Anita Thonipara

Empirical Evidence on the Effectiveness of Energy Economic Policy Instruments from the Residential and SMEs Sector

This dissertation analyzes the effectiveness of different energy economic policy instruments for carbon dioxide emission reductions. To this end, evidence on the effectiveness of energy economic policy instruments on residential buildings and SMEs are presented. Using an exploratory approach and panel data methods we find evidence for the effectiveness of regulatory measures and carbon taxation. The results further suggest that the scope of the carbon tax is decisive for the size of reductions of carbon dioxide emissions. Hence, the effects of the Swedish carbon tax increase on residential carbon emissions are analyzed using Difference in Differences Methods as well as Synthetic Control Methods. The results suggest per capita carbon emission reductions of 300 kg – 800 kg per year. The results further suggest that carbon taxation is not only an effective but also efficient tool to reduce residential carbon emissions if the tax rate is set on a high enough level of around 120 Euros per ton of CO₂. In the second part of this dissertation the economic effects of a carbon tax of different scopes on small, energy-intensive companies is calculated using different carbon pricing and compensatory scenarios. The effect sizes vary between average additional costs of 154 Euros per employee and year and benefits for the companies in the case of compensatory scenarios. An analysis of drivers of energy efficiency measures in small companies further suggests that investments are mainly driven by management’s environmental sensitivity and promoted by proactive firm-specific consultation while financial support programs are less relevant due to high bureaucratic burden and missing in-house capacities. By providing insights into the effectiveness of different energy policy instruments and by deriving policy implications, this dissertation adds to the broad field of climate change mitigation.