Keywords

1 Introduction

This chapter assesses trade-offs in urban energy use to advance sustainable planning of cities, contributing to the European Union’s (EU) climate-neutrality ambition and the EU Cities Mission. While scientific consensus is clear about climate change, devising a more sustainable pathway for energy consumption is not straightforward. For example, an economy that uses fewer resources and can handle challenges better is a central goal of the European Green Deal (European Commission, 2019). But many people today worry about the cost of living and are concerned about equity, and some political groups use these worries to reject environmental and climate policies (Huber et al., 2021). Thus, the framing of environmental measures as costly interventions that overwhelm peoples’ lives makes it hard to make the necessary changes. Moreover, environmental and climate efforts are often portrayed mainly in terms of technological change with limited involvement of users and other stakeholders in the process of planning. Indeed, such an approach omits the possibility to engage the public in shifting to a less resource-intensive energy use (Pineau, 2023). This risks making subsequent policies less acceptable.

In this chapter, we reframe the debate to facilitate stakeholder consensus. We limit the scope of our analysis to buildings, which comprise approximately 40% of EU energy consumption and 36% of energy-related GHG emissions (European Union, 2024). The EU has created numerous directives to improve energy efficiency in buildings, e.g. the revised Energy Performance of Buildings Directive (European Union, 2024) and the Energy Efficiency Directive (European Union, 2023). The former aims to increase the rate of renovations and decrease emissions through measures such as the introduction of renovation passports, targeted financing, and attention to energy poverty, as well as National Building Renovation Plans (European Union, 2024). Moreover, other measures include “one-stop shops for the energy renovations of buildings for homeowners, small and medium-sized enterprises and other stakeholders” (European Union, 2024, p. 38). In this context, stakeholders may include real estate developers, construction firms, landlords, urban planners, funding institutions, environmental agencies, and housing associations. Thus, there exists an opportunity to engage a broad range of stakeholders in energy efficiency decisions to facilitate decarbonisation.

While the regulatory framework aims to enhance buildings’ energy efficiency, achieving the intended objectives depends on successful implementation by EU Member States. The two largest barriers to accelerating implementation are lack of financing and lack of knowledge about energy efficiency measures (Carlander & Thollander, 2023; Yeatts et al., 2017). We argue that other barriers include limited engagement of users in decision-making and the framing of possible solutions mainly in terms of costs, which limits the range of acceptable measures. We, therefore, present an approach to facilitate the understanding of how the implementation process can be adjusted to include a range of solutions for improving energy efficiency that not only are cost-effective but also consider CO2 emissions and other aspects of social wellbeing, while encouraging stakeholder dialogues around decision-support tools (e.g. multicriteria models) to improve understanding of costs and benefits of various measures. The resulting transparency of the approach in illustrating trade-offs could enable consensus around acceptable solutions and uncover incentive-compatible mechanisms for their implementation.

Using STEM expertise, we developed a multicriteria model that visualises trade-offs for different energy efficiency measures in buildings, which was informed by SSH perspectives from Political Science. Intended users of the model are policymakers, but other users (including housing associations, regulatory agencies, and investors) are also targeted. SSH researchers posited plausible conflicts among stakeholders based on previous literature on energy efficiency in buildings, with STEM researchers then devising a quantitative framework for analysis of these conflicts and ways of reconciliation, which was subsequently exemplified for a case of a housing association. A housing association was used as an empirical example, but the model can be adjusted and applied to different settings and scales. A participatory stakeholder workshop was organised to receive feedback on the model. This feedback can further inform model refinement and allow the model to be applicable to different contexts and users.

A literature review showed that European regulation has largely relied on soft measures that overlook direct regulation, incentives, and awareness of the wider benefits of energy efficiency measures in buildings (Carlander & Thollander, 2023; Yeatts et al., 2017). The literature has also identified missed opportunities in cases where building renovations take place without attention to energy efficiency measures (Mjörnell et al., 2019). Limited knowledge about possible energy efficiency measures’ costs and benefits is one important barrier. While there are various tools that have been developed to address this drawback, e.g. artificial intelligence (AI) (von Platten et al., 2020), such methods are difficult for users to grasp transparently. Instead, multicriteria analysis has proven effective at communicating attractive solutions and options in real-world settings involving public authorities (Montibeller & Franco, 2011; Phillips, 2011). Thus, this project developed a multicriteria tool to visualise opportunities and trade-offs in energy efficiency measures aimed at user understanding, including policymakers.

