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Policies of support to energy efficiency: taxes vs subsidies

10th National Competition for Economic Research Grants

Public economics

Senior Researcher : Ibon Galarraga Gallastegui

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Research Centre or Institution : Basque Centre for Climate Change (BC3)


This proposal is focussed on understanding the factors that explain the consumption patterns of individuals in order to improve the policies for the promotion of more sustainable, low-carbon consumption habits. To this end, we analysed the policies for the promotion of energy efficiency in Spain associated with the purchase of household appliances and cars. On a preliminary basis, this project has made it possible:

  • a) To estimate how much consumers pay on the market for energy efficiency attributes (controlling all other attributes) in both types of goods: between 4 and 12% of the final price in the case of household appliances and around 10% in the case of cars.
  • b) To analyse combinations of taxes and subsidies from the perspective of economic efficiency, environmental effectiveness and political feasibility.
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