Economic instruments to improve UK home energy efficiency without negative social impacts

Simon Dresner and Paul Ekins

Fiscal Studies, 2006, vol. 27, issue 1, 47-74

Abstract: The research examined how to use economic instruments to reduce carbon emissions from the UK housing sector without causing negative impacts on the poorest households. Carbon taxes would worsen the problem of fuel poverty. Compensation mechanisms involving the tax and benefit system were examined, but found not to be entirely effective because of the enormous range in the existing energy efficiency of homes. Exemptions for low-income households were examined, but found impractical to target. It was concluded that the best way to use economic instruments was through a scheme involving energy audits and surcharges to council tax and stamp duty for homeowners who failed to make cost-effective energy efficiency improvements within a specified time, with grants and loans to assist low-income households. After the implementation of such a scheme for 10 years, it would be practical to introduce a targeted carbon tax.

JEL-codes: H23 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (31)

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