A Probabilistic Framework for Stranding Risk Assessment and EPBD IV Scenario Analysis for the Italian Building Stock

The building sector is a major contributor to global GHG emissions, constituting an essential player in national and global decarbonization strategies. In this framework, governments have started requiring higher building energy performances to reduce emissions, with the new European Energy Performance of Buildings Directive (EPBD) representing a further step in this direction. Such requirements could be enforced at a large scale with specific penalties for the property owners, such as the stranding of non-compliant assets, making them not rentable or marketable until requirements are met. A few countries have already applied these measures but with a limited extent and effective implications compared to the decarbonization goals. Thus, while the consequent impact is potentially considerable given that a significant share of existing buildings would be stranded, a high uncertainty characterizes its assessment, calling for a probabilistic approach. However, no probabilistic methods have been formulated for stranding risk. This paper critically reviews the state-of-the-art approaches for stranding assessment of buildings. A probabilistic framework based on methodologies derived from natcat risk assessment is also presented. A scenario-based analysis is carried out on the Italian building stock and compared to the impact of natural hazards. Results reveal that stranding risk can be relatively significant in terms of expected monetary losses. The categorization of this risk as sustainability-induced ‘‘creative destruction’’ is also discussed. The findings provide insights into which policies would be required to implement decarbonization pathways for the building stock while underlining how energy retrofit design can adapt to mitigate stranding risk