@BPIE_eu@ClimateKIC

Building Policy Innovation ExchangeA presentation prepared by Mariangiola Fabbri, Jonathan Volt, Vivian Dorizas and Oliver Rapf – BPIE

December 2018

Presentation outline

1. Objectives

2. Background

3. Activities

4. Findings (output)

5. Further development

1.Objectives

Target group: cities and local authorities

Project objectives

Define innovative policy making for deep renovation

1

Explore ways to “harvest” successful

policy innovations for deep renovation

2

Design and develop a structured approach to replicate them and

scale up their implementation

3

Where does the BPIX path lead?

Shared understanding of what innovative policy for deep renovation is

Roadmap to policy innovation for deep renovation (including levers of change, features and process)

Empowerment of cities and local authorities with innovative approaches and ideas

2. Background

Background

❖The building sector causes the highest share of CO2 emissions in Europe

❖The cost-effective potential of deep renovation is proven, but the market remains subdued

❖Broad dissemination and replication of innovative policies is low

Challenges in the renovation market

• Not enough innovative policies for deep renovation in place or being developed

• Limited assistance and know-how regarding energy efficiency in buildings

• Limited exchange of experiences and expertise across borders

• Insufficient understanding of what constitutes a good renovation policy

• Shortage of information on how to design, implement, finance and evaluate innovative policies

3. Activities

The activities addressed -3 principal questions

• What is policy innovation in the context of building renovation?

• How to increase the occurrence and replicability of innovative policies?

• How can BPIX assist policymakers to create a favourable environment for policy innovation?

A three-step approach

1. Define policy innovation for building renovation

- Literature review

- Desktop research to define innovation in policy making and adapt it to renovation (output: briefing document)

2. Create a group of knowledge curators to support the innovation process

- Map innovative policies and programmes across the EU

- Identify innovative features of selected cases

- Conduct in-depth interviews with identified actors

3. Assess the feasibility and outline the main actions needed to scale up innovation

- Explorative workshop on how to scale up policy innovation

- Document findings and identified needs

- Outline of how BPIX can fulfil these needs

Detailed activities

1. LITERATURE REVIEW

2. CHARACTERISE KEY FEATURES OF

INNOVATIVE POLICY MAKING

3. MAP INNOVATIVE INITIATIVES

4. CREATE A MATRIX TO IDENTIFY INNOVATION

FEATURES

5. INTERVIEWS6. IDENTIFY LEVERS OF

CHANGE

7. EXPLORE APPROACHES TO

COLLECT KNOWLEDGE

8. ORGANISE WORKSHOP TO COLLECT

INPUT & ENGAGE POTENTIAL PARTNERS

Literature study

• 24 scientific reports

• Collection of the most recent knowledge on the topic of policy innovation

• Coupled with in-house expertise on the EU renovation market

• Chen, B. K., Bendle, N., Soman, D., & Behaviourally-informed, T. D. (2017). Policy by Design, (March).

• Clarke, A., & Craft, J. (2018). The twin faces of public sector design, (November 2017), 1–17.

https://doi.org/10.1111/gove.12342

• Coletti, P. (2013). Evidence for public policy design: How to learn from best practice. Evidence for Public

Policy Design: How to Learn from Best Practice. https://doi.org/10.1057/9781137291028

• Conliffe, A., Story, C., & Hsu, C. (2018). Exploring Policy Innovation: Tools, Techniques + Approaches.

Brookfield Inst. Retrieved from http://brookfieldinstitute.ca/wp-content/uploads/2018/05/BrookfieldInstitute-

PIP-Landscape.pdf

• Crowley, K., & Head, B. W. (2017). The enduring challenge of ‘ wicked problems ’: revisiting. Policy Sciences,

50(4), 539–547. https://doi.org/10.1007/s11077-017-9302-4

• E Sørensen. (2016). Enhancing policy innovation by redesigning representative democracy. Policy & Politics,

44(2), 447–448.

