Economic Methods for Evaluating the Energy-Efficiency Policies across Europe (EMEEP):
Structural Models of Adoption and Counterfactual Analysis
Project Description and Objectives
The European Union aims to become carbon neutral by the middle of this century. This objective is supported by a number of actions gathered recently under the umbrella of the European Green Deal policy package. The implementation plan states that this legislative framework aims to (i) boost energy efficiency and eco-design of products, (ii) empower consumers and help EU countries to tackle energy poverty, and (iii) develop the full potential of Europe’s offshore wind energy.
The Energy Labeling Regulation and the Ecodesign Directive are at the forefront of the EU efforts to reduce the end-use energy consumption of household appliances and industrial machines sold in the EU market. The former instrument requires that the product carries a label that, among other product information, discloses its energy efficiency level. The latter instrument requires manufacturers of certain household and industrial energy-using products to comply with a minimum level of energy efficiency for the products they sell in the EU markets, essentially banning from the market products that have efficiency values below a certain threshold. Additionally, energy efficiency related building standards are among the most common policy tools that have been used by European countries over the last forty years. These regulations are of remarkable importance in light of the fact that end-use energy efficiency could save about 35% of the global CO2 emissions, under the scenario of an almost triple world GDP by 2050. At the same time, at the EU level, household appliances contribute nearly 25% to the total energy consumption, with obvious effects on GHG emissions.
In the EMEEP project, we focus on the adoption of energy efficient technologies by households. We develop structural economic models to study the demand for household appliances in the EU, with a special focus on the CEE Member States. The methods that we aim to develop and extend can be used to assess consumer benefits/costs associated with the introduction of, for example, minimum quality standards by comparing valuations of consumers over time facing choice sets that differ due to regulations. They can also inform about the effectiveness of labeling policies, as this can be viewed as an additional product characteristic. More importantly, such models can be used for designing tax and subsidy policies to accelerate the shift towards energy-efficient technologies.
The main goal of this project is to develop methods to enhance policy design. By focusing on mechanisms which can improve adoption of energy-efficient technologies, our economic models should help policy makers to design sound and effective policies. As such, the outputs of our project will have direct implications for combating climate change.
Funding:
This research is part of the project No. 2021/43/P/HS4/03115 co-funded by the National Science Centre and the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 945339.
Project acronym: POLONEZ BIS 1 “EMEEP”
Project Location: Faculty of Economic Sciences, University of Warsaw , Długa 44/50, 00-241 Warszawa, Poland
Principal Investigator: dr. hab. Łukasz Grzybowski, contact: lgrzybowski@wne.uw.edu.pl
Project Duration: 24 months