Retrofit Poverty: Socioeconomic Spatial Disparities in Retrofit Subsidies Uptake

Framed in the concept of distributional justice, retrofit poverty may be understood as the inequality of opportunity to improve the energy performance of the home. Retrofitting existing homes may have substantial carbon-mitigation and cost-saving potential. Retrofit subsidies may increase energy improvement activities, raise awareness and lever market offers. However, there is concern about inequitable outcomes. This quantitative study used publicly available data sets to explore the socioeconomic and spatial distribution of the outputs of a market-based, white certificate programme for residential energy-efficiency improvements in the state of Victoria, Australia, between 2009 and 2017. Certificates signified avoided carbon emissions as a proxy for energy cost savings. Regression analyses combined data of certificate generation with socioeconomic indices, dwelling numbers and tenure characteristics at the postcode level. Areas with lower economic resources and higher shares of rented dwellings were statistically significantly associated with lower certificate generation intensity. As low-income households and renters feature highly in metrics of energy stress, the uneven distribution of benefits suggests that a utilitarian distributive subsidy approach may be regressive and (re)produce energy inequalities. A better understanding of the contexts, compositions and mechanisms that characterise retrofits is needed to develop socially equalising and effective policy tools.

Policy relevance

This paper addresses the distributive justice implications of residential energy-efficiency subsidies in Victoria, Australia. The relationships between white certificate generation intensities and variables that have been associated with energy hardship revealed inequities in the distribution of benefits. Lower outcomes in subsidy benefits in areas with low economic resources and high percentages of rented properties suggest that non-targeted financial incentives may be regressive and (re)produce energy inequalities. However, the data also suggest that the subsidy programme may have triggered a social normalisation of residential retrofit activities. Revealing retrofit scheme participation as a multidimensional issue with monetary, social and structural indicators, the study highlights that policies addressing the social impacts of low-carbon transitions must look to retrofit opportunity (dis)advantage. A restorative justice approach points to tailored retrofit-enabling schemes targeted at enhancing capabilities of vulnerable households, which may include targets for financially disadvantaged groups and setting minimum rental housing standards.