The stakeholder workshop tested the model’s usefulness as a mechanism for gaining an understanding of options for implementing energy efficiency measures in the built environment. The workshop took place on 11 December 2023 in Stockholm, Sweden and included 12 representatives from public authorities, the building sector, the finance sector, tenants’ associations, and researchers working on energy efficiency measures in buildings. Our motivation to engage these stakeholders stems from the fact that these users can be impacted by decision-making regarding energy efficiency policies, but they are often not adequately consulted in the process, which diminishes the effectiveness of policies (Seibicke, 2024). We argue that a deeper understanding of users’ needs, and acceptance of policies can be gained through employing a multicriteria model-supported process for participatory governance. Multicriteria models can serve as a tool for organising stakeholder engagement processes and a framework for decision-making. This approach could be applied by the revised Energy Performance of Buildings Directive’s one-stop shops for the energy renovations of buildings to encourage stakeholder participation (European Union, 2024).

2 Application of a Multicriteria Model for the Built Environment

2.1 Handling Conflicting Objectives

The purpose of using a multicriteria model is to foster a transparent assessment of trade-offs between conflicting objectives (Winston & Albright, 2018). We take this perspective to examine the trade-offs between economic and environmental objectives in the context of a building energy management system (BEMS). Our multicriteria model yields a range of intermediate solutions that address conflicting objectives, such as minimising either costFootnote 1 or GHG emissions.Footnote 2 In other words, the model provides solutions along a Pareto frontierFootnote 3 between cost and GHG emissions minimisation. More importantly, the impacts of energy efficiency measures, subsidies, tariff structures, and technology availability in catalysing changes to building configuration and operations can also be assessed.

Our analysis uses data that reflect an urban housing association in Stockholm, Sweden (Siddiqui, 2024). In our default scenario, the association purchases all energy from suppliers at given prices without any effort to curb consumption. This do-nothing (DN) scenario contrasts with a Base scenario, in which the association may adopt demand- and supply-side measures to reduce consumption, e.g. by renovating the building envelope or installing an on-site generation and storage technologies. Moreover, the association can prioritise either cost minimisation, GHG emissions minimisation, or an intermediate objective between these two extremes. Consequently, the resulting Pareto frontier in the Base scenario (Fig. 10.1) stretches from point A to point B in minimising either cost or GHG emissions, respectively. Meanwhile, points such as C, D, and E identify intermediate solutions that minimise cost for any given level of GHG emissions. Hence, any solution on the Pareto frontier can be interpreted as one in which it is impossible to improve upon one objective without deteriorating the other.

Fig. 10.1
A line graph shows daily carbon dioxide emissions in kilograms on the vertical axis and daily cost in euros on the horizontal axis. The line shows a decreasing trend, starting at 65 kilograms of emissions and 25 euros of cost, and ending at 5 kilograms of emissions and 120 euros of cost.

Pareto frontiers that illustrate the trade-off between conflicting objectives for do-nothing (DN) and base scenarios

Full size image

Via this framework, we examine plausible compromises on the Pareto frontier and how the Pareto frontier is affected by energy efficiency measures, energy tariffs, and technology availability. The model shows that modest adjustments to existing consumption patterns could reduce GHG emissions. For example, a move from points A to C in the Base scenario leads to a roughly 8% decrease in GHG emissions at a cost increase of 1.5%. Such a transition is facilitated by increasing energy purchases during off-peak hours (through e.g. better utilisation of existing heat storage) to then avoid purchases during peak hours, when more-polluting plants are dispatched. Yet, the scope for this temporal shift in consumption is limited by the size of the storage unit, which is why the Pareto frontier for the DN scenario extends only from points A to C. In effect, deeper decarbonisation in moving from points C to E requires a larger storage unit to offset GHG emissions from peak-hour heat purchases. Such an investment reduces GHG emissions by 75% relative to those at point A, albeit at more than double the cost. In a similar vein, more ambitious decarbonisation efforts, e.g. to points D and B, necessitate more expansive technology adoption, e.g. building renovations and solar-thermal units. Hence, while points A and B are prominent on the Pareto frontier, intermediate solutions, such as points D and E, indicate the diversity of plausible solutions that could provide compromises around which consensus could coalesce. One of the main points that Fig. 10.1 communicates is that the choices available to stakeholders are much wider than generally perceived and that investments in certain energy efficiency measures can reduce GHG emissions at a much higher rate than the associated cost increases.

