Endogenous Energy Efficiency Improvement

We managed to construct two novel and functional methodologies to depict the evolution of energy efficiency improvements (EEI) in two Swiss sectors, housing and cement. This allowed us to obtain a better representation of EEI triggered by energy and climate policies. Although we use available data to calibrate the models, the focus of this exercise was not to obtain precise quantitative results, but rather to construct a proof of concept. Simulating different policy scenarios over 2015-2050, we showed that it is important to consider the responsiveness to various types of policies. It is, for example, important to not only consider monetary incentives (such as subsidies or taxes), but also “softer” measures such as information campaigns. This is especially true in the building sectors, as many owners suffer from incomplete information. Consequently, a given target can be achieved at lower cost when using a smart mix of hard and soft policies.