How Not to Reduce Carbon Dioxide Emissions: An Unbalanced Focus on Energy Efficiency in Germany’s Building Rehabilitation Policies

Germany needs to reduce CO2 emissions from space heating in its old buildings to net zero by 2045 to fulfil its climate goals. However, direct CO2 reduction measures in existing buildings receive relatively little subsidy support from the federal government’s German Development Bank, compared to generous subsidies for energy efficiency measures. This interdisciplinary paper evaluates this phenomenon by comparing costs and CO2 abatement effects of ever higher energy efficiency measures, alongside the costs of direct CO2 reduction through heat pumps and onsite photovoltaics. It uses a set of carefully selected reports on the costs and benefits of renovation to a range of energy efficiency standards in three common types of multi-apartment buildings in Germany, updating these for 2024 construction, energy, and finance costs. The cost of the CO2 saved is extremely high with energy efficiency measures and absurdly high with the highest energy efficiency standards, up to 20 times the cost of CO2 abatement through other means, such as offsite renewables. This reduces markedly with onsite CO2 reduction measures. This paper sets this analysis in the context of asking what social, cultural, and discursive factors extol energy efficiency so highly that policy tends to thwart its own stated goal of deeply reducing CO2 emissions.