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Including the buildings sector into any kind of CO₂ pricing scheme without addressing the landlord-tenant dilemma could heavily burden tenants and fail to incentivize climate action in buildings.
In nearly all EU Member States additional costs for carbon emissions would only increase tenants’ bills without encouraging landlords to refurbish their buildings.
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Sweden shows the way out: Here, most rental contracts are all-inclusive rents. Coupled with a CO₂ tax of 114 EUR/t, Sweden has effectively reduced household CO₂ emissions by 95% since 2000.
Since landlords pay heating bills, they have a clear incentive to reduce energy consumption and avoid carbon taxes by renovating their houses and switching to clean heating systems.
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Temperature-based rents can provide targeted incentives for both landlords and tenants.
When heating bills are based on a guaranteed temperature, landlords have the incentive to renovate their buildings, while tenants who keep their apartments cooler (verified by temperature monitoring) pay less.
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The EED should be revised to allow for all-inclusive and temperature-based rents.
This would provide all Member States (not only Sweden, currently profiting from an exception clause) with an easy-to-implement policy instrument that protects tenants from high carbon prices and provides targeted incentives for landlords.
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