Considering Health Benefits in Irish Energy Efficiency Policy … · 2019-11-27 · • Energy savings potential by measure • 10 year programme / 30 years benefits Energy assessment

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]