• Edler, J., & Fagerberg, J. (2017). Innovation policy : what , why , and how, 33(1), 2–23.

https://doi.org/10.1093/oxrep/grx001

• Eker, S., & Zimmermann, N. (2016). Using Textual Data in System Dynamics Model Conceptualization.

https://doi.org/10.3390/systems4030028

• Hildén, M., Jordan, A., & Rayner, T. (2014). Climate policy innovation: developing an evaluation perspective.

Environmental Politics, 23(5), 884–905. https://doi.org/10.1080/09644016.2014.924205

• Important, T. H. E. O., Is, T., & To, N. O. T. (2018). LET ’ S TALK ABOUT DESIGN DESIGN THINKING

FOR VERY NARROW BRIDGE . THING IS NOT TO BE.

• Jordan, A., & Huitema, D. (2014). Innovations in climate policy : conclusions and new directions.

Environmental Politics, 23(5), 906–925. https://doi.org/10.1080/09644016.2014.924209

• Jordan, A., & Huitema, D. (2014). Policy innovation in a changing climate: Sources, patterns and effects. Global

Environmental Change, 29, 387–394. https://doi.org/10.1016/j.gloenvcha.2014.09.005

• Jordan, A., & Huitema, D. (2014). Innovations in climate policy: the politics of invention, diffusion, and

evaluation. Environmental Politics, 23(5), 715–734. https://doi.org/10.1080/09644016.2014.923614

• Kalampokis, E., Hausenblas, M., & Tarabanis, K. (2011). Combining Social and Government Open Data for

Participatory Decision-Making, 36–47.

• Kimbell, L. (2015). Applying Design Approaches to Policy Making: Discovering Policy Lab.

• Lerum Boasson and Jørgen Wettestad. (2017). Policy Invention and Entrepreneurship: Bankrolling the Burying

of Carbon in the EU Elin (pp. 1–32).

• Loewenstein, G. (2017). Putting nudges in perspective, 26–53. https://doi.org/10.1017/bpp.2016.7

• Monafu, D., Chan, S., & Turnbull, S. (2018). experimentation just the latest policy.

• Quaggiotto, Giulio; Leurs, Bas; Christiansen, J. (2015). Towards an Experimental Culture in Government.

Retrieved from https://www.nesta.org.uk/blog/towards-an-experimental-culture-in-government-reflections-on-

and-from-practice/

• Rivera, D. (2018). Brookfield institute for innovation + entrepreneurship 1, 1–56.

• Skovgaard, J. (2018). Policy coherence and organizational cultures : Energy efficiency and greenhouse gas

reduction targets, (September 2015), 350–358. https://doi.org/10.1002/eet.1821

• Stenberg, L. B. & L. (2014). Innovation policy for transition towards Sustainable Renovation in Sweden,

(October).

• Upham, P., Kivimaa, P., & Mickwitz, P. (2014). Climate policy innovation : a sociotechnical transitions

perspective, (October), 37–41. https://doi.org/10.1080/09644016.2014.923632

• Watts, S. (2015). Policy Entrepreneurs and the role of Advanced Cognition in Policy Innovation, 01(01), 18–27.

REFERENCES

1. Finance: Innovative financial model - either how to finance the organisation or aninnovative solution for end-users

2. Governance: Innovative governance to reach a better service: either internal (e.g.cooperation between ministries) or external (e.g. collaboration between cities). It alsoincludes how to offer integrated services (such in a one-stop-shop)

3. Engagement: Innovative ways of involving stakeholders throughout the process4. Evaluation: Innovative ways of systematically retrieve information and use it to

evaluate the effectiveness of the model and improve it5. Communication: Innovative methods of how to gather support and reach the end-

users

Create a group of knowledge curators

• The mapping exercise covered over 50 initiatives across the EU. The initial list was refined based on the info collected during the project (desk research, interviews);

• 34 innovative projects were selected for further scrutiny – 25 of which were covered by 27 interviews (see following slides)

• The cases were mapped based on 5 innovative traits:

Inn

ova

tive

do

mai

ns

Mapping of innovative policies and programmes

• 34 innovative policies and programmes across the EU

• Most frequent innovation features: finance, governance and communication

• 27 interviews

• 14 countries

• 4 EU-wide initiatives

Knowledge curators workshop

• Stakeholders met in Brussels to discuss how to scale up policy innovation for renovation. Participants represented a wide range of organisations (i.e. manufacturers, NGOs, trade associations, city associations, universities, etc.)

