Universität zu Köln

Loeffler, Caroline and Hecking, Harald (2017). Greenhouse Gas Abatement Cost Curves of the Residential Heating Market: A Microeconomic Approach. Environ. Resour. Econ., 68 (4). S. 915 - 948. NEW YORK: SPRINGER. ISSN 1573-1502

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Abstract

In this paper, we develop a microeconomic approach to deduce greenhouse gas abatement cost curves of the residential heating sector. Our research is based on a system dynamics microsimulation of private households' investment decisions for heating systems to the year 2030. By accounting for household-specific characteristics, we investigate the welfare costs of different abatement policies in terms of the compensating variation and the excess burden. We investigate two policies: (i) a carbon tax and (ii) subsidies on heating system investments. We deduce abatement cost curves for both policies by simulating welfare costs and greenhouse gas emissions to the year 2030. We find that (i) welfare-based abatement costs are generally higher than pure technical equipment costs; (ii) given utility maximizing households a carbon tax is the most welfare-efficient policy and; (iii) if households are not utility maximizing, a subsidy on investments may have lower marginal greenhouse gas abatement costs than a carbon tax.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Loeffler, Caroline UNSPECIFIED UNSPECIFIED UNSPECIFIED Hecking, Harald UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-209520
DOI:	10.1007/s10640-016-0052-0
Journal or Publication Title:	Environ. Resour. Econ.
Volume:	68
Number:	4
Page Range:	S. 915 - 948
Date:	2017
Publisher:	SPRINGER
Place of Publication:	NEW YORK
ISSN:	1573-1502
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language DISCRETE-CHOICE MODELS; ENERGY-CONSUMPTION; EQUILIBRIUM; TAXATION; WELFARE; SECTOR; TAXES; EXTERNALITIES; SPECIFICATION; GERMANY Multiple languages Economics; Environmental Studies Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/20952