Essays on the Economics of Energy and Urban Policies
The issues that come along with energy use and urbanisation are ever-changing. Policymakers therefore implement novel policy responses of which their effectiveness and consequences are not yet clear. However, policy interventions affect us all in our daily life and can greatly influence our wellbeing. It is thus of the utmost importance to acquire information through experience in order to improve policymaking. This dissertation provides such policy analyses for popular approaches, namely the introduction or tightening of requirements, rolling out subsidies and levying taxes.
The first chapter investigates market responses such as changes in mortgage rates and house prices to the imposition of additional capital requirements on banks depending on the size of their mortgage portfolio. Meeting the capital requirements is costly for banks and the results show that they transfer the additional costs to potential borrowers by increasing mortgage rates and this in turn decreases house prices. The second chapter assesses the effectiveness of a subsidy program that aims to increase the overall energy efficiency of the housing stock and finds that agency issues, imperfect information and self-selection undermines the success of the program. The third chapter again analyzes the effects of requirements, but turns to requirements related to energy efficiency for newly built housing units. The results show that households shift from newly built to existing houses because the requirements discourage construction as they change the differential cost between new and existing constructions in favor of the latter. However, the effectiveness of the building energy code critically depends on the amount of newly constructed buildings, which means the observed shift threatens the policy response's ability to reduce energy use. The final chapter examines the effect of a vacant land tax on new development and finds that both construction and plots of land sales increase because of the tax.