Carbon tax and energy programs for buildings: Rivals or allies?

Carbon tax is among the most intensively discussed topics in energy research and policy nowadays, but the question of using carbon tax revenue for environmental and energy policy purposes has received little attention so far. Currently the revenue generated from carbon tax has different usage in the countries worldwide, with only one quarter used for environmental and sustainable energy purposes. Against this background we study whether it can be advisable to use carbon tax revenue for financing energy efficiency and renewable energy (EERE) programs. Based on the case study of Switzerland, we demonstrate that such a policy approach could not only allow to achieve additional reduction of CO2 emissions, but also considerable net benefits to household sector with regard to reduction of heating costs, while having rather low program costs for individual households.