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Climate Policy Without a Price Signal: Evidence on the Implicit Carbon Price of Energy Efficiency in Buildings

Ghislaine Lang and Bruno Lanz

March 2020

Based on data for a portfolio of 548 multi-unit buildings observed over 16 years, we quantify the impacts of more than 400 energy efficiency interventions among 240 treated buildings. We exploit variation in the timing of investments to provide evidence that treated and control buildings follow the same trend in the absence of energy efficiency investments, and use staggered difference-in-differences regressions to document building-level energy savings, CO2 abatement, and heating expenditure reductions. We find considerable heterogeneity in the price of carbon implicitly associated with alternative interventions, with estimates for frequently subsidized measures well above available benefit estimates for avoided emissions.

Keywords: Regulation; implicit carbon price; energy efficiency investments; energy savings; staggered design; climate policy.

JEL Codes: H21; H23; Q41; Q49; Q58; R31.