2012 North Carolina Energy Conservation Code: Environmental and Economic Impacts

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JANARO, JULIA Master of Natural Resources – Policy and Administration Technical Option. Environmental and Economic Impacts of the 2012 NC Energy Conservation Code in North Carolina Successful strategies for natural resources management are intended to connect long-term environmental solutions and benefits with present-day action, policies, and investments. While a Cost-Benefit Analysis (CBA) is required for any major environmental policy (Hsu & Loomis, 2002), it is also a means to address the interests of multiple stakeholders - and to ensure that the limited resources available for implementation are used as effectively as possible. The difficulty in a CBA for a building code analysis is determining the viewpoint. The perspective may reflect the first costs of the contractor, or the long-term homeowner to whom these costs are passed down. This exercise is especially relevant in addressing natural resources demand that is directly tied to the well-being of a population or its economy – for example, creating safe and comfortable buildings for life and work. The energy demand from the building sector is a substantial component of the national energy economy. Policy tools to manage, plan, and optimize efficiency for this demand are necessary for both our economic and environmental future. Connecting the increased energy efficiency of construction practices with reduced strain on energy and land resources is not a new concept. National initiatives developed in cooperation with energy utility companies have reported that improving energy efficiency “is one of the most constructive, cost-effective ways to address the challenges of high energy prices, energy security and independence, air pollution, and global climate change in the near future.” (National Action Plan for Energy Efficiency Vision, 2008). With the building sector consuming roughly 40% of U.S. energy consumption (US Energy Information Administration, 2015), there is tremendous opportunity for building energy policies to proactively address these growing issues. North Carolina population growth has been outpacing the national average since the 1940s. The most recent projections for continued increased growth, along with the urbanization trends of the current population, will have a tremendous effect on social and environmental resources. Demand for new housing units is expected to increase to 2.46 million new housing units by the year 2050 (UNC Carolina Population Center Carolina Demography, 2013). While the residential construction market is often seen as a positive harbinger of a state’s immediate economic health, there are long-term economic and environmental implications resulting from the energy demand associated with these structures. In North Carolina, new residential and commercial buildings are subject to compliance with the requirements of the 2012 North Carolina Energy Conservation Code (NCECC). The 2012 NCECC represents 30% energy improvement for commercial buildings and 15% energy improvement for residential buildings over the 2006 NCECC performance requirements. The NCECC is typically modeled after the most recent version of the International Energy Conservation Code (IECC), written by the International Code Council. The 2012 NCECC was only adopted after a highly contentious and year-long debate between representatives from home-builder organizations and environmental groups. While code updates are not typically contested, the efficiency goals of the code document (with 30% energy efficiency requirements for residential construction) sparked concern from the construction industry. In fact, the code has been regularly contested by North Carolina legislators even after it went into effect. While disagreements over the policy may seem to pit economic interests against environmental ones, this project assesses whether energy performance requirements might effectively be positive from both perspectives. The goal of this project is to 1) Develop a cost-benefit analysis for individual homeowners of the actual first-cost and longterm savings implications of the NCECC, 2) Identify the broader environmental impact potential of these energy policies, and 3) use these findings to identify recommendations for the next updates to the Energy Conservation Code. Census data, economic projections, detailed energy code analysis, and energy payback data were all used to integrate the localized, state-wide, ecological, and economic concerns of North Carolina energy code policy. Ultimately, the optimal energy conservation policy for North Carolina (and the one that can be supported by the widest range of stakeholders) will need to balance all these scales and types of considerations. The intent of this project is view energy efficiency policy from a broader perspective, to increase the effectiveness of an existing policy resource, and to contribute to the ongoing dialogue concerning energy demand from the building sector. Energy efficiency policy is a pragmatic approach to natural resource demand that speaks to key aspects of North Carolina’s personal, economic, and environmental well-being. There is great potential for finding and achieving a common interest – and acceptable policy direction - amongst those stakeholders.