Climate Policy as Distributional Politics: Why Do Decarbonization Policies in the German Housing Sector Have a Regressive Bias?

Leon Wansleben and Laura Carlotta Terhorst

The topic of housing has been central to the discussion of the social aspects of climate policy-making for some time, among other things because of rising housing costs resulting from energy-related retrofitting of residential buildings and energy poverty in low-income households. For Germany, econometric studies indeed suggest that various climate policies associated with housing, such as feed-in tariffs and subsidies for solar panels or insulation, have regressive distributional effects. Property owners with high incomes can use these subsidies and make savings in the longer term, while lower-income renters face higher costs because landlords are able to pass the costs on to them, or they may live in properties in which landlords fail to invest. The objective of this project is to explore why and how policy processes in Germany have led to this regressive distributional outcome. Why have policy makers failed to adopt effective solutions that would benefit renters, who account for the majority of the German housing sector? We aim to explain this outcome with a process-tracing design for theory building that covers interest group and party politics, public discourse, implementation, and underlying dispositions and concepts of justice.

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