Economics and the selection and development of energy standards for buildings

Abstract Energy-conservation standards for new buildings will play a major role in federal and state conservation policies in the coming decade. This article discusses economic-efficiency considerations that can be incorporated into the selection and development of such standards. Three types of energy budgets — ‘fixed energy budgets’, ‘partially variable energy budgets’, and ‘economically efficient energy budgets’ (EEEB) — are examined for use as standards. Economic-efficiency criteria are presented for use in selecting an appropriate energy budget. An illustrative example shows the potential dollar losses in life-cycle terms from failing to apply an EEEB. Research and operational requirements for developing and implementing an energy budget are described. Three energy-budget standards are evaluated in terms of economic efficiency, administrative feasibility, equity, and consistency in design requirements. An EEEB appears optimal in that it ranks highest overall with respect to the four criteria. Failure to begin research for, and development of, EEEBs now would impose unnecessary social costs in the form of extra expenses to achieve any chosen target levels of energy conservation in buildings.