MULTICRITERIA PRIORITIZATION OF POLICY INSTRUMENTS IN BUILDINGS ENERGY RETROFIT

Improvement of energy-efficiency in residential buildings is a crucial issue in Italy, where 55% of the building stock is older than 40 years and real estate assets are responsible for 33% of primary energy consumption. Consequently, the Italian residential sector offers considerable potential for reducing energy use and GHG emissions, particularly through energy-efficient renovations. Governments can introduce a wide range of policy instruments to encourage households in undertaking energy-efficient renovations: direct financial investments, regulatory instruments (e.g., performance and technology standards), economic and market-based instruments, support information and voluntary actions. Since 2006, the Italian Government has introduced fiscal incentive programs to enhance energy efficiency in residential buildings. During the period 1998-2016 the cost for the Italian Government to due to fiscal incentives (i.e. tax deductions) was extremely high compared to tax revenues. Thus incentives turned out to be excessively costly and not cost-effective. The design and implementation of incentive policies to buildings energy retrofit is a complex process involving a great number of decision variables and actors. Cost-effective incentive policies should prove capacity in stimulating investments, reducing social and environmental costs and promoting innovation. This complexity is exacerbated in the presence of stringent public budget constraints and lack of financial resources. In order to favor the implementation of cost-effective retrofit strategies, the policy maker must take into consideration along with buildings age and construction materials, social costs and benefits, EU and national targets, and environmental concerns. In this context, where multiple objectives need to be pursued, multiple criteria approaches provide a methodological framework to address the complexity of economic, physical, social, cultural and environmental factors which characterize incentive policies. In this paper we propose a multi-criteria decision model to support the policy maker in ranking sustainable incentive policies. In detail, we provide an AHP model for multiple-criteria prioritization of policy instruments to foster investments in energy retrofit of existing buildings.