Decarbonizing the residential sector

At this moment, the decarbonization of the economy is going too slow to keep the global temperature increase below 2°C. The residential sector is no exception. Residential energy consumption per capita decreased by merely 6.5% in the EU over the course from 2000 to 2016. Completely decarbonizing the residential sector by 2050 will require a faster reduction in energy consumption, electrification and switch to renewables. This research project aims to support the process of decarbonizing the residential sector by applying state-of-the-art methods from program evaluation and empirical industrial organization to exceptional rich data at the micro-level in order to identify market failures that hinder this process and evaluate the cost-effectiveness of energy-efficiency policies. These include some of the most widely used policies, e.g. minimum efficiency requirements for new development, as well as policies that have not yet been introduced or only in a few countries such as a carbon tax and minimum efficiency requirements in the rental market. The results from this project will allow policymakers to see how much these policies reduce energy consumption and at what cost. Moreover, it will show how this cost is distributed across the income distribution. Policymakers will therefore not only be able to compare the cost-effectiveness of the different energy-efficiency policies but they will also be able to decide whether or not they should be combined with distributional policies.