Unintended Effects of Energy Efficiency Policy: Lessons Learned in the Residential Sector

The European Union has set an ambitious goal to tackle climate change, and energy efficiency in the residential sector is among the measures required to close the gap between targeted and actual greenhouse gas emissions. While different policy tools have been applied, the diffusion rate of these measures remains low. A system dynamics simulation model of the residential sector was developed to assess the advantages and drawbacks of energy efficiency policy in the multi-family building sector based on experience accumulated over the last twelve years in Latvia. The model was validated in expert group model building sessions and with historical trends. Simulating the model, a hypothesis was t…