Pricing is just the icing
Samuel Thomas, Louise Sunderland and Marion Santini
June 2021
55 p.
Buildings emissions, Climate targets, Investments, Modernisation Fund

This report explores the role of carbon pricing in delivering rapid and deep building decarbonisation across the European Union. It makes the case for the gradual and measured introduction of carbon pricing, either at the national or EU level, as one part of a broader package of measures to meet increased Effort Sharing Regulation (ESR) targets.

  • The 2020s must be the decarbonisation decade for European buildings
  • A comprehensive framework of policies and a step change in ambition is needed
  • 55%-proof Effort Sharing Regulation (ESR) targets are essential for the sensible introduction of carbon pricing
  • European carbon pricing measures could also support the achievement of higher ESR targets
  • Fossil gas and electricity prices are not aligned with the 60% building decarbonisation goal
  • Relying on carbon pricing alone to drive building decarbonisation would be catastrophic
  • Carbon revenue recycling can help renovate the worst-performing homes first
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