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Europe's Green Building Boondoggle: Benefits By 2064

A report released yesterday by the European Court of Auditors exposed the European Union’s €5 billion boondoggle into increasing “energy efficiency” in public buildings.

Within the three countries that received most of the funds -- Italy, Lithuania, and the Czech Republic—the audit estimated that the time it would take for energy savings to compensate for project cost (the “payback period”) averaged a whopping 51 years. In reality, such benefits will never accrue because the renovations made will certainly be in dire need of repair and further renovation before then.

How is such inefficiency possible? Because governments receiving the funds spent them without concern for cost. The report states:

None of the audited countries had approved cost-optimal minimum energy performance requirements for buildings and building components, nor did they systematically collect data of the energy consumption profiles of existing buildings.

Although reading through some of the more outrageous payback periods (288-444 years in one case) is entertaining, such waste is not surprising. The public sector just doesn’t minimize costs as effectively as the private. And since national governments received the funds from the European Union (who collected them from the member states) instead of directly from their own citizens, there is an even greater accountability gap than normal between the public sector’s actions and the critical eye of the citizens.