The results further indicate that even compromise solutions such as points D and E render a more complicated nexus of energy flows in the exemplar housing association. As a result, an adequate policy framework that supports energy efficiency measures is paramount. For instance, removing the demand charge on the maximum rate of consumption from the energy tariff would increase GHG emissions. Furthermore, energy efficiency measures catalyse more effective use of adopted technologies. Indeed, in tracing out Pareto frontiers, we assume that cost-minimising housing associations could put greater weight on GHG emissions—this would require the provision of, for example, CO2 taxes, energy tariffs with demand charges, and subsidies on technologies. Thus, policymakers could use multicriteria models to argue the need for, and justify the adoption of, policy support measures, such as taxes and regulations.

2.2 Stakeholder Feedback

The practical challenges to implementing such a multicriteria framework were the focus of our participatory stakeholder workshop. Through this forum, we elicited participants’ reflections on (1) barriers associated with achieving greater energy efficiency in buildings generally, (2) multicriteria model design and applicability, and (3) regulatory support for the implementation of the framework.

2.2.1 Barriers to Greater Energy Efficiency in Buildings

Stakeholders mentioned broader processes in the energy sector, economy, and policy that affect possibilities for improving energy efficiency in buildings. For example, in the context of Sweden, energy prices are not high enough to incentivise reduction of energy use and investments in efficiency measures, while the volatility of energy prices adversely affects the building sector. Stakeholders also suggested that the tax system needs to be adapted, e.g. tax deductions on home renovations should incentivise energy efficiency measures. Others mentioned the importance of policy packages instead of single measures to prevent one policy from undermining another, for example, if investments into energy efficiency take away investments from other programmes. In addition, energy security and energy poverty were mentioned as important aspects to be considered in the process of policy design. Through the discussions, it highlighted the need to engage a range of stakeholders to weigh-up differing perspectives and reach agreement on ways forward.

2.2.2 Multicriteria Model Applicability and Design

Many workshop participants reflected on the multicriteria model’s complexity and their inexperience using it. However, they also saw the ‘mindset’ of these models as a useful device for understanding trade-offs embedded in the decision-making process. As such, the model itself could be adjusted for ease of use and accessibility to be more widely deployed. On a more conceptual level, it was seen as a tool for scenario analysis to set targets, make trade-offs visible, highlight a business case, use during stakeholder-engagement discussions, and incorporate in building-sector roadmaps. The main feedback from stakeholders about the model design related to barriers, including social and cultural indicators, such as accessibility, safety, wellbeing, and other environmental impacts not being captured. The challenge lies not only in the operationalisation of some of these factors but also in the difficulty of interpreting a complex model. Thus, the model needs to be used alongside other mechanisms and considerations. Yet, the central function of the model remains useful, i.e., demonstrating multiple possibilities along the Pareto frontier, regardless of which attributes are considered. Indeed, as one participant reflected, “politicians and authorities should require that these models are used,” while another indicated the value of the model, yet warned that the analysis “becomes complicated including multiple variables.” Hence, a multicriteria framework can facilitate the exploration of different combinations of solutions around which a consensus could coalesce. This points to the value in transparently discussing various trade-offs using user-centred approaches.

