Do more efficient buildings lead to lower household energy consumption for cooling? Evidence from Guangzhou, China

Over the last decade, residential energy consumption has become a major contributor to global energy use and carbon emissions, and its contributions, especially in developing regions, are accelerating more rapidly than those of the industrial sector. The energy efficiency of the building stock has shown great potential for reducing household energy consumption through advanced measures on the envelopes of buildings, such as the use of advanced construction materials and improvements in building structures. Thus, policies have been implemented to improve energy efficiency and reduce carbon emissions from buildings. This paper analyses survey data from Guangzhou, a megacity with a subtropical climate in South China, to estimate the effects of energy efficiency on the energy consumption of residential buildings. We apply an econometric approach to examine the effects of energy efficiency, and we employ instrumental variables to address problems of endogeneity. The results show that greener buildings, in terms of advanced building materials and structures oriented towards high energy efficiency, reduce the carbon footprints of households. Additionally, households with low income levels and those with environmentally friendly energy consumption behaviour are likely to benefit from living in energy efficient buildings more than other households. Finally, suggestions on ways to improve energy policy and methods to reduce household energy consumption and carbon (CO2) emissions are presented.