Job Market Paper
Building Energy Performance Standards: Impacts on Building Energy Efficiency and GHG Emissions in Washington, DC
Summary
The accelerating urgency of climate change has prompted cities to implement performance-based energy policies aimed at reducing emissions from the built environment. This study evaluates the ex post causal impacts of Washington, DC’s Building Energy Performance Standards (BEPS), a first-of-its-kind U.S. policy mandating energy efficiency improvements in underperforming buildings. Using panel data from 2012–2023, the study investigates whether BEPS has generated measurable reductions in building energy use intensity (EUI) and greenhouse gas (GHG) emissions and how impacts vary across building ownership types. The findings reveal that BEPS led to significant improvements in energy efficiency and emissions performance, particularly among buildings with the largest pre-policy compliance gaps.
Data and Hypotheses
The analysis draws on building-level panel data from the District of Columbia Department of Energy and Environment (DOEE) Open Data portal covering 2012–2023. The dataset includes annual observations on site and source EUI, Energy Star scores, total and intensity-based GHG emissions, property type, size, and ownership. To operationalize policy exposure, a continuous treatment variable—the “compliance gap”—is constructed as the difference between each building’s pre-policy baseline and the applicable BEPS threshold. Three hypotheses guide the analysis:
- H1: BEPS adoption leads to significant reductions in building-level energy use and emissions.
- H2: Buildings with larger pre-policy performance shortfalls experience greater post-policy improvements.
- H3: Heterogeneous effects exist across ownership categories, with public buildings responding faster to compliance incentives than private ones.
Methodology
The empirical framework applies a continuous-treatment two-way fixed effects (TWFE) model to estimate causal effects of BEPS on energy and emissions outcomes. The key regressor is the interaction between the compliance gap and a post-policy indicator, capturing how buildings with greater pre-policy inefficiency respond once the standard becomes binding. Event-study models assess the parallel trends assumption and trace the dynamic impacts of BEPS over time. Robustness checks include alternative gap definitions (property-type mean, percentile, and citywide) and inverse probability weighting (IPW) to address potential attrition bias in the unbalanced panel.
Yit = β₀(Postt × Gapi,v) + αi + τt + εit
Results
The findings demonstrate that BEPS produced measurable improvements in both energy efficiency and GHG emissions outcomes. Buildings with larger pre-policy compliance gaps achieved greater reductions in energy use intensity and emissions intensity once BEPS became binding. Specifically, each additional unit of pre-policy gap reduced site and source EUI by 0.34 and 0.47 kWh/ft², respectively, raised Energy Star scores by 0.41 points, and lowered GHG emissions by 0.38 million KgCO₂e and 0.70 KgCO₂e/ft². Weighted estimates confirm these effects, with total emissions reductions of up to 0.57 million KgCO₂e per unit gap.
Table 4.1: BEPS Impacts Estimated with Property-Type Mean Compliance Gaps
| Site EUI (kWh/ft²) |
Source EUI (kWh/ft²) |
Energy Star Score | GHG Emissions (KgCO₂e) |
GHG Intensity (KgCO₂e/ft²) |
|
|---|---|---|---|---|---|
| A: Unweighted Estimates | -0.343*** (0.036) | -0.472*** (0.059) | 0.412*** (0.039) | -0.375*** (0.084) | -0.704*** (0.039) |
| Building FE | Yes | Yes | Yes | Yes | Yes |
| Year FE | Yes | Yes | Yes | Yes | Yes |
| Observations | 12,347 | 12,347 | 10,980 | 12,347 | 12,347 |
| R² (within) | 0.108 | 0.245 | 0.063 | 0.356 | 0.340 |
| B: IPW-Weighted Estimates | -0.323*** (0.038) | -0.459*** (0.063) | 0.415*** (0.040) | -0.566*** (0.063) | -0.728*** (0.035) |
Standard errors in parentheses. Significance: *** p < 0.01, ** p < 0.05, * p < 0.10.
Figure 1: Event-Study Plots of BEPS Impacts
Contribution
This study contributes to the literature on energy policy evaluation, urban decarbonization, and building energy economics by providing one of the first ex post causal analyses of BEPS. It applies a continuous-treatment TWFE framework, offering a scalable approach for evaluating policies with varying intensity. Disaggregating results by ownership type reveals public buildings achieving greater emissions reductions, while private buildings show sharper energy efficiency gains — highlighting BEPS as a model for equitable and performance-based climate policy.