The actual problem is an economic problem. I’m not sure if it qualifies as “tragedy of the commons” or another paradox.
Builders don’t benefit from tankless heaters, because they cost more to install. Since sale prices for a house with a tankless will not rise proportionally (sale price is a function of square footage, how it looks, and of course location), the builder gets no benefit.
Once the house is built, a long-term homeowner would benefit from a tankless - except that it’s very expensive to upgrade the wiring or the gas lines after the fact.
Anyone who is renting similarly won’t benefit - the higher cost of the house/apartment will mean the rent has to be higher, and most renters pay their own utilities. Thus, it is beneficial to the landlord to install the cheapest, least efficient appliances available.
Long story short, the only nationwide fix requires government intervention. The government has to say “minimum water heating efficiency is <x>”, and to raise the standards year after year. Eventually, only tanked heaters with ridiculously thick insulation or tankless would meet the standards.
Obviously, the government is no panacea either. Politics means that the government can only enact a limited number of unpopular measures. It costs political “currency” to do something unpopular, and there are more cost-effective things to spend that currency on. For instance, rather than requiring tankless water heaters, which only provide a 30% benefit, the government is trying to make us all go to compact fluorescent/LED lighting, which is more like a 500% benefit in energy consumption. And you’ve seen all the howling that has caused.
The other fix is “green building standards”. People may pay more for homes that have been certified to be hugely more energy efficient, which requires a bunch of changes and upgrades.
This similar paradox, I think, applies to a raft of home-building technologies that cost more up front but probably save money in the long run. Everything from roofing nails that don’t rip loose in a hurricane (cost a few pennies more but may save your roof…eventually) to using higher strength materials than wood/brick for the siding to the high end foam insulation is subject to the same paradox.
To add insult to injury, some of the measures that prevent catastrophic damage will actually raise your insurance rates because it increases the base cost of the house. If you design your house to be able to survive a flood, you flood insurance won’t be cheaper, usually. Similar to that tornado-resistant roofing and other countermeasures.
