You can spend money to make houses more energy-efficient. For example, as Don points out, you’re better off burning natural gas in your own furnace rather than having it burnt at a central powerplant. Other examples are better insulated windows and programmable thermostats.

These investments quickly pay for themselves in lowered energy bills, so homeowners have a strong financial incentive to make the investment. Owners of rental housing have no financial incentive: if your tenant pays the energy bill, who cares how big it is?

This is bad for the environment because simple energy-reduction measures don’t get implemented. It’s bad for society because it makes housing less affordable.

Nudge implies that better reporting might be a solution. When a renter is shopping around for a house now, they often ask “what’s the average utility price?” Unprepared landlords will make something up off the top of their head. This could be fixed in two ways:

• BC Hydro could put power usage statistics for every house up on the web
• Landlords could be legally required to provide accurate utility fees in person

The idea is that if tenants had accurate information, the demand for high-energy houses would drop and the rent would follow. However, in a near-zero vacancy situation like Victoria and Vancouver, the market has failed and the price signals are broken.

BC Hydro currently offers modest subsidies for energy refits. They’re obviously not enough: $30 doesn’t cover the cost of 1 programmable thermostat, never mind 5. (If I did, I would install one without asking my landlord.) Although the subsidies benefit homeowners first (so perhaps they should be offset by higher taxes?), increasing them would go toward making housing more affordable.