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Long-term efficiency and distributional impacts of energy saving policies in the French residential sector
[Efficience et effets distributifs de long-terme des politiques d'économies d'énergie dans le secteur résidentiel français]

Author

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  • 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 - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech)

  • Cyril Bourgeois

    (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech, CNRS - Centre National de la Recherche Scientifique)

  • Philippe Quirion

    () (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique)

Abstract

Using an energy-economy model that integrates behavioural and technological detail, we evaluate the impact of key policies-energy efficiency subsidies (tax credits, zero-interest loans, reduced VAT, white certificates), the carbon tax and building codes-on residential energy demand for space heating in France. We find that the carbon tax is the most effective, yet most regressive, instrument. Taking into account all possible interactions among instruments, we find that they imply on average a 10% variation in policy effectiveness. Subsidies save energy at a cost of 0.05-0.08 euro per lifetime discounted kilowatt-hour, with a leverage of 0.9 to 1.4 in 2015, decreasing over time as the potential for energy-saving opportunities is being exhausted. 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 euros in 2013-is outweighed by carbon tax receipts from 2025 onwards. Meeting the long-term energy saving targets set by the French Government however requires increasing subsidy rates and maintaining them through 2050. In particular, an order-of-magnitude discrepancy between simulated and observed numbers of zero-interest loans points to cognitive or strategic barriers that need to be removed to increase policy effectiveness.

Suggested Citation

  • Louis-Gaëtan Giraudet & Cyril Bourgeois & Philippe Quirion, 2018. "Long-term efficiency and distributional impacts of energy saving policies in the French residential sector [Efficience et effets distributifs de long-terme des politiques d'économies d'énergie dans," Working Papers hal-01890642, HAL.
  • Handle: RePEc:hal:wpaper:hal-01890642
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01890642
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    References listed on IDEAS

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    1. Emmanuel Combet & Frédéric Ghersi & Jean-Charles Hourcade & Camille Thubin, 2010. "La fiscalité carbone au risque des enjeux d'équité," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 59-91.
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    Cited by:

    1. Glotin, David & Bourgeois, Cyril & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2019. "Prediction is difficult, even when it's about the past: A hindcast experiment using Res-IRF, an integrated energy-economy model," Energy Economics, Elsevier, vol. 84(S1).
    2. Louis-Gaëtan Giraudet & Antoine Missemer, 2019. "The Economics of Energy Efficiency, a Historical Perspective," Working Papers halshs-02301636, HAL.
    3. Louis-Gaëtan Giraudet & Anna Petronevich & Laurent Faucheux, 2019. "How do lenders price energy efficiency? Evidence from personal consumption loans," Working papers 716, Banque de France.

    More about this item

    Keywords

    residential buildings; space heating; energy-economy modelling; energy efficiency subsidies; carbon tax; fuel poverty;

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