Table of Contents

Handbook on Energy and Climate Change

Handbook on Energy and Climate Change

Elgar original reference

Edited by Roger Fouquet

This timely Handbook reviews many key issues in the economics of energy and climate change, raising new questions and offering solutions that might help to minimize the threat of energy-induced climate change.

Chapter 19: Climate change, buildings and energy prices

Alberto Gago, Michael Hanemann, Xavier Labandeira and Ana Ramos

Subjects: economics and finance, energy economics, environment, climate change, energy policy and regulation, environmental sociology


Buildings are a crucial sector for controlling energy demand and, therefore, greenhouse gas (GHG) emissions. Buildings currently account for around 40 percent of the final energy use in the world (IEA, 2008; IPCC, 2007) and, as indicated by Figure 19.1, in developed countries such as the USA they are responsible for 30 percent of total energy consumption and for around 20 percent of carbon dioxide (CO2) emissions. The importance of buildings for energy and environmental policies also arises from the fact that they constitute a ‘stock’ of future energy consumption and emissions. For example, around 60 percent of the existing buildings in the UK, the USA, or Spain were built before 1980 (Sweatman and Managan, 2010) and therefore are likely to have lower energy efficiency and higher GHG emissions than modern buildings. Thus, failing to retrofit old buildings to improve their energy and environmental performances, or an inadequate construction of new buildings, may endanger GHG mitigation. In this sense, there is a particular concern with emerging economies where increasing population and economic growth may lead to a renewed activity in building construction that could considerably expand future energy consumption and its associated GHG emissions. Higher consumption and emissions would be brought about by a combination of more energy-inefficient buildings (stock) and the increasing flow demanded by households with rising incomes.

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