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Optimal Investment in Energy Efficiency as a Problem of Growth-Rate Maximisation : Evidence and Policy Implications

Britto, Anthony; Dehler-Holland, Joris

Following recent developments in economic and finance theory, we formulated in a recent article the question of when and how much a consumer might optimally invest in energy efficiency as a problem of wealth-growth-rate maximisation. In this contribution, we scale up this framework to a unique dataset combining the top three wealth quantiles, and nine generations of single and terraced homes in Germany: 21% of the total building stock, altogether told. We calculate the share of dwellings over time whose consumers see incentive to retrofit, and are able to reproduce (i) the annual variation in the uptake of government subsidies, (ii) the tendency of consumers to wait out the lifetime of their current heating system, (iii) the slow diffusion of new heaters, and (iv) the propensity of consumers to shun deep retrofits. We additionally uncover new wealth effects, most notably the proclivity of richer consumers whose wealth growth faster to retrofit less, and when they do, to etrofit to shallower depths.

We also compute the effects of the German government’s retrofit subsidy schemes, and the proposed carbon tax on heating, employing a counterfactual approach. ... mehr

Preprint §
DOI: 10.5445/IR/1000140253/pre
Veröffentlicht am 23.11.2021
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Industriebetriebslehre und Industrielle Produktion (IIP)
Publikationstyp Proceedingsbeitrag
Publikationsdatum 11.10.2021
Sprache Englisch
Identifikator ISBN: 978-91-983878-8-9
ISSN: 1653-7025, 2001-7960
KITopen-ID: 1000140253
Erschienen in eceee 2021 Summer Study on energy efficiency : a new reality?
Veranstaltung eceee Summer Study (2021), Online, 07.06.2021 – 11.06.2021
Verlag European Council for an Energy Efficient Economy (eceee)
Seiten 855-864
Serie eceee Summer Study proceedings
Projektinformation GRK 2153 (DFG, DFG KOORD, GRK 2153/2)
Externe Relationen Siehe auch
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Schlagwörter investment decision-making, building retrofitting, emission reduction policy analysis, energy efficiency investments, household wealth, energy price stochasticity, carbon tax, subsidies
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