Policies for low-carbon and affordable home heating: A French outlook

Louis-Gaëtan Giraudet (), Cyril Bourgeois and Philippe Quirion
Additional contact information
Louis-Gaëtan Giraudet: CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: Energy demand for residential heating is targeted in France by a number of subsidy programmes (tax credits, zero-interest loans, reduced VAT, white certificates and the carbon tax. We assess the cost-effectiveness and distributional impacts of these policies using Res-IRF, an energy-economy model that integrates relevant economic, behavioural and technological processes. We find that, without further specification of revenue recycling, the carbon tax is the most effective, yet most regressive, policy. Subsidy programmes save energy at a cost of €0.05-0.08 per lifetime discounted kilowatt-hour, or €300-800/tCO2-eq; one euro of public money spent on subsidy programmes induces €1.0-1.4 private investment in home energy retrofits. Targeting subsidies towards low-income households, who tend to live in energy inefficient dwellings, increases leverage, thus reconciling economic efficiency and equity. The public cost of subsidies – €3 billion in 2013 – is outweighed by carbon tax proceeds from 2025 onwards, were the tax rate to grow as initially planned by the government. Meeting the long-term energy saving targets set by the government however requires adjusting subsidy programmes to better address rental housing. Lastly, an order-of-magnitude discrepancy between simulated and observed numbers of zero-interest loans points to economic and psychological barriers that require further investigation.

Keywords: residential buildings; space heating; energy-economy modelling; energy efficiency subsidies; carbon tax; fuel poverty; White certificate obligations; Zero-interest rate loans (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-01890642v2
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Energy Policy, inPress, ⟨10.1016/j.enpol.2021.112140⟩

Downloads: (external link)
https://hal.science/hal-01890642v2/document (application/pdf)

Related works:
Journal Article: Policies for low-carbon and affordable home heating: A French outlook (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01890642

DOI: 10.1016/j.enpol.2021.112140

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().