• Used open innovation techniques

• The discussion confirmed the findings from the literature study and the interviews, while suggesting options for the further development of BPIX in support of policy entrepreneurs

4. Findings

What is policy innovation for renovation?

Policy innovation for building renovation is a new policy, regulation, support scheme, programme or service that intends to increase the renovation rate(number of renovations undertaken) and/or renovation depth (magnitude of the energy saved).

The policy can be either small and incremental or large and radical, but it should involve the realisation of ideas, processes and practices that break with the past.D

EFIN

ITIO

N

Traditional policy process –Little room for innovation

Source: Brookfield Institute, 2018

The main drivers of policy innovation

Competition

Leadership1. Political leadership to nurture and promote (push forward) an idea

2. Competition among policy-makers encourages the exploration for new ideas. Competition among cities is often a driver for action

3. Collaboration to exchange views and learn, as well as to gather support (early involvement of stakeholders favours support and perceived “ownership” of the policy outcome)

Innovative policy, what art thou?

• Truly innovative policies are rare

• Innovation generally occurs through (i) incremental improvements, or (ii) replication of an existing policy from another region

• Innovative features include:

✓ new ways to engage w/public (user-centeredapproach, early testing (iterative prototyping)

✓ new evaluation methods (behavioural science, smart data)

✓ new ways of governance to reach better services

✓ new communication tactics

✓ new financing (OBF, EPC, social finance, crowdfunding, etc.)

Policy innovation: key actors

For policies to be successful they must be skillfully packaged and accessibleto the right people (policy entrepreneurs and decision-makers) at the right time (window of opportunity)

Tortoise : dedicated to prep work (e.g. civil servants, NGOs) Carpe Diem: sets the agenda, steers, motivate

Two types of actors to be identified:

Tortoise : dedicated to preparatory work (e.g. civil servants, universities, think tanks, NGOs etc.) Carpe Diem: set the agenda, steer, motivate (policy-makers, business leaders etc.)

Ingredients of success for innovative policies

Stimulation

Acceleration

EngagementFinance

EvaluationInnovative

Policy Creation

• Different from the “innovative traits” (slide 16), which are components of a policy/programme

• The 5 “ingredients” describe key elements of the policy development process

• The subsequent slides collect key findings related to each of the 5 ingredients

Ingredients of success for innovative policies

Stimulation

• City commitment and clear targets (e.g. GHG target, climate resilience target, etc. – e.g. ProjectZero)

• Political leadership and dedication: policies must be promoted, nurtured and safeguarded

• Replication of an existing idea: successful policies/programmes tend to inspire others (even beyond national borders – e.g. Energiesprong or KfW renovation programme)

• Need to address a specific problem (such as fire safety, indoor air quality or mouldy buildings, e.g. schools/hospitals)

• Financial opportunities (e.g. new budget line, new funds available, etc.)

Ingredients of success for innovative policies

Acceleration

• Accessible funding (e.g. FP7, H2020, ETS) is a key enabler and accelerator

• Political and stakeholder support is often required to materialise the idea (e.g. iSFP)

• Strong community support: trust in the people promoting change and in the service offered (e.g. Project Zero)

• Network of social entrepreneurs to support ideas & potential fundraising (e.g. P2E)

• Opportunity to collaborate with other actors to achieve change (e.g. advocate to amend regulations hampering innovation- see Energiesprong or OSER)

Ingredients of success for innovative policies

Engagement

• Establish new relations within the cities (departments, social actors, business community) and with other municipalities (e.g. OSER, Picardie, BEREEL!) to exchange experience and build alliances

• Early engage those who will benefit from the new policy (including residents and local population) to get their input, ensure a proper design and gain social acceptance (see ENERGISE project)

• Promote exchange and feedback (what works/what needs to improve/what went wrong) within the city (e.g. CITYZEN) and with other cities

Ingredients of success for innovative policies

Finance

• Access to new sources of funds (Picardie, NZU)

