Do Mandatory Energy Audits Reduce Building Energy Use?: A Bayesian Analysis of New York City's Local Law 87

27 Pages Posted: 26 Nov 2018

See all articles by Constantine E. Kontokosta

Constantine E. Kontokosta

New York University - Center for Urban Science and Progress

Danielle Spiegel-Feld

New York University (NYU) - Guarini Center on Environmental and Land Use Law

Sokratis Papadopoulos

New York University (NYU) - Center for Urban Science and Progress

Date Written: October 31, 2018

Abstract

Cities are experimenting with a range of policy and regulatory tools to reduce energy use in the building sector as a pathway to substantial carbon emission reductions. Increasingly, cities are turning to policies that reduce information asymmetries and knowledge gaps through data transparency, focusing on existing buildings and the potential to achieve up to 50% energy savings through retrofit adoption. These include energy disclosure - or benchmarking - ordinances and, more recently, mandatory energy audit requirements. While energy benchmarking is a relatively low-cost mandate, energy audits impose non-trivial costs in terms of capital and time for building owners. The question we explore here is whether mandatory energy audits lead to reduced energy consumption over time. We collect detailed energy use and building attribute data from 2011 to 2016 for approximately 4,000 buildings in New York City and integrate with a unique dataset of mandatory energy audit reports for a randomly selected sample conducted in 2013 and 2014. We use non-parametric statistical tests and Bayesian regression to evaluate the impact of energy audits on building energy performance, compared to a control group of matched buildings not subject to the audit requirement. We find that mandatory energy audits have a modest negative impact on energy consumption, consistent with savings expected from low-cost energy conservation measures and retro-commissioning activities. The result reinforces the hypothesis that audits, by themselves, create an insufficient incentive to invest in energy efficiency upgrades at the scale needed to meet city carbon reduction goals.

Keywords: Energy Audits, Data-Driven Energy Policy, Building Efficiency, Energy Benchmarking, Bayesian Regression, Impact Analysis

JEL Classification: H23, R38, Q40, Q48

Suggested Citation

Kontokosta, Constantine E. and Spiegel-Feld, Danielle and Papadopoulos, Sokratis, Do Mandatory Energy Audits Reduce Building Energy Use?: A Bayesian Analysis of New York City's Local Law 87 (October 31, 2018). Available at SSRN: https://ssrn.com/abstract=3275809 or http://dx.doi.org/10.2139/ssrn.3275809

Constantine E. Kontokosta (Contact Author)

New York University - Center for Urban Science and Progress ( email )

1 MetroTech Center
19th Floor
Brooklyn, NY 11201
United States

Danielle Spiegel-Feld

New York University (NYU) - Guarini Center on Environmental and Land Use Law ( email )

40 Washington Square South
Rm. 411
New York, NY 10012
United States

Sokratis Papadopoulos

New York University (NYU) - Center for Urban Science and Progress ( email )

1 Metrotech Center
19th Floor
Brooklyn, NY 11201
United States

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