List Forum für Wirtschafts- und Finanzpolitik

Even before the effects of the wide range of measures introduced at the beginning of the decade to reduce emissions from the building sector was clearly recognizable, in 2023, a de-facto ban on the installation of oil-only and gas-only heating systems as of 2024 was enacted. This ban is rejected by around four-fifths of the population and has led to a predictable anticipatory reaction: In 2023, around 0.9 million new gas and oil heating systems were installed, resulting in a record total of over 1.3 million new heating systems. There was a similar reaction before the introduction of the Renewable Heating Act in Baden-Württemberg in 2010. Given the massive rejection of the ban by the population, it would have been wiser and economically more advantageous if the warming turnaround had instead been assigned to the separate EU emissions separate EU emissions trading scheme for the warming and transport sectors. With the help of this second emissions trading scheme, emissions from the two sectors can be cost-effectively reduced: The emissions would be avoided where it is most cost-effective in Europe. Yet, the most cost-effective emissions savings are hardly achieved by the refurbishment of old houses in Germany and the installation of highly expensive heat pumps. Measures that are not taken as part of this emissions trading system, but are additionally prescribed or mandated at the national level would make greenhouse gas avoidance more expensive, but would not help to save emissions at the European scale: the allowances released as a result of the national measures would be purchased by other firms participating in the second emissions trading scheme, which means that elsewhere in the European Union emissions would turn out to be higher (waterbed effect).