Pierre Fleckinger (), Matthieu Glachant and Paul-Hervé Tamokoué Kamga
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Paul-Hervé Tamokoué Kamga: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: In the European Union, Energy Performance Certificates (EPCs) provide potential buyers or tenants with information on a property's energy performance. By mitigating informational asymmetries on real estate markets, the conventional wisdom is that they will reduce energy use, increase energy-efficiency investments, and improve social welfare. We develop a dynamic model that partly contradicts these predictions. Although EPCs always improve social welfare, their impact on energy use and investments is ambiguous. This implies that, in a second-best world where energy externalities are under-priced and/or homeowners have behavioral biases hindering investments (myopia), EPCs can damage social welfare. This calls for using mandatory energy labeling in contexts where additional instruments efficiently mitigate the other imperfections.

Date: 2018
Note: View the original document on HAL open archive server: https://hal.science/hal-01952969v1
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Related works:
Journal Article: Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis (2019)
Working Paper: Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis (2019)
Working Paper: Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis (2019)
Working Paper: Energy performance certificates and investments in building energy efficiency: a theoretical analysis (2018)
Working Paper: Energy performance certificates and investments in building energy efficiency: a theoretical analysis (2018)
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