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 Brian Chow May 20, 2012 10:48  | Proposal contributor
I have to open the first self-criticism on my own idea.
The zero-interest scheme is a little bit ideological. It is just that nothing from my common sense tells me that the negative reserve should be subject to any sort of increase, apart from macroeconomic inflation.
Furthermore, if the payback time takes decades, what happens should the tenant move out? This can't turn into a cap-and-trade sort of scheme. I am still trying to resolve these issues. Help is welcome.
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 Julia Lawrence May 31, 2012 11:12 |
Are you familiar with the UK's Green Deal? It launches in October 2012 so we don't know how it will turn out, but here are the key features:
1) very low rate of interest (special financing organisation to be set up just to do the Green Deal)
2) Free energy assessor visits to advise on green improvements that meet the "Golden Rule"
3) The Golden Rule = monthly payments must not exceed monthly savings
4) Paid back through the occupant's electricity bill
5) Stays with the house - so if you move, you stop paying, and the new occupant takes it up
6) Since rental tenants both receive the benefit and pay the electricity bill, landlords can arrange improvements without taking the risk that the tenant won't pay
There is a great deal more information about this online - search on "green deal decc" and you'll find plenty of detail. This may help provide some alternatives to the issues you've raised.
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Brian Chow May 31, 2012 09:53 | Proposal contributor
Thanks JL for the reference. I will certainly take a look at this and modify the idea. You are also free to edit my proposal however you wish, in order to improve its simplicity.
What I'm aiming for is a scheme which assumes the financial discipline exercised by the customer is held to the same standard as the rest of the market; that is, almost ignoring the fact they have the eco-building and paying normal recurrences.
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 James Greyson Jun 1, 2012 06:39 |
Hi Brian, there might be a practical reason for zero interest rates for energy efficiency investments - trust in the scheme. The UK Green Deal has been criticised for financing backed by companies such as Goldman Sachs so there is a risk of public perception that the gain from more efficient housing is being privatised rather than maximised. http://www.businessgreen.com/bg/opinion/2165435/green-deal-deal
Zero interest would ensure that financing would not be profit-driven, irrespective of who provides the cash. It could also deter governments from abandoning energy efficiency to markets, since the Green Deal replaces previous public grant funding. The planned Green Deal will target grant funds for solid wall insulation (usually older more valuable buildings), paid for by higher energy bills for all households - including low income people with uninsulated cavity walls. http://www.bbc.co.uk/news/science-environment-18074650
How about a form of quantitative easing that funds home efficiency rather than bank balance sheets?
There has been an active energy efficiency debate in the UK for at least 20 years but so far no effective proposals for improving rented homes. My landlord for example declined to have cavity insulation fitted even when I had arranged installation at no cost to him. This suggests an opportunity for legislation that obliges energy efficiency to a good standard, paid for if needed from rents.
Thanks Julia for bringing in the Green Deal - very important for this discussion!
James
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Brian Chow Jun 10, 2012 09:06 | Proposal contributor
Hi James,
Thanks a lot for the information. I will certainly do more research on this and update the proposal in the coming weeks.
-Brian
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 Erik Duhaime Nov 17, 2012 05:58  |
Hi Brian,
I agree this is an interesting approach and there is a lot going on in this area (thanks for pointing out the UK Green Deal, Julia!). Have you managed to find anything else in your research? I hope you will update the proposal soon!
-Erik
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 Sara Magalhaes Apr 4, 2013 07:22  |
Hi Brian,
Loved the idea and there are some programs applied to industry as well, as it is the case of the “Save to Compete” programme from EDP (Energias de Portugal). EDP and the Portuguese Industry Confederation signed a protocol aiming to promote the implementation of energy efficiency projects in the enterprises. The programme is based on a model in which each project is paid with the savings at long term.
Regarding James comment about the need for legislation that obliges energy efficiency to a good standard, just want to say that this can actually be very important and it is indeed showing some benefits already in EU with the enforcement of the EPBD 2002 (Directive 2002/91/EC), but essentially in the new buildings. The existing buildings remain still a problem although energy performance certificates (EPCs) must be made available to prospective buyers and tenants whenever a building is constructed, sold or rented. This will then lead to an increase in competition, hopefully promoting energy efficiency. The EPBD Recast (Directive 2010/31/EU) is now going to be enforced by EU countries. Apart from the minimum requirements set up by the EPBD, each country can then impose their own requirements. For example, in Portugal, it is mandatory for the new buildings to be provided with solar thermal installations for the domestic hot water.
Brian, I am enthusiastic to know more about your project and hope to hear more about it!
Regards
Sara
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Brian Chow Jun 15, 2013 09:55 | Proposal contributor
Hi sara,
Thank you so much for your support, and I am so sorry to have waited this long to respond. I guess this is what happens when you run out of time for everything at the same time :) I will look into your suggestion on EDP's S2C within the next several hours and see if I can make it before the clock ticks up.
Sincerely,
Brian
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 2013buildingefficiencyjudges 2013buildingefficiencyjudges Jul 8, 2013 09:25  |
Dear forespidy,
Thank you for your submission and congratulations on your selection as a finalist for the final judging round. We understand that your proposal is, as you say, a "complex systems problem," and appreciate your efforts in outlining the inherently uncertain impacts and costs of your idea. For the final round, our advice for you to improve your proposal is to flesh out the section on "who will take these actions" by further clarifying the incentives and actions of each actor. In addition, it would be great if you could build on the "Working Group Formation" phase of your timeline by highlighting more specific goals and actions that might be taken in the near term.
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2013buildingefficiencyjudges 2013buildingefficiencyjudges Jul 29, 2013 02:55 |
Comments from Judges are listed below:
- It's an interesting idea but needs to be fleshed out further. Getting something like this passed in the U.S. would be very challenging! I have to admit to not having the financial background to completely understand this proposal, but it seems a bit over complicated. Like the idea of 0% interest, but prefer the UK strategy of paying back the interest through the energy bill savings and premium rents. Have doubts that this idea could pass at a Federal level and instead see it as an initiative that could pass in CA or MA, and pass through state by state. Unfortunately, the way our utilities are regulated often prevents federal action.
-If this nut could be cracked, the results would be huge. However, the proposal is difficult to understand. I think it casually asserts huge first cost differences between green and not-green buldings that others would dispute. It's full of speculation about not-clearly-defined elements and actions in a complex multi-actor system. The costs are admitted to be unknowable, and it's not clear how CoLab recognition and support might be put to use. I'm not sure that this is quite ready for prime time, although, again, if we could get over the hurdle of first cost in green building, the climate benefits would be substantial.
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