A study published in Environmental Research Letters shows that spiking energy prices preceded every major recession in the past half-century.
We’ve written here before about how energy-efficient homes support both environmental sustainability as well as the financial sustainability of the households that occupy those buildings. Simply put, lower ongoing energy costs are good for family budgets and ongoing financial health.
But can the same notion be extrapolated to the scale of the national economy? Can energy efficiency help us avoid nationwide economic crisis?
King tracked the “Energy Intensity Ratio” (EIR) of oil, natural gas, and coal and mapped it against periods of economic prosperity and recession. (EIR measures the value that energy offers consumers.) What King found is that energy prices spiked (or, more accurately, EIR fell) before every major recession in recent memory. Merchant quotes King’s reflections on what conclusions can be drawn from the most recent downturn:
“The real estate bubble burst because individuals were forced to pay a higher and higher percentage of their income for energy — including electricity, gasoline and heating oil — leaving less money for their mortgages.”
We know that greenbuilding measures like Passive House and home performance retrofits benefit the environment, household comfort, and ongoing household finances. But by minimizing the impact of spikes in energy costs, maybe energy efficient homes will also help shore up our economy against potential crashes in the future.
– Zack (Connect with me at +ZacharySemke)Back to Field Notes