2.2.3 Policy and Politics of Energy Efficiency

Regarding policy solutions to support the implementation of the multicriteria framework, the majority of stakeholders mentioned the need for CO2 pricing, energy efficiency auctions, green loans and investments in new technologies, tax-free maintenance funds, and subsidies for various programmes, including energy-savings assessments, renovation, and insulation. In addition, stakeholders emphasised the need for energy efficiency standards, and enforcement and monitoring mechanisms for compliance with targets via regular energy reviews. Some argued that new measures are needed that better reflect environmental impact, such as CO2 emissions per capita or energy consumption per capita, instead of energy consumption per square metre. Indeed, one participant mentioned incorporating “other environmental impacts” besides emissions along with “social aspects, cultural aspects.” Other solutions mentioned include improving the use of buildings, investing in skills and knowledge development for renovating and maintaining buildings, and improving public knowledge on savings, costs and emissions. To improve the usability of the multicriteria model and implementation of its solutions, stakeholders emphasised that policymakers must support the use of such models via regulation and financial incentives. This points to the existence of opportunities for consensus building and mindset shifts about the wider benefits of energy efficiency measures by emphasising their social considerations.

3 Achieving Our Recommendation

The results from the participatory workshop show that multicriteria models can be useful framing tools to involve users in decisions about adopting efficiency measure. This is captured in our policy recommendation outlined in our title—understand stakeholder perceptions and implementation possibilities for energy efficiency measures and policy through multicriteria modelling. By highlighting both costs and benefits of efficiency measures, participatory workshops can facilitate dialogues among actors with diverse perspectives and help highlight feasible options for energy efficiency. Such discussions also create opportunities to envisage other aspects of the European Green Deal, such as improvements to social or health outcomes, for instance through the New European Bauhaus (European Commission, 2021).

Specifically, we recommend the following actions. Decision-makers should present trade-offs, such as cost and emissions, and the combinations of acceptable solutions to various stakeholders such as housing associations, regulatory agencies, and financial institutions. For instance, this approach could be integrated in the revised Energy Performance of Buildings Directive’s (European Union, 2024) one-stop shops for the energy renovations of buildings to encourage stakeholder participation. Our analysis of trade-offs between costs and reductions in GHG emissions associated with energy efficiency measures shows that the choices available to stakeholders are much wider than generally perceived, and that investments in certain energy efficiency measures are able to reduce GHG emissions at a much higher rate than the associated cost increases. Therefore, stakeholders should be aware that certain measures can be both cost and emissions efficient, e.g. heat storage. Intermediate solutions also include wider benefits beyond the climate imperative, such as greater comfort for tenants and cost savings, for example, by being less dependent on market prices, as well as wider societal benefits, such as improved air quality and reduced stress on energy systems.

Furthermore, decision-makers should adopt a user-centred approach to energy efficiency measures by encouraging stakeholder dialogues around decision-support tools to improve understanding of costs and benefits of various measures. Recognising the difficulty of user engagement with policymaking, we recommend further embedding stakeholder dialogues into the formal political process at the stages of agenda setting, policy formulation, and implementation. Furthermore, structuring the stakeholder dialogue around the Pareto frontier proved to be fruitful. The multicriteria model served as a compelling visualisation and scenario tool, operationalising abstract ideas into a concrete set of plausible outcomes. Besides policymakers and housing associations, other organisations, e.g. regulatory authorities and financial institutions, that incorporate the perspectives of diverse stakeholders and conflicting objectives would benefit from taking a multicriteria perspective. Such consensus building has been amenable in real-world contexts, e.g. Coventry City Council (Montibeller & Franco, 2011).

Finally, decision-makers should identify opportunities for consensus building and mindset shifts about the wider benefits of energy efficiency measures by emphasising their social considerations. While there is a clear climate imperative for undertaking energy efficiency measures, stakeholders may be more motivated by other considerations. These could incorporate diversity, equity, and resilience. Although costs and emissions are also social considerations that receive the most attention, others would resonate with the public (Ewald et al., 2022) and should be addressed in such multicriteria assessments. Highlighting wider benefits of energy efficiency measures in consultations with stakeholders could be one way of identifying opportunities for consensus building around feasible options. Taking social considerations into account is particularly important for gaining acceptability for energy efficiency solutions.