Carbon pricing and buildings: A new trigger for the Renovation Wave?
Buildings are responsible for 40% of the CO2 emissions in the EU. To decarbonise this sector, the European Commission is considering introducing a carbon price. This workshop will look into the opportunities and challenges of this policy, looking at the German case as a first mover in Europe.
Buildings are responsible for 40% of the CO2 emissions in the European Union. According to the Renovation Wave Communication, to achieve the 55% GHG emissions reduction target by 2030, the EU should reduce buildings’ greenhouse gas emissions by 60%. This can only be achieved by at least doubling the renovation rate as soon as possible. In addition to a substantial recast of the Energy Performance of Buildings Directive (EPBD), the European Commission is also considering to review the Emissions Trading System, including an extension to buildings. The “Fit for 55” package announced for July 2021 will likely see a proposal to cover sectors such as buildings and road transport by an emissions trading scheme. In the context of the building sector, however, some particularities require thorough assessment, such as the low price-elasticity of energy demand, the ownership structure of buildings, and the split incentives dilemma. So what should be the contribution of a carbon price in the policy mix for a decarbonised building sector? Can it trigger a Renovation Wave and a switch to fully renewable heating? What needs to be kept in mind when designing a new carbon pricing scheme for buildings?
This workshop that we co-organise with the the German Business Initiative for Energy Efficiency (DENEFF), will dive into the subject of carbon pricing in buildings by looking at lessons from Germany, where a recently launched carbon pricing scheme for buildings is hotly debated.
