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Effects of energy performance certificates on investment: A quasi-natural experiment approach
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics. Umeå University, Faculty of Social Sciences, Centre for Environmental and Resource Economics (CERE).
Umeå University, Faculty of Social Sciences, Centre for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0002-6067-3296
Vilnius University.
2019 (English)In: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 84, article id 104480Article in journal (Refereed) Published
Abstract [en]

Incomplete information may be one reason why some households do not invest in energy efficiency even though it would benefit them to do so. Energy performance certificates (EPCs) have been promoted to overcome such information shortages. In this paper, we investigate whether EPCs together with mandatory home energy audits make households more likely to invest in energy efficiency. Our study takes advantage of the mandatory nature of the EPCs to avoid the potential selection bias problem that typically applies to studies using voluntary energy audits as the treatment. Our treatment group consists of single-household houses in Sweden sold from 2008, i.e., when EPCs became legally required in connection with sales of residential buildings, to 2015; while the control group consists of houses sold between 2002 and 2008, i.e., without an EPC. The results show that there is no statistically significant treatment effect for most of the measures that a household can take to improve the energy performance of their house. The significant treatment effect that we do find concerns a few heating system-related measures.

Place, publisher, year, edition, pages
Elsevier, 2019. Vol. 84, article id 104480
Keywords [en]
energy performance certificate, energy audits, quasi-natural experiment, incomplete information, investment decision, energy efficiency gap, policy evaluation
National Category
Economics Energy Systems
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-162070DOI: 10.1016/j.eneco.2019.104480ISI: 000506712700030Scopus ID: 2-s2.0-85074151402OAI: oai:DiVA.org:umu-162070DiVA, id: diva2:1349231
Available from: 2019-09-07 Created: 2019-09-07 Last updated: 2020-10-26Bibliographically approved
In thesis
1. Energy efficiency, district heating and waste management: essays on environmental economics
Open this publication in new window or tab >>Energy efficiency, district heating and waste management: essays on environmental economics
2020 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Paper [I] investigates the energy efficiency of multi-dwelling buildings in Sweden to find out whether the ownership type matters. More specifically, we investigate whether rental apartment buildings are less energy efficient than cooperative apartment buildings and whether public ownership has a negative impact on energy efficiency. A conceptual framework is presented to illustrate that such differences could be explained by the split incentives problem and deviations from profit maximizing interests. The empirical analysis is based on a unique dataset that combines data from energy performance certificates with ownership data on residential units. The results indicate that cooperative apartment buildings are significantly more energy efficient than buildings with rental apartments. The results also indicate that publicly owned buildings have somewhat lower energy performance than privately owned ones.

Paper [II] Incomplete information may be one reason why some households do not invest in energy efficiency even though it would benefit them to do so. Energy performance certificates (EPCs) have been promoted to overcome such information shortages. In this paper, we investigate whether EPCs together with mandatory home energy audits make households more likely to invest in energy efficiency. Our study takes advantage of the mandatory nature of the EPCs to avoid the potential selection bias problem that typically applies to studies using voluntary energy audits as the treatment. Our treatment group consists of single-family houses in Sweden sold from 2008, i.e., when EPCs became legally required in connection with sales of residential buildings, to 2015; while the control group consists of houses sold between 2002 and 2008, i.e., without an EPC. The results show that there is no statistically significant treatment effect for most of the measures that a household can take to improve the energy performance of their house. The significant treatment effect that we do find concerns a few heating system-related measures.

Paper [III] The price of district heating in Sweden is unregulated and differs substantially among different networks. This paper investigates if the price variation can partly be explained by ownership status, i.e., whether the network companies are privately- or municipally-owned. The empirical analysis is based on data on district heating prices, ownership status, and network characteristics for the period 2012-2017. The results show that prices are higher in privately-owned district heating networks than in municipally-owned networks, especially in the fixed component of the price. It is argued that municipal and private companies’ divergent objectives may be part of the explanation for these differences. Finally, district heating prices are positively correlated with the market prices for heat pumps, regardless of ownership, which suggests a general price-setting strategy based on the price of substitutes.

Paper [IV] assesses whether and to what extent income and the stringency and enforcement (S&E) of environmental regulation influence compliance with the EU Waste Hierarchy (EWH), i.e., how EU member states treat waste. The EWH prioritizes waste prevention and re-use over recycling, which is ranked above waste to energy (WtE), while incineration and landfilling are the least preferred options. Biennial panel data for the period 2010–2016 is used to create a compliance index based on the waste treatment alternatives in the EWH. The waste (excluding major mineral waste) of 26 European Union countries is examined. This study is the first of its kind to regress an EWH compliance index on income, the stringency and enforcement of environmental regulation, and other variables that are also expected to affect the relative benefits and costs of waste treatment, such as population density, heating demand, and electricity prices. The shares of landfilling, incineration, WtE, and recycling are also modeled to capture the effect of these variables in the waste treatment mix. The stringency and enforcement of environmental regulation are found to have a positive effect on compliance with the EWH, which has increased over time.

Place, publisher, year, edition, pages
Umeå: Umeå University, 2020. p. 21
Series
Umeå economic studies, ISSN 0348-1018 ; 979
Keywords
energy efficiency gap, principal-agent, split incentives, ownership, energy performance certificates, quasi-natural experiment, policy evaluation, district heating prices, natural monopoly, waste management, EU waste hierarchy, policy stringency, policy enforcement
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-176259 (URN)978-91-7855-386-0 (ISBN)978-91-7855-387-7 (ISBN)
Public defence
2020-11-20, ULED, Triple Helix, Umeå, 10:00 (English)
Opponent
Supervisors
Available from: 2020-10-30 Created: 2020-10-26 Last updated: 2021-01-14Bibliographically approved

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Broberg, ThomasEgüez, AlejandroKazukauskas, Andrius

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