Abating CO2 emissions in the building sector: the role of carbon pricing and regulations

This report assesses the efficiency of carbon pricing and regulation in the French residential sector both in terms of energy consumption reduction and distributive effects between tenants and landlords in collective or individual dwellings and social housing.

  • Res-­‐IRF, a hybrid energy-­‐economy modeling of the French residential sector over 2008/2050, is used to carry out the analysis through the design of two stylized scenarios differently implementing carbon pricing and a regulative tool embodied by an obligation of renovation in case of dwelling occupation change. o
  • Res-­‐IRF is designed to handle technological and behavioral specificities in the household sector. For this report, Res-­‐IRF has been recalibrated on statistics and econometrics results in order to represent realistic retrofitting patterns for each dwelling type and a realistic subsidization effect on the investment decision.

The report provides results concerning the dynamics in terms of energy consumption, intensity of heating infrastructure use, retrofitting patterns, building stock energy performance and costs burden related to retrofitting investment and energy bill.

  1. The two scenarios converge towards the same level of energy consumption. The scenario implementing an obligation of renovation improves the building stock energy performance through retrofitting more than the scenario with only carbon pricing. The “price signal” instrument is inefficient to trigger investments in case of split incentives (including the landlord-­‐tenant dilemma). Energy consumption reduction in the scenario with only carbon pricing is obtained through less intensive use of the heating infrastructure. It reduces the rebound effect but may increase fuel poverty among tenants.
  2. The scenario with only carbon pricing can bear more anti-­‐redistributive effects as tenants more contribute to the tax revenues, which may reduce its political feasibility.
  3. The energy consumption reduction of these two scenarios does not succeed in reaching the French official reduction target of 38% by 2020 compared to 2008 level. Given the high level of carbon tax in the scenario with only carbon pricing, leading to risks with regard to fuel poverty and anti-­‐redistributive effects, this suggests the necessity to implement an obligation of renovation in the policy mix.

Attachment: 

Citation: 

Nauleau, Marie-­Laure; Branger, Frédéric; Quirion, Philippe, 2014. Abating CO2 emissions in the building sector: the role of carbon pricing and regulations. CECILIA2050 WP2 Deliverable 2.5(1). Paris: Centre International de Recherche sur l’Environnement et le Développement (Cired). 

Funding: 

European Commission 

Authors: 

Marie-­‐Laure Nauleau (Cired), Frédéric Branger (Cired), Philippe Quirion (Cired)

Year of publication: 

2014

Number of pages: 

42

Table of contents: 

1

Executive summary

7

2

Introduction

8

3

An overview of the Res-IRF model.

10

3.1

Technological representation of the building stock.

10

3.2

Drivers of energy performance of the building stock.

12

3.3

Drivers of energy consumption: the rebound effect.

14

4

Calibration

15

4.1

Calibration data

16

4.2

Estimation of retrofitting rates (with subsidy) through statistical study

18

4.3

Estimation of retrofitting rates (without subsidy) through econometric estimation

18

4.4

Comparison of real data with Res-IRF outputs

19

5

Scenarios

22

6

Results.

24

6.1

Energy Consumption

24

6.2

Housing Stock

24

6.3

Intensity of energy use

27

6.4

Retrofitting

27

6.5

Costs

30

7

Conclusion.

33

8

References

35

9

Annex

37