08/06/2010
While significantly reducing Hungarian greenhouse gas emissions and addressing other social problems at the same time, up to 130,000 jobs could be created in Hungary by the end of this decade through a large-scale program for energy-efficient building renovations. This has been revealed by a study carried out by the Center for Climate Change and Sustainable Energy Policy (3CSEP) at Central European University (CEU) in Budapest, which was released on June 8, 2010. 3CSEP has scientifically investigated the potential employment effects of a large-scale energy-efficient retrofit program in Hungary. The study has been commissioned by the European Climate Foundation.
Magyar nyelvű sajtóközlemény lent letölthető / press release can be downloaded below.
The research team was led by climate change mitigation expert Diana Ürge-Vorsatz, Director, 3CSEP, CEU/Professor, Department of Environmental Sciences and Policy, CEU, and her research team which included Professor Álmos Telegdy, Visiting Faculty, Department of Economics, CEU/Director, Labor Economics Research Group, Hungarian Academy of Sciences; and Sándor Fegyverneky, Chief Government Architect, Head of Department of Construction and Architecture, Ministry for National Economy; as well as other international economists and building experts. The study has examined several renovation scenarios with different levels of energy efficiency improvement and different amounts of buildings renovated per year. The study clearly demonstrates that the employment impacts of such a program are highly positive, especially for deep renovation scenarios. These assume energy efficiency improvements of 75-90%, which can realistically and mostly cost-effectively be achieved in virtually all Hungarian buildings through currently available know-how.
Up to 85% of Hungarian heating energy use, and the corresponding CO2 emissions, can be avoided by a consistent and wide-spread deep retrofit program that applies the principles of the passive house to Hungary’s public and residential buildings. A less efficient retrofit scenario applying suboptimal renovation levels achieving only around 40% efficiency improvement would lock in approximately 45% of 2010 building heating-related emissions – around 22% of 2010 total national emissions – by the middle of the century, jeopardising ambitious national emission reduction targets.
A deep retrofit program would also allow Hungary to significantly reduce its natural gas imports and therefore improve its energy security. By 2030, a deep renovation scenario could save up to 39% of annual natural gas imports, and up to 59% of natural gas import needs in January, the most critical month from the perspective of energy security. The suboptimal scenario, on the other hand, would save just over 10% of national natural gas imports, and the peak loads (January import needs) would be reduced merely to 18% (all savings as compared to 2006 – 2008 import figures).
By 2020, a large-scale, deep renovation program in Hungary could create up to 130,000 net new jobs (including the workforce losses in the energy supply sector), as opposed to approximately 43,000 in the suboptimal scenario. The peak figures for the creation of employment could happen in fact in 2015, when 184,000 new jobs are created in the most ambitious deep renovation scenario. Up to 38% of the estimated employment gains are due to the indirect effects on other sectors that supply the construction industry and the induced effects from the increased spending power of higher employment levels.
The study has also highlighted that building refurbishment activities are typically much more labor-intensive than other types of climate change mitigation and economic recovery activities. For instance, the forecasted direct employment impacts of deep renovations would be five times higher than those generated in Hungary by the same investment in transport infrastructural developments such as road construction.
While a wide-spread deep retrofit program would be costly (up to 4.5 billion euros per year in the initial phase of the program, in an ambitious scenario where 5.7% of the floor area, equivalent to 250,000 dwellings, per year would be renovated), the research has also found that redirecting the current energy subsidies and making wise use of available EU funds could potentially make available up to 1 billion euros per year, an amount that by itself practically covers during the first years of the program the full annual costs of renovating Hungarian buildings at a rate of 100,000 units per year. A portion of the investments could also be financed through a scheme where homeowners pay back a loan over time from the money saved due to their reduced energy consumption after the retrofit.
From a total cost perspective, a more gradual implementation (2.3% of the floor area, equivalent to 100,000 dwellings per year) of a deep renovation program is thought to be much more attractive. Such a program can create approximately 52,000 jobs by 2020, with a peak employment creation of 74,000 jobs in 2015. The length of the program ensures that the employment created is long-term; and new jobs are likely to be distributed throughout the country, as renovations are usually carried out by local small and medium enterprises.
According to the researchers, “there is the possibility in Hungary to unlock the potential for creating additional jobs while greatly reducing the energy costs of households and public buildings, Hungary’s record natural gas dependency and making further contributions to mitigating climate change”. The report concludes that high efficiency renovations create more jobs, save more energy, reduce more emissions and decrease to a larger extent the energy dependency of the nation.
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