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Considering Health Benefits in Irish Energy Efficiency Policy Formulation
Jim Scheer [email protected]
April, 2013
Recognition of health benefits of EE
History of analysis and key publications
Recent fuel poverty analysis
Key questions ... Next steps?
Recognition of health benefits of EE
History of analysis and key publications
Recent fuel poverty analysis
Key questions ... Next steps?
Recognition of health benefits of EE in current policy
Affordable Energy Strategy (82 pages)
– >25 separate references to health
– 8 references to comfort
– 6 references to wellbeing
– 4 references to energy savings
Healthy Ireland: Framework for Improved
Health and Wellbeing’ (60 pages)
– References the above strategy once
– No further mention of energy efficiency
– Towards ‘health in all policies’
– Need fuel poor metric (for example)
Policy players…
Well convinced …
Less well
convinced
?
Recognition of health benefits of EE
History of analysis and key publications
Recent fuel poverty analysis
Key questions ... Next steps?
Background studies and evaluations
• A number of ‘foundation’ papers built case for broad scale
energy efficiency upgrades - CBA (ex-ante)
• Included health benefits - Excess winter mortality and
morbidity
• First significant policy publication in 1999, ‘Homes for the
21st Century’
– Published by Energy Action Ltd - Based on a number
of papers by Clinch & Healy*
(*see reference section last slide)
General modelling approach
• Model of dwelling
stock
• Energy savings
potential by
measure
• 10 year programme
/ 30 years benefits
Energy
assessment
model
Cost Benefit
Analysis
• Savings vs.
comfort
• Ratio depends
on socio-
economic
grouping
Costs
• Dwelling
upgrades
Benefits
• Energy savings
• Emissions
abatement
• Comfort
• Reduced excess
winter mortality
and morbidity
The value of health … Step 1
• Cross country comparison* (control for interplay of
causative factors)
*Clinch and Healy (1999)
Norway Ireland
Similarities Demography
Diet standards
Alcohol consumption levels
Smoking rates
Exercise levels
Air pollution
Obesity rates
..and others
Key difference High insulation
standards
Poor insulation
standards
Result: around 50% (CVD) and 57% (RD) of excess winter
deaths in Ireland attributed to poor dwelling standards
Reduced excess
winter mortality*
• VoSL method (scaled)
• Total excess winter
deaths x attribution
factor
• €1,100 million
(discounted)
Reduced excess winter
morbidity*
• High humidity, mould,
poor health
• Annual excess cases x
annual excess cost/case x
attribution factor
• €58 million (societal
component)
• Does not include restricted
activity days
The value of health … Step 2
*Clinch and Healy (2001)
Need good
baseline
health data
Recognition of health benefits of EE
History of analysis and key publications
Recent fuel poverty analysis
Key questions ... Next steps?
Policy and expenditure
1. Subsidies
• €465 million p/a
• Over 600,000
households
2. Retrofit
• €20 million p/s
• 10,000 homes p/a
• Shallow retrofit
Policy questions
• How to curb escalating subsidy costs? – Without adversely impacting the worst effected
– Delivering a more permanent solution
• Why change? – Subsidy bill increasing …
– Benefits of subsidies are transient
– Benefits of retrofit are long lasting
– Potential to capture broader benefits including
health
– Moving towards energy poverty proofing the housing
stock …
Method – Reallocation of supports
• Average subsidy per home before reallocation approx. €690 p/a
5th decile 4th decile 3th decile 2th decile 10th decile
Income €41,500 €33,200 €24,900 €16,600 €8,300
BER
C1 21% 29% 44% 59% 75%
C2 24% 34% 52% 69% 88%
C3 28% 40% 59% 80% 101%
D1 33% 47% 70% 94% 120%
D2 39% 55% 82% 111% 141%
E1 44% 63% 95% 127% 162%
E2 50% 71% 107% 144% 183%
F 54% 77% 115% 155% 197%
G 54% 77% 115% 155% 197%
€135
€1,280
Results - Reallocation
