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The Energy Efficiency and Health Nexus: Putting a Value on Health Benefits from Increasing Total Energy Efficiency

Karen Glitman -

Energy efficiency and renewable energy program administrators understand that when buildings are made more energy efficient, occupant health improves. And when vehicles—particularly diesel-powered school and transit buses—are electrified, benefits extend to both vehicle occupants and those living and working in proximity to their emissions. When the energy used to provide motive power comes from renewable electricity or human powered modes of transport rather than from fossil fuel use, the health benefits are dramatic. Vermont Energy Investment Corporation (VEIC) is exploring the health benefits of electrified transport, weatherization work, and other thermal and electric energy efficiency upgrades across all sectors.

The electric, thermal, transportation efficiency and renewable work VEIC does in collaboration with partners provides immediate and long term health benefits for all. And, when energy efficiency work reaches marginalized communities, the health benefits may be even more significant given that these communities suffer far greater health disparities.

With the “fierce urgency of now,” VEIC recognizes that the benefits of energy creation and use in our buildings and transportation must be equitably distributed to all, and not disproportionately harm one community over another. This concept of “Distributional Justice” is one of the three pillars of Energy Justice, which directly links VEIC’s work to some of the key financial and health challenges and burdens acutely felt by vulnerable populations.

VEIC recognizes that looking at our work through a health lens requires us to expand our goals and identify partners to achieve greater impacts on the overall health of our communities. Jurisdictions around the world have adopted Health in All Policies (HiAP) frameworks, including Washington, DC and Vermont. HiAP is an inter-sectoral approach that provides a framework for collective impact by connecting existing resources. VEIC is particularly interested in the opportunity to leverage resources from the health and energy efficiency sectors.

Quantifying and monetizing the benefits of health could enable both the energy and health sectors to more rapidly meet their mutual goals. If energy regulators agree on the value of the health benefits, and if health regulators can agree on the value of energy efficiency, health and energy sectors can be linked in new, innovative, and mutually productive ways, thereby amplifying the sector’s respective impacts in the market.

Health benefits are sometimes acknowledged at a de minimis level in the electric and gas regulatory frameworks that determine the cost-effectiveness of efficiency programs and what programs can pay for. Proper valuation of health benefits associated with total energy efficiency work, in collaboration with regulators and market actors, will provide resources to reduce health costs and move more rapidly to a just, equitable clean energy economy. This partnership is akin to the philosophy that created Energy Efficiency Utilities (EEUs), a model that has delivered savings for all ratepayers by reducing system-wide costs and providing individual ratepayers (residential, industrial, and commercial) with direct bill savings. Likewise, connecting the health benefits of the energy efficiency work to the healthcare system’s costs would result in both system-wide and individual savings.

For instance, the monetized value of weatherizing a low-income home in Massachusetts is nearly $1,400 in annual savings thanks to improved health outcomes. For each mile of fossil-fuel powered travel eliminated, a conservative estimate of health savings is $0.06. While seemingly small, this figure results in $808 savings annually when multiplied by the average miles traveled (13,476). The American Lung Association reports that the health costs of smog, soot, and climate pollution caused by light duty fossil fuel vehicles in Vermont is $347 million per year. The health costs of medium and heavy duty vehicles are likely greater, especially when considering diesel-powered transit, school buses, and freight vehicles.

Collective impact will result from leveraging energy efficiency programs to improve health outcomes, while leveraging health expenditures with energy efficiency programs to reduce health costs. Combined, these efforts could generate economic development and jobs, strengthen the financial resiliency of our communities, and improve the lives of our most vulnerable neighbors. Importantly, this will occur while helping vulnerable populations attain clean, efficient, and affordable “total” energy to meet basic daily needs (electricity, space heating and cooling, and transportation).

As VEIC looks ahead to our next five years with a focus on Energy Justice and Greenhouse gas reduction, we recognize that the “why” of our work is directly linked to human health. This new frame of considering community health underscores the health impacts of our current energy system:

  • Morbidity from indoor air quality
  • Morbidity from outdoor air quality
  • Morbidity from lack of access to preventive health services (transport)
  • Morbidity from sedentary lifestyle (lack of sidewalks, transit, bike paths, recreation)
  • Lost productivity
  • Lost economic opportunity

The shift to quantifying and monetizing health benefits associated with our work is an important step. The potential for collective impact through this cross-cutting initiative is high. VEIC will work with state agencies across sectors to design and systematize data, developing an integrated service delivery model that can form the basis of future initiatives. Critically, energy efficiency program administrators and the public health sectors will develop metrics and objectives to measure improved outcomes for identified needs (e.g., healthy supportive housing, improved mobility options).

There are three main health related activities VEIC is presently engaged in:

  • Quantifying the health benefits of reduced electric generation
  • Quantifying the health impact of transportation emissions
  • Quantifying and reducing the health impacts of construction practices

As VEIC delves deeper into these issues, it is vital to form and strengthen strategic partnerships with organizations and agencies whose primary focus is health. Partnerships will help all connect the electric, thermal, and transportation energy efficiency and renewable sectors with the health sector in meaningful ways. By sharing perspectives and activities, our sectors can deepen impacts and reach, leading to improved outcomes for all.

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