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Carbon Pricing and Complementary Policies—Consistency of the Policy Mix for Decarbonizing Buildings in Germany

Sibylle Braungardt (), Veit Bürger () and Benjamin Köhler ()
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Sibylle Braungardt: Oeko-Institut, Merzhauser Str. 173, 79100 Freiburg, Germany
Veit Bürger: Oeko-Institut, Merzhauser Str. 173, 79100 Freiburg, Germany
Benjamin Köhler: Oeko-Institut, Merzhauser Str. 173, 79100 Freiburg, Germany

Energies, 2021, vol. 14, issue 21, 1-14

Abstract: While it is widely acknowledged that carbon pricing plays an important role in driving the transition towards a low-carbon energy system, its interaction with complementary instruments is discussed controversially. The analysis of combining carbon pricing with complementary policies has been mostly focused on the electricity sector, while the role of carbon pricing in the buildings sector has received only minor interest. In view of the newly introduced carbon pricing scheme for the buildings and transport sector in Germany, we analyze the interactions between the carbon pricing scheme with the existing policy instruments and assess the consistency of the policy mix for decarbonizing the buildings sector. Our analysis finds that the introduction of carbon pricing has a reinforcing effect on the instrument mix and adds to the consistency of the policy mix. The results highlight the importance of complementary policies in order to achieve deep decarbonization in the buildings sector. We conclude that carbon pricing, preferably implemented as a tax with a predictable and increasing price level, needs to be supplemented with a powerful mix of complementary measures.

Keywords: carbon pricing; policy mix; energy transition; buildings; climate policy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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