• Expenditure method - % income spent on household energy
(primary uses), AFTER reallocation
5th decile 4th decile 3th decile 2th decile 10th decile
Income €41,500 €33,200 €24,900 €16,600 €8,300
BER
C1 2.3% 2.7% 3.3% 4.3% 7.4%
C2 2.7% 3.2% 3.8% 5.1% 8.7%
C3 3.1% 3.7% 4.4% 5.8% 9.9%
D1 3.7% 4.4% 5.2% 6.9% 11.8%
D2 4.4% 5.1% 6.1% 8.1% 13.8%
E1 5.0% 5.9% 7.1% 9.3% 15.9%
E2 5.7% 6.7% 8.0% 10.5% 18.0%
F 6.3% 7.4% 8.8% 11.7% 20.1%
G 6.9% 8.2% 9.9% 13.3% 23.4%
Better off
Worse off
• Both EXTENT and SEVERITY (for the worst off) of energy
poverty improved
CBA results
€20m
p/a on
EE
Unlimited
EE spend
Costs of
upgrades
Costs of BER
(reallocation
scenarios)
Admin
Energy
savings
2% p/a price
increase
Comfort gains
Willingness-
to-pay
Reduced
mortality and
morbidity
Mortality -
VSL
Reduced
costs
associated
with sickness
/ illness
Emissions
CO2 and
other
emissions
EU carbon
price and EU
BeTa
Methodex
Subsidy
reductions
Reallocated
scenarios
only
Saving to
exchequer
Reinvest in
more activity?
Every € invested
returns €2 to €3
to society
No matter what
is spent on
upgrades – there
is a net societal
return
Re-allocation
leads to subsidy
savings
Health
and
comfort
gains
represent
70 – 80%
of
benefits
*See Scheer, J. (2012)
Recognition of health benefits of EE
History of analysis and key publications
Recent fuel poverty analysis
Key questions ... Next steps?
Key questions … and some answers
Q: Did previous studies have an impact on recent levels of
Government energy efficiency spend in Ireland?
A: Hard to be conclusive, but anecdotally, yes. Good
stakeholder buy-in, media coverage, Ministerial launch.
Q: Do we need more studies?
A: Yes! Previous studies largely ex-ante. Get empirical, be
patient and thorough. Leverage existing data …
Q: What would be different this time around?
A: - Evidence base from Ireland
- Involvement of Finance and Health economists
- Community delivery model improvements - wider
social impacts
Next steps …
Begin collaboration
• Researchers, policy makers (Interdepartmental approach;
Energy / Health / Finance), Ministers (political buy-in)
Face challenges …
• Structures don’t support cross-departmental
action/budgeting
• Performance criteria need to be re-defined / influenced
Establish data streams
• Current (excellent) health longitudinal studies don’t make
the energy link – easier to leverage existing data gathering /
surveys
The Sustainable Energy Authority of Ireland is partly
financed by Ireland’s EU Structural Funds Programme co-
funded by the Irish Government and the European Union.
Wanted: Champions!
Champion: A person who voluntarily takes
extraordinary interest in the adoption,
implementation, and success of a
cause, policy, program, project, or product.
References
1. Clinch, J. P. & Healy, J. D., 1999. Housing Standards and Excess Winter Mortality in
Ireland. Environmental Studies Research Series Working Paper 99/02, Department of
Environmental Studies, University College Dublin.
2. Clinch, J. P. & Healy, J. D., 2000. Housing Standards and Excess Winter Mortality. Journal
of Epidemiology & Community Health, September, 54(9), pp. 719-720.
3. Clinch, J. P. & Healy, J. D., 2001. Cost-benefit analysis of domestic energy efficiency.
Energy Policy, Volume 29, pp. 113 - 124.
4. Clinch, J. P. & Healy, J. D., 2003. Valuing improvements in comfort from domestic energy-
efficiency retrofits using a trade-off simulation model. Energy Economics, Volume 25, pp.
565 - 583.
5. Department of Communications, Energy and Natural Resources, 2011. Warmer Homes: A
Strategy for Affordable Energy in Ireland, Dublin: DCENR.
6. Institute of Public Health (IPH), 2007. All-Ireland Policy Paper on Fuel Poverty and Health.
http://www.publichealth.ie/files/file/FuelPoverty_0.pdf
7. Scheer, J, 2012. Alleviating Energy poverty In Ireland – An Efficient Approach for Future
Government Expenditure. Available from the author: [email protected]