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Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis

Author

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  • Pierre Fleckinger

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Matthieu Glachant

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Paul-Hervé Tamokoué Kamga

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

Abstract

In the European Union, Energy Performance Certificates (EPCs) provide potential buyers or tenants with information on a property's energy performance. By mitigating informational asymmetries on real estate markets, the conventional wisdom is that they will reduce energy use, increase energy-efficiency investments, and improve social welfare. We develop a model that partly contradicts these predictions. Although EPCs always improve social welfare in the absence of market failures other than asymmetric information, their impact on energy use and investments is ambiguous and depends both on the time horizon considered and the distribution of energy needs in the population. This implies that, in a second-best world where energy externalities are under-priced, EPCs can damage social welfare.

Suggested Citation

  • Pierre Fleckinger & Matthieu Glachant & Paul-Hervé Tamokoué Kamga, 2019. "Energy Performance Certificates and investments in building energy efficiency: A theoretical analysis," PSE-Ecole d'économie de Paris (Postprint) hal-02451677, HAL.
    • Handle: RePEc:hal:pseptp:hal-02451677
    DOI: 10.1016/j.eneco.2019.104604
    Note: View the original document on HAL open archive server: https://minesparis-psl.hal.science/hal-02451677v1
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    2. de Miguel, Carlos & Filippini, Massimo & Labandeira, Xavier & Labeaga, José M. & Löschel, Andreas, 2019. "Low-carbon Transitions: Economics and Policy," Energy Economics, Elsevier, vol. 84(S1).
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    More about this item

    Keywords

    Energy labeling; Energy efficiency; Buildings;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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