Rhein on Energy and Climate

Among the 27 EU member states Germany pursues the most ambitious climate targets. By 2020 its C02 emissions should be 40 percent below 1990 levels. To that end, the government bets on a variety of actions ranging from C02 taxes, feed-in tariffs for renewable energy and, last not least, a programme for the energetic overhaul of its housing stock, which should enable private households to reduce their C02 emissions by 35 million tons until 2020.

The German housing energy programme follows a simple recipe: House owners wishing to improve the energetic status of their homes can draw on subsidised loans from the state-owned KfW. Between 2007-10 the Bank has granted loans for a total amount of € 17 billion, subsidised by € 5.5 billion from the federal budget, to help finance energetic renovations of 0.9 million homes.

The EU should copy the German model and introduce a similar scheme for 2014-20. It should make available € 10 billion annually from the European Regional Development Fund for subsidies to be granted for energetic renovation loans, especially in Central Europe where the energetic status of the housing stock is in poor shape. Such a scheme would have a dual effect of reducing C02 emissions at relatively low cost and creating jobs in the building industry.

The Commission should make appropriate proposals in the preparation of the 2014-20 financial perspectives.

Brussels 31.12.10 Eberhard Rhein

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