Energy Policies for Eco-Friendly Households in Luxembourg: a Study Based on the LuxHEI Model
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Energy Policies for Eco-Friendly Households in Luxembourg: a Study Based on the LuxHEI Model ´ Stephane Poncin1 Received: 22 May 2019 / Accepted: 4 August 2020 © Springer Nature Switzerland AG 2020
Abstract In the Grand Duchy of Luxembourg, the residential building sector is a major energy consumer and greenhouse gases emitter that plays a key role in achieving the country’s environmental objectives. The purpose of this work is to assess the effectiveness of the most important policy instruments in decreasing the final energy consumption and direct CO2 emissions of Luxembourgish households. To this end, we developed the LuxHEI model, which is an enhanced and upgraded version of the well-known French simulation model Res-IRF. This variant has also been adjusted to the particular problems of a small country with growing economy and a quickly increasing population. The LuxHEI model goes beyond standard energyeconomy models by incorporating global warming as a decision-making factor. The model outcomes reveal that in 2060, and compared with the no-policy baseline scenario, the most aspirational policy mix enables energy savings of 42% and emission reductions of 60%. However, in none of the projections, the residential building sector meets the national energy and climate targets on time. From the results we can draw the following policy implications: for a significant improvement of the sector’s energy efficiency and sufficiency, the implementation of a remediation duty for existing buildings and the tightening of the performance standards for new constructions, together with the application of a national carbon tax, are crucial. Keywords Climate targets · Energy-economic policy modeling · Energy efficiency · Emission mitigation · Residential building sector JEL Classification C10 · C63 · D10 · Q4
1 Introduction Despite the fact that residential building sector has been known for a long time to hold a large and cost-effective energy- and emission-saving potential [1, 2], only a fraction of it is currently exploited [3]. Yet, with today’s efforts to mitigate the devastating consequences of human-made climate change [4] being largely insufficient to meet the vital goals of the Paris Agreement [5], the further exhaustion of this key GHG-emitting sector’s potential is now more important than ever. In order for this to be realized, the
St´ephane Poncin
[email protected] 1
Department of Economics Management, University of Luxembourg, 6, rue Richard Coudenhove-Kalergi, 1359 Luxembourg, Luxembourg
application of energy policies that aim at increasing energy efficiency and sufficiency is considered to be crucial [6]. In this light, the current study aims at evaluating the effectiveness of the most important policy instruments in making Luxembourgish households more eco-friendly, that is, reduce final space heating energy consumption and direct CO2 emissions. More precisely, we analyze the following: (1) the ranking of the policy instruments in terms of environmental and economic effectiveness when applied individual
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