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03-10-2014

Clarkson University Professor to Give Energy Policy Talk for European Commission

Well aware that a complex issue calls for a complex solution, Clarkson University Assistant Professor of Political Science Stephen Bird will travel to Belgium later this week to advise the European Commission on policy solutions regarding the Split Incentive Problem.

Stephen BirdHe will speak at a workshop for the European Commission’s Institute for Energy and Transport, addressing his research about the billions of dollars' worth of energy that is lost annually from inefficiencies in rental housing.

This Split Incentive Problem refers to cases in which renters pay high energy bills because landlords have no motivation to improve energy efficiency. In other situations, tenants waste energy because they aren't responsible for paying the energy bills.

“Not too many people are doing work in this area. Someone over there knew about my work and reached out to me to come and talk to the European government,” Bird says. “Energy efficiency is supposed to be easiest way to address energy costs, but it turns out to be difficult.”

The cost of lost energy in rental units ranges from $22 to $60 billion a year in the U.S., the professor notes. This hits low-income renters especially hard, as they must spend higher percentages of their income for heat.

While it’s easier to upgrade commercial properties, it's not so easy for landlords and tenants, Bird explains. Improvements pay off in terms of energy savings, but the payback may take three to 12 years, and the average homeowner in the U.S. moves every seven years. On average, renters move every two years, so landlords can be leery of investing in energy upgrades.

“Public housing and universities have the opposite problem. Students may open windows and waste heat, or wear shorts in winter and turn up the heat to compensate. Those are big costs,” says Bird, whose research has been published in Energy Policy and is part of a NYSERDA-funded project on Smart Housing at Clarkson.

“Finding a creative solution to the Split Incentive is partly economic, partly political. The U.S. is starting to pay attention, though there's more action on commercial property than residential,” he says. “In a tenant/landlord situation, I'd like to see the government provide a benefit to landlords to improve energy efficiency.”

Clarkson University launches leaders into the global economy. One in five alumni already leads as a CEO, VP or equivalent senior executive of a company. Located just outside the Adirondack Park in Potsdam, N.Y., Clarkson is a nationally recognized research university for undergraduates with select graduate programs in signature areas of academic excellence directed toward the world’s pressing issues. Through 50 rigorous programs of study in engineering, business, arts, sciences and health sciences, the entire learning-living community spans boundaries across disciplines, nations and cultures to build powers of observation, challenge the status quo, and connect discovery and engineering innovation with enterprise.

[A photograph for media use is available at http://www.clarkson.edu/news/photos/sbird.jpg .]

[News directors and editors: For more information, contact Michael P. Griffin, director of News & Digital Content Services, at 315-268-6716 or mgriffin@clarkson.edu.]

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