Why renovation obligations can boost social justice and might reduce energy poverty in a highly decarbonized housing sector

Panel: 7. Policies and programmes for better buildings

Authors:
Andreas Müller, Zentrum für Energiewirtschaft und Umwelt, Austria
Lukas Kranzl, TU Wien, Austria

Abstract

Achieving the 1,5 °C target will require almost complete decarbonisation of the building sector even until the year 2040 in EU countries. Previously developed decarbonisation scenarios did not explicitly show how this transition process will be possible considering affordability and social inclusiveness. While CO2-taxes are included in almost all proposed future policy packages as a key instrument, it is not clear how a CO2-tax might affect low-income households and how different institutional settings affect the level of target achievement. We will deal with following research questions: (1) Is a CO2-tax sufficient to achieve decarbonisation in the Austrian housing sector, considering different structures of housing provision and low-income households? (2) Which impact would a CO2-tax imposed on the housing sector have on low-income households for the case of Austria? (3) What is the impact of regulatory policy instruments like a renovation obligation in combination with a CO2-tax, in particular on low-income households? Key structures of housing provision are the starting point of our analysis, e.g. the distinction of rented vs. owner occupied, and considering (age classes and income classes of households. We integrate these structures in the building stock model Invert/EE-Lab through different constraints and decision rationales. After having modified the model in this way, we model following scenarios: (i) a base case scenario achieving decarbonisation through strong regulatory measures and a CO2-tax, (ii) a scenario without a renovation obligation, (iii) a scenario without renovation and RES-H obligation. We conclude that CO2-taxes alone are not sufficient for achieving decarbonisation targets and that they may lead to adverse effects for low-income households. Mandatory, well prepared and accompanied long-term targets for building renovation, can compensate for these negative effects and make sure that the CO2-tax can unleash its full impact.