• Creation of new actors/entity (e.g. use ESCO model to create a public entity allowing longer pay-back time – SPL OSER, RenoWatt)

• Blending of funds (such as ERDF, ELENA etc.) to optimise the renovation offer in terms of grants and advantageous loans (KREDEX, SuperHomes etc.), or to make EPC financing viable

• Simplification of financial procedures (as done in some one-stop-shops)

Ingredients of success for innovative policies

Evaluation

• Structured and regular evaluation is necessary from a learning perspective – allows improvement of the model (P2E, iSFP)

• Set initial goals and regularly monitor and assess results (e.g. after 1, 3 and 5 years)

• Open feedback from users/stakeholders (Amsterdam, BEBO-network)

Examples of innovative policies

• 4 case studies presented, featuring different ingredients• Case selection is not based on the impact of the project (an

evaluation of each case was not in the scope of this project)• The presence of innovative features doesn't mean the project is

successful, as it depends on the effectiveness of its design andimplementation

• The pictograms illustrate the status of the policy implementation(1 green bar – demonstration phase, 5 green bars – fullyimplemented)

Identified problems, which the policy/programme isdesigned to address

Key enablers (such as financial means, existence of agood idea etc.)

Innovative featuresDEF

INIT

ION

S

Case study 1: Energy Leap in London

• 80% of London’s emissions come from fossil fuel for power and heating of buildings

• Fuel poverty is a major challenge for the city

• Lack of skilled workers within the construction sector

• Commitment: London has a target to become a zero-carbon city by 2050

• Financial means: accessible public money & research projects

• Existing idea: Energiesprong• Groundwork: Market

Transformation Study proved the feasibility of the model

• Introducing premanufactured net-zero renovations

• EPC long-term finance model –guaranteed performance

• Minimise time on-site (reduce hassle for occupants)

• New procurement procedures

Status of implementation

As part of the Energy for Londonersprogramme, the Energy Leap project is aimingto replicate the Dutch Energiesprong modeland introduce industrial net-zero renovationsas a solution to the city’s social housingdecarbonisation challenge. The MarketTransformation Study describes the challenges

of replicating a complex renovation model,such as different regulations, subsidies,building typologies, stakeholder needs, andsetting up a new value chain. The first pilotprojects are currently underway, and, ifsuccessful, the city hopes they will lead to aroll out on a significantly greater scale

Case study 2: Passeport Efficacité Energétique

• By 2025, all class F and G buildings must be renovated

• Lack of awareness of the benefits of energy renovations

• Need to increase effectiveness of investments

• Commitment: French target of renovating 500k homes p.a.

• Financial means: consortium of financially strong service providers and private companies

• Existing idea: building passport (in Germany)

• Introducing a Building Renovation Passport, with automated calculations

• Developed in close cooperation with local authorities (regions), craftsmen and stakeholders

• Pilot testing: feedback loop approach – continuously improving

Status of implementation

The concept for the Passeport Efficacité Énergétique(P2E) was developed by the Shift Project togetherwith a group of building specialists and professionals.The objective was to unlock the deep renovation ofresidential buildings in France. The passport providesa set of solutions (“performance combinations”),based on the combination of simulations establishedaccording to specific features like building type, age,

Climate etc., that would allow to reach a low-energy building (BBC). P2E adopts a pragmaticapproach to maximise the opportunities to triggerenergy renovations every time maintenance work isdone in a building. The passport is currently inPhase 3-testing, where it is being applied andtested on local authorities.

Case study 3: SOCIETE PUBLIQUE LOCAL “OSER”

• Climate targets and public buildings to lead by example

• Capability and capacity of smaller municipalities to carry out complex renovation projects is limited

• Health problems linked to indoor environment in public buildings (esp. schools)

• Collaboration among public authorities

• Concrete solution designed based on a specific problem (governance and capacity)

• The region influenced national legislation related to fiscal and organisational issues – which enabled the solution

• Pools skill and resources of local authorities

• Creation of a new legal entity to be able to aggregate projects and enable renovation in rural areas

• New form of third party investment (public ESCO to enable long-term payback periods)

