Paper short abstract:

EU directives require cost-benefit analysis of energy efficiency as a means to create material ‘things’ on the basis of their potential status as ‘assets’. Indeterminacy in the way such assets are valued lead to significant differences in what things states identify as worth trying to create.

Paper long abstract:

The European Commission has championed the financialisation of governance processes across Member States (MSs), including through the use of Cost-Benefit Analysis (CBA). In this paper I examine two EU directives both of which stipulate the use of CBA to identify optimal levels of energy efficiency technology deployment. MSs are required to analyse these technologies as hypothetical assets: they are to be evaluated on the basis of time-discounted flows of net benefit (principally energy saving) they would create if they existed. Where this 'socioeconomic' value is found to exceed that of the 'business-as-usual' counterfactual, MSs are required to take action to close this gap (by adopting policies to increase deployment of the relevant technologies). The directives thus seek to achieve the creation of material things out of their hypothetical status as assets. I examine how three states (UK, Denmark and Germany) have responded to these directives, highlighting significant differences in how the instruction to use CBA was interpreted. Drawing on the 'finitist' sociology of knowledge, I argue these differences illustrate the tenuous institutionalisation of relevant concepts such as 'cost to society' or 'cost-optimal'. Whereas the intention of the directives is to transcend MSs hitherto variable approaches to energy efficiency by imposing universal cost/benefit principles, in practice the indeterminacy of the required processes of valuation means the space for variation is still held open. I discuss the scope for different interests to rationalise their preferred policy outcomes by selecting different ways of construing things as assets.