Optimization of energy efficiency renovations in buildings: Unlocking multiple benefits across environmental, economic, and social dimensions

Peer-reviewed paper 7-100-26

Residential renovation policy is still too often assessed through narrow cost-efficiency and operational-energy metrics, despite growing pressure on governments to deliver decarbonization, affordability, resilience and social justice at the same time. This paper asks what is gained – and what is lost – when public renovation programs are designed around different policy rationales rather than around a single economic-efficiency criterion. Using the Portuguese residential stock as a case study, it combines Hybrid Rectangular Input–Output Lifecycle Assessment, building energy simulation and multi-objective optimization to evaluate renovation portfolios across 60 residential archetypes under realistic budgetary, technical and regulatory constraints. The analysis compares portfolios through total primary energy savings, greenhouse-gas payback time, savings-to-investment ratio and health impacts, while also examining broader societal effects. The results show that the trade-offs are structural. Portfolios that maximize stock transformation, Zero-Emission Buildings uptake and aggregate co-benefits do not maximize economic efficiency per euro invested, whereas high-return portfolios remain too limited in scale to support broad decarbonization of the housing stock. Balanced portfolios emerge as more credible program compromises, retaining substantial benefits while avoiding the steep efficiency losses of the most expansive options. The results also show that high energy and climate performance do not automatically imply better societal outcomes, since some high-ZEB pathways perform poorly in health terms due to PM2.5-related effects associated with biomass uptake. The paper therefore argues that renovation policy should move beyond cost-efficiency alone and adopt multi-criteria, climate-sensitive and health-aware program design.