Abstract
The recent surge in European energy prices could substantially reduce the social cost of Climate Action Plans. This paper conducts an ex-ante Cost-Benefit Analysis of mitigation policies in residential heating and studies the extent to which rising energy prices modifies their cost-effectiveness. I use the city of Bristol (UK) as a case study and assess two options: (1) investing in district heating networks in central districts or (2) subsidizing energy efficiency retrofits for least efficient dwellings. Implementing either of the two policy options under high energy prices trends increase economic benefits to households by around £ 1 per pound invested, in present value, relative to a scenario with baseline energy prices trends. Besides, district heating networks become more cost-effective at mitigating carbon emissions than energy efficiency retrofits.JEL classification: D61, Q41, Q48, Q58
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