Effectiveness of Energy Policy Instruments and Implementation Structures in a Federal Setting

Work Package 4 (2017)

Heating is responsible for a substantial share of the global energy consumption and still strongly relies on fossil fuels. In order to reduce energy consumption for heating, subsidies for building renovations combined with information campaigns and consultation services are common policy instruments in most European countries. This research contributes to the discussion on the joint effectiveness of different types of policy instruments, which has been acknowledged widely in theory, but is still to be studied empirically. We ask if subsidies – in combination with consultancy services – inspire recipients to opt for a more energy efficient renovation than initially intended.

Based on survey data of recipients of subsidies for building renovations, we examine the effectiveness of subsidies. Effectiveness is measured by the extent to which receiving subsidies contributed either a) to the decision to renovate at all or b) to renovate earlier than envisaged, or to enhancing c) the quality or d) the scope of the renovation. 60% of the surveyed recipients reported a change in their investment decision in favor of energy efficient building renovations due to subsidies. Multivariate analysis further showed that the perception of the implementer, the general acceptance of the subsidy policy and making use of a consultancy service augment the likelihood that house-owners use subsidies to improve energy efficiency; while demographic factors, the location of the residence and reported general energy saving behavior do not show significant effects.

The findings show the importance of applying a combination of financial and persuasive instruments: consultancy has the potential to increase the effectiveness of financial instruments. Additionally, the identified positive effect of the perception of the implementer on the effectiveness of subsidies clearly illustrates the importance of non-economic factors when designing policy instruments. Further analysis: Survey and interview data of local authorities on the effectiveness of subsidies and consultancy services, as well as the perception of the implementation bodies are to be analyzed. Furthermore, the comparisons of differences in the effectiveness of energy policy instruments and implementation structures between the cantons will be further explored.

Researchers from SCCER CREST:

Prof. Dr. Sebastian Heselhaus, Dr. rer. pol. Sibylle Studer

Research Partners:

University of Lucerne