Energy Efficiency: Still Wasting in the Building

by Silvia Schmid


Last week’s conference “Building Energy Efficiency: Seeking Strategies that Work” offered the opportunity to discuss the many barriers to advancements in energy efficiency beyond current standards. The event was cohosted by the Wharton Initiative for Global Environmental Leadership (IGEL), the Institute for Urban Research at the University of Pennsylvania, the Wharton Risk Management and Decision Processes Center, and the Wharton Small Business Development Center, in partnership with the Energy Efficient Buildings Hub and sponsored by SAP. Speakers and panelists provided valuable insights on the current status of energy efficiency in buildings, addressing topics ranging from consumption measurement and increased transparency, to some of the psychological challenges inherent in adopting more energy efficient behavior. The common message throughout the day was how much remains to be done to make energy efficiency a mainstream priority.

Keynote speaker Joseph Stettinius of the commercial real estate firm Cassidy Turley started the conversation by highlighting the need for increased use of operational metrics (e.g. the EPA’s EnergyStar) to guide the construction of energy efficient buildings. Operational metrics provide performance-derivative scores, differing from the design-focused LEED™ system, which offers “a blueprint for what an efficient building could look like,” but does not measure and account for a building’s energy performance. Mr. Stettinius also reminded us of the importance of “what we have lost” by failing to make state-of-the-art energy efficiency measures the norm, and he emphasized that, rather than focusing on praising buildings that have attained a high level of energy-efficiency, we should instead shift our attention to those buildings that still suffer from structural energy defects. The call for better operational metrics was echoed by professor William Braham of Penn’s School of Design, who argued that to make a genuine leap forward we should leave norms and prescriptive standards behind, moving instead towards more stringent “aspirational” standards, such as net zero energy.

The barriers to increased efficiency in buildings are numerous and varied, and they include not only structural defects, but also behavioral change. Not incentivized by large savings from economies of scale, residential and small commercial tenants often lack the motivation to invest in costly energy efficiency retrofits. One way to address this issue, according to Richard Bernknopf of the University of New Mexico, is the provision of cheap technology for monitoring consumption, which can lead to changes in behavior before drastic – and more costly – home improvements take place. Then, better incentives – and a shorter payback time – would be needed to offset the high costs of energy retrofits can impose on individual owners, according to Brad Molotsky of Brandywine Realty Trust and Patrick Gurian of Drexel University, who point to incremental rates of return as a more attractive deal to small commercial and residential tenants.

Mr. Bernknopf also addressed the human need for instant fulfillment, which he sees as a considerable obstacle to greater energy efficiency, especially since this need seems to become more entrenched as we gain access to more and more portable technologies offering instant gratification.

Regarding the need for a shift in the cultural perception of energy efficiency, Ken Ogawa of Penn Facilities & Real Estate Services compared the paths to energy efficiency between the U.S. Navy, the City of Pennsylvania, and Penn, arguing that the Navy’s success occurred via mandatory policies, strong oversight and dedicated staff, as well as decentralized budget responsibility that allows the departments to keep savings they generate from energy efficiency. Perhaps the strongest incentive, he added, was the sailor conservation culture in regards to resources: “on a submarine, if you don’t make it or bring it with you, you don’t have it. So conservation is easy!”

To convince those of us above water, changing the messaging of energy efficiency to suit the interests of specific audiences can help. Research by Dena Gromet of the Wharton Risk Center and her colleagues shows that liberal participants were more likely to consider occupying a more costly but energy efficient building than political conservatives. There was evidence of further choice polarization when participants were presented with a message of environmental stewardship. Their studies illustrated that a message of energy independence, on the other hand, can be more broadly appealing across the political spectrum when paired with economic incentives. Thus, although we would hope energy efficiency would be attractive as an end in itself, shifting the emphasis of particular messages can help advocacy efforts.


The consensus at the conference was that energy efficiency is a work in progress and strong federal oversight is still lacking. As the focus shifts more toward commercial buildings, where there is high growth, we will require better financing mechanisms and more consistency in financial returns. Increased transparency should be complemented with easy and cheap monitoring technology to increase consumption awareness. And there needs to be a move from the voluntary to the mandatory, where energy efficiency becomes the norm, and new buildings with obvious structural energy defects suffer penalties and, more importantly, public disapproval.

2013_05_The Rapid Rise of Green Building_Page_01To learn more, check out the new Wharton IGEL Special Knowledge@Wharton Report “The Rapid Rise of Green Building”.


Image composite by Silvia Schmid. From top left to bottom right: Michael Britt, Patrick Gurian, Dena Gromet, Howard Kunreuther, Arthur van Benthem, Ken Ogawa, Ron Herbst and Jaqui Jenkins.

2 responses to “Energy Efficiency: Still Wasting in the Building

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