Status of implementation

The French region of Rhône-Alpes and some localauthorities in the region decided to set up a RegionalEnergy Services Operator (OSER), in order to enablecomprehensive renovations of public buildings. The groupopted for the legal entity “Société Publique Locale” (SPL)– to manage their renovation intents. SPL OSER carriesout the renovation works, facilitates third partyfinancing, while offering financial, legal and technical

assistance to the municipalities. It pools resources fromthe local authorities and creates synergies between therenovation projects. The Region Rhône Alpes was,together with other French regions, successful inlobbying the national government to adopt the nationallegislation regarding local public companies. SPL OSERhas so far conducted 19 deep renovations of schoolbuildings, with additional projects in the pipeline.

Case study 4: Nová zelená úsporám

• Carbon intensive economy• High share of pre-fabricated

buildings --> huge energy saving potential

• Air pollution and health problems linked to buildings

• Financial means: Carbon credit surplus

• Demand for energy efficiency measures

• Showcase of KfW in Germany • Expert report outlining the

many benefits – energy, jobs, health etc.

• Subsidy for renovation• Incentivises deep renovation• Collaboration with commercial

banks to offer favourable interest rates

• Continuous evaluation to adjust programme during implementation

Status of implementation

Nová Zelená Úsporám (English: New Green Savings), is aCzech renovation programme started in 2009. The aim ofthe programme is to achieve energy savings in buildings(residential and public), while stimulating the Czecheconomy. The programme was inspired by the GermanKfW and incentivises more comprehensive renovationsthrough increased subsidies for bigger energy savings.The programme was cancelled one year after the firstimplementation, due to the inability to process the high

number of applications accepted. The programme wassoon relaunched, and redesigned in 2013 and again in2014. Improvements include support level, bettercalculations, and simplified and shortened administration.Most importantly, the programme was confirmed in thelong term, providing stable market conditions andallowing owners to plan their renovation. Nová ZelenáÚsporám is the most successful renovation programme inthe country. It distributed around €80 M in 2018.

5. Further development

BPIX further development

• Several needs were identified during the project:

• Increase awareness and exchange about policies/programmes in other regions

• Increase local capacity to conduct research and learn from others (e.g. time and language barriers)

• Systematic monitoring and evaluation of policies and programmes is rare

• Fragmented governance, including different (sometimes even contradictory) goals and budgets

BPIX further development

• How could BPIX contribute to overcome these needs?

• Create a virtual collaboration and resource space:

• The majority of respondents were in favour of a web-based solution

• Couple web-platform with other tools/initiatives including:

• Face-to-face community exchange: a real space for local communities where policy makers and civil servants can share experience, find guidance and information, etc.

• Face-to-face experience facilitating exchange across regions and countries (i.e. workshops, training centres, on-site visits, etc.)

• Promotion by reliable ambassadors

BPIX further development

• What should the web-platform contain:

• A clear concept description of the policies

• Technical data (savings, measures, etc.)

• Financial information (type amount of available funds, blending and aggregation opportunities)

• Inspirational cases/storylines

• Guidebook/guidelines of how to implement a new policy

• Information on potential EU funds and support

• Contact details of person/entity responsible for the policy

Acknowledgements

• 7Vents

• Agency for sustainability & innovation

• Amsterdam SmartCity

• Auvergne Rhône-Alpes

• Cartif

• City of Helsinki

• DOReMI

• Energy Cities

• Energy Saving Trust (EST)

• IFEU

• Global New Energy GNE finance

• Greater London Authority

• GRELiege

• KFast

• LandeshauptstadtInnsbruck

• Ministry of Environment – Czech Republic

• Municipality of Bolzano

• NUIG

• REGEN

• Regional Council Hautsde France

• Research Institutes of Sweden

• Stad Mechelen

• Shift Project & P2E

• Sweden’s agency for innovation under the Ministry of Innovation and Enterprise

• Tipperary Energy

• VEA

BPIE would like to acknowledge the contribution to this presentation by the following organisations:

Thank you…

www.bpie.eu

@BPIE_eu@ClimateKIC

Mariangiola Fabbri,

Senior Project Manager

Mariangiola.fabbri@bpie.eu