Reducing residential emissions: carbon pricing vs. subsidizing retrofits

Alkis Blanz; Beatriz Gaitan

Home/Archive/arXiv

arXiv · 2310.15687

Reducing residential emissions: carbon pricing vs. subsidizing retrofits

Alkis Blanz·Beatriz Gaitan

View original source ↗Read source document ↗Export metadata ↓

Abstract

In this paper, we compare different mitigation policies when housing investments are irreversible. We use a general equilibrium model with non-homothetic preferences and an elaborate setup of the residential housing and energy production sector. In the first-best transition, the energy demand plays only a secondary role. However, this changes when optimal carbon taxes are not available. While providing subsidies for retrofits results in the lowest direct costs for households, it ultimately leads to the highest aggregate costs and proves to be an ineffective way to decarbonize the economy. In the second-best context, a phased-in carbon price outperforms the subsidy-based transition.

Explore related subjects

econ.GN q-fin.EC

Keep this discovery

Explore connections, maps & timelines

BibTeX RIS

Alkis Blanz, Beatriz Gaitan. 2023-10-24. Reducing residential emissions: carbon pricing vs. subsidizing retrofits. https://arxiv.org/abs/2310.15687

Cite the original work for its findings. Save a collection to share your selection of sources.

KEEP EXPLORING

Related papers

arXiv2026

Local Media and the Shaping of Social Norms: Evidence from the Ebola outbreak

Media's influence on norms and behavior is widely recognized. Less is known about the role played by media being local. I examine this in a high-stakes context, the Ebola outbreak in Guinea. I exploit quasi-random variation in access to radio and the timing of a public-health campaign aired on community radio. I find that 12-17% of Ebola cases could have been prevented if places with access to a neighboring community radio station had instead had their own. Impacts are driven by radio being local rather than by ethno-linguistic belonging. Local media facilitates coordination in behaviors observed and sanctioned locally.

econ.GN↗

arXiv2026

Productivity Shocks and Input Misallocation: A Decomposition

This paper asks how much input misallocation productivity uncertainty generates and at which stage of input decisions it arises. I separate revenue productivity by when each component is revealed and trace each into the gap between an input's marginal revenue product and its price. In six European countries, shocks revealed after an input is committed account for 20 percent of capital gap dispersion and 5 percent of labor gap dispersion. An unanticipated one percent rise in productivity raises the capital gap by 0.92 percent and the labor gap by 0.19 percent, because most of the shock passes into the wage.

econ.GN↗

arXiv2026

When Do Type-Specific Wages Buffer Distributional Incidence in TANK?

When do relative wages buffer the unequal incidence of aggregate shocks? I derive a consumption-gap decomposition and a present-value condition for partial offset in a TANK model. An extension separates wage-setting demand elasticity from substitution between labor segments and allows each segment to contain both financial types. With a zero inherited wage gap and a same-sign discounted wedge, substitution above one gives offsetting earnings reallocation; substitution below one gives amplification. The channel disappears when financial types have identical segment exposure. Numerical experiments assess these mechanisms, shock persistence, policy feedback, and aggregate-IRF matching. In the nested perfect-alignment monetary benchmark, the peak consumption gap is about two-fifths smaller under type-specific wages than under the common-wage closure. These are conditional model comparisons, not empirical effect estimates or welfare rankings.

econ.GN↗