Estimating Residential ESG Preferences

Abstract

Residential energy consumption plays a significant role in climate change, contributing 9.1% of the U.S. CO2 emissions. Renovating owner-occupied homes is essential for addressing this issue, yet progress in retrofitting remains unchanged. Literary analysis poses three possible channels for the lack of uptick in adoption of green retrofits: financial constraints, lack of awareness, or sustainable preferences. In practice, these elements are not easily separated from each other. This vignette study investigates whether sustainable preferences are the barrier to adoption by controlling for awareness and cost constraints. To control, survey participants are given a list of viable renovations and each renovations effect on cost, emissions, and resident well-being. By using a discounted cash flow to create monthly cost adjustments, we are removing the upfront costs of renovating which alleviates cost concerns. The results of the survey of over 100 people from 37 different states show that homeowners prioritize repairs and quality of life over environmental or social concerns.