Is Green Deal the future of energy renovations in Denmark?
Original title: Er Green Deal vejen frem for energirenoveringer i Danmark?
In 2013, UK adopted the so called ‘Green Deal’ initiative to spur energy efficient renovations in buildings. The initiative contained several novel features, which inspired our client to investigate the merits of Green Deal in a Danish context.
Our main conclusions are the following:
- Green Deal allows households with restricted credit access to energy renovate. These renovations are likely to have high additionality.
- The financing mechanism addresses important behavioural biases in households
- Despite this, Denmark should not adopt the Green Deal financing mechanism:
- Structural differences between UK and DK’s housing standard and financing markets makes it less attractive in Denmark.
- The financing mechanism does not remove credit risk: it shifts it to new providers and existing mortgage lenders.
- There are significant costs associated with establishing the needed infrastructure.
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