Decarbonization debt and energy rents: On the limits of mobilizing private climate finance for housing decarbonization

Abstract

The conversion of the built environment for greater energy-efficiency and renewable energy consumption is a key facet of urban climate action. This paper focuses on residential building decarbonization in New York City to theorize how energy retrofits are shaped by existing property regimes and the financial capacity of buildings and their inhabitants. In New York City, one of the United States’ most robust real estate markets and home to one of the nation’s first mandatory building energy performance laws for existing buildings, a plethora of public and private financial mechanisms for energy retrofits are in use. Climate finance is delivered to building owners through a range of vehicles, including public and private debt, rebates, tax incentives, and energy service agreements – all meant to leverage private finance while stimulating the green economy. This approach effectively alienates property owners that do not have the financial capacity to access capital. Meanwhile, the drive to decarbonize and a lack of liquid capital leads other property owners to engage in contracts that enroll their buildings into novel rent payments on energy. The uneven application of a patchwork of climate financing mechanisms has impacts on the social relations of housing with implications for the geographies and politics of decarbonization in urban contexts.