Abstract
Heating is responsible for a substantial share of global energy consumption and still relies strongly on fossil fuels. In order to reduce energy consumption for heating, subsidies for building renovations are a common policy measure in Europe. Policy makers often combine them with information and advice measures. Policy mixes of this kind have been acknowledged widely in the literature, but their effectiveness needs further empirical examination. Based on a survey of the recipients of renovation subsidies and on four focus groups, we examine the (cost) effectiveness of subsidies, as follows: The effectiveness of renovation subsidies was measured by the extent to which receiving subsidies contributed either to the decision to renovate at all, or to the decision to enhance the quality or scope of the renovation. Fifty percent of the recipients surveyed reported that the subsidies contributed to a more energy-efficient renovation than was initially intended. The other fifty percent must be considered as free riders. Multivariate analyses further show that homeowners who used advice services and attributed outstandingly positive characteristics to the policy implementer were more likely to spend subsidies to improve energy efficiency. The findings demonstrate the importance of applying a combination of financial and persuasive policy measures. Additionally, they illustrate the importance of non-financial and non-technical factors, such as the communication competencies of the implementer, when designing policy measures.
Highlights
In light of global warming, the reduction of fossil energy consumption is one of the key challenges facing societies around the world
In our attempt to illustrate how policy makers can increase the effectiveness of subsidies, we focus on two effects that have so far been underrepresented in empirical studies on the effectiveness of subsidies for building renovations, namely: the positive effect of advice services and homeowners’
We examined whether policy factors and individual characteristics relate to the effectiveness of subsidies; our intention was to learn about the factors that have the potential to reduce free riding
Summary
In light of global warming, the reduction of fossil energy consumption is one of the key challenges facing societies around the world. Heating is responsible for nearly one third of global final energy consumption [1], and fossil fuel remains the main energy source for heating. Even though financial support for energy efficiency in buildings is increasing in many European countries [4]. On a global scale, the International Energy Agency (IEA) concludes that “[g]lobal building-related CO2 emissions have continued to rise of nearly 1% per year since 2010 [ . ]. Concerted global effort is needed to rapidly expand, strengthen and enforce building energy policies across all countries to prevent the lock-in of long-lived, inefficient building investments” Concerted global effort is needed to rapidly expand, strengthen and enforce building energy policies across all countries to prevent the lock-in of long-lived, inefficient building investments” ([7], p. 54)
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