Climate Policy Uncertainty and Household Investment
In this paper, we explore how climate policy uncertainty affects homeowners' investments in energy efficiency. To this end, we conducted a survey experiment in Germany, where a national carbon price on carbon emissions from the building and transport sectors has been introduced in 2021, and experimentally vary the uncertainty surrounding the future price path of the carbon price. Our experimental design allows us to shed light on how households update their beliefs with respect to the future carbon price level and how such belief updating affects households' plans to invest into energy efficiency investments.