Renovating Europe’s buildings could boost GDP by €291 billion by 2017
Brussels, 11 October 2012: Investing in building renovation could accrue up to €175 billion per year for public finances with an additional “one-off” boost to GDP in the range of €153 to €291 billion for the years up to and including 2017. This is according to a new report1 prepared by Copenhagen Economics for the Renovate Europe Campaign.
The report which was launched at today’s Renovate Europe Day Conference2, shows that when the challenge of renovating the EU building stock is taken up with a high level of ambition, permanent increases in revenue for public finances will result. The report also provides a number of policy recommendations for European governments to help boost public finances through renovation. These include shifting or reducing incentives such as favourable tax treatment of heating and electricity use in buildings to encourage a lower usage, thus rendering energy efficient renovation of buildings more attractive. Modernising rent regulation to allow landlords and tenants to share the gains from energy efficient renovations is another example.
Commenting on the report, , Adrian Joyce, Campaign Director of the Renovate Europe Campaign said “We know that many Member States are still hesitant about whether or not to invest in energy efficient building renovation programmes, despite the requirements of the recently adopted Energy Efficiency Directive3. The findings in this new report will provide the final convincing arguments for those Member States, leading them to act. Investing in energy efficiency of buildings is a good investment in the short-term, the medium-term and the long-term.”
The second edition of Renovate Europe Day focuses on the theme of Stimulating Growth and Jobs in Europe.
In his address to the Conference, Günther Oettinger, EU Commissioner for Energy said “Energy efficiency is, for the European Union, the most direct and cost-effective way to achieve our strategic goals” and he goes on to elaborate on a number of key elements of EU Policy that go in this direction. He then turns to financing and informs the audience that: “…the European Union needs to focus and redirect its financial sources to address the energy efficiency financing challenge … That is why the Commission is keen to create the right conditions to bring more private sector financing into the energy efficiency market.”
The Renovate Europe Campaign is supported by 23 companies and associations.
1 Multiple Benefits of Investing in Energy Efficient Renovation of Buildings - A Study by Copenhagen economics:
2 See www.renovate-europe.eu/renovate-europe-day-2012 for full details
3 Article 4 of the Directive requires Member States to establish long-term strategies for mobilising investment in the renovation of the national stock of residential and commercial buildings, both public and private.
Notes to the Editor
1. Multiple Benefits of Investing in Energy Efficient Renovation of Buildings – Impact on public finances is a study by Copenhagen Economics, that was commissioned by the Renovate Europe Campaign (refer also to footnote 1 of the Press Release)
2. The Renovate Europe Campaign is an EU level Campaign whose headline objective is to reduce the energy demand of the existing EU building stock by 80% by 2050 as compared to 2005 consumption levels. In order to achieve this objective, it will be necessary to increase the renovation rate of buildings in the EU by a factor of 2.5 to reach 3% per year by 2020 and to maintain that rate until 2050.
The Renovate Europe Campaign which has 23 partner companies and associations, estimates that achieving its goals would boost activity in the EU construction sector by up to €830 billion per year by 2020 (at 2011 prices), securing up to two million direct and indirect jobs in the EU. In addition we would increase our energy security, reduce CO2 emissions, improve the quality of life for EU citizens and boost public finances.
To achieve the goals of the Campaign and thus reap the benefits it offers, Member States must put ambitious building renovation roadmaps to 2050 in place with intermediate targets for 2020, 2030 and 2040 that will be used to benchmark progress. In parallel, sources of funding that can be used to stimulate renovation in line with the 2050 Roadmaps must be put in place.
3. Copenhagen Economics is an independent research company that provides counselling services in the fields of competition, regulation, international trade, impact assessment and regional economics. They are particularly strong in the areas of energy and climate, telecommunication and post and regulated services. They are based in Copenhagen and you can learn more about them at: www.copenhageneconomics.com