Incentivizing Energy Efficiency In Public Buildings Through Information Disclosure: North Carolina Community Colleges As Case Study

Abstract

The energy efficiency gap, which describes the difference between current and socially optimal levels of energy efficiency, has persisted for decades, even as our nation’s energy intensity has improved. Economics literature tends to focus on informational, behavioral, and large-scale market failures when positing the causes of the gap. However, state and local policy failures may greatly contribute to the gap as well. Information disclosure policies are particularly well suited to narrow the energy efficiency gap, because they cost-effectively address behavioral and informational failures and can be easily implemented on the local level. The Federal Government has utilized such policies to vastly improve the energy efficiency of its buildings’ stock, but state and local governments have been slow to follow suit. This Master’s project investigates the potential of utilizing information disclosure policies to narrow the energy efficiency gap in public buildings at the local level by analyzing the North Carolina Community College System as a case study. First, analysis of the Toxics Release Inventory, the archetypal environmental information disclosure policy in the United States, yields recommendations for incentivizing energy efficiency in public buildings. Next, a comparative analysis of energy consumption in South Carolina Technical Colleges reveals that the potential for cost-effective, near-term energy efficiency investments in North Carolina Community Colleges could yield annual savings of ~$5 Million. Finally, lessons are drawn from South Carolina’s early adoption of information disclosure policies to yield concluding recommendations for bolstering information disclosure policies in North Carolina. Stronger information disclosure policies coupled with polices that rectify local policy failures could better incentivize energy efficiency in North Carolina’s Community College buildings.