Greening the economy: identifying a proper policy mix Jan Rączka President of the Board National Fund for Environmental Protection and Water Management

Plan of the presentation Poland – key challenges A recommended policy mix – housing sector Housing – new buildings Housing – exsisting buildings Conclusions

National Fund for Environmental Protection and Water Management Poland – key challenges Broad support for environmental priorities by politicians Pressure of various interest groups Co-ordination of sectoral policies Too complex incentives Unclear vision of a long term competitive advantage

National Fund for Environmental Protection and Water Management A recommended policy mix – housing New buildings Existing buildings Any policy mix needs to be complemented with ecological education.

National Fund for Environmental Protection and Water Management Housing – new buildings Strict energy standards (introduced earlier than required by the EU directives) Financial incentives for households Public institutions eligible for EU grants for buildings under a condition of achieving strict energy standards

National Fund for Environmental Protection and Water Management Housing – new buildings. Subsidised morgage loans, efficient instrument to support near zero - emission buildings Triple benefit: o Improved energy efficiency is a viable investment o Lower margins on mortgage as energy aware borrowers are more creditworthy o A small grant component from public funds to attract attention of households

National Fund for Environmental Protection and Water Management Housing – new buildings Conclusions: o No need to cover all incremental costs by the state to achieve required energy standard o Market mechanisms work for the environment

National Fund for Environmental Protection and Water Management More ambitious standards for rehabilitated buildings Financial incentives scaled to actual energy standards achieved after rehabilitation Some buidings are not worth rehabilitating - a criterion to be defined Co-ordination between ecological and social policies is needed Housing – exsisting buildings

National Fund for Environmental Protection and Water Management Housing – exsisting buildings, lack of co-ordination between ecological & social policy (1) Households enjoy regulated electricity tariffs: o Tariffs are two times lower than in Germany o Subsidised electricity for the poor and the well-off results in the inflated consumption o Moderate social goal is at high economic & environment cost to the society

National Fund for Environmental Protection and Water Management Housing – exsisting buildings, lack of co-ordinations between ecological & social policy (2) The poor are eligible for housing allowances: o Households do not face any financial barrier as extra consumption of electricity is covered by the state

National Fund for Environmental Protection and Water Management Housing – exsisting buildings Conclusions: o Getting prices right o Social instruments need to be accurately targeted o Provide the poor with energy-efficient equipment instead of subsidizing energy consumption

National Fund for Environmental Protection and Water Management Ecological policy is vulnerable to general politics Broad support for environmental priorities is a must for proper co-ordination of sectoral policies Conclusions (1)

National Fund for Environmental Protection and Water Management Environmental goals can be achieved through interlinking other policies with environmental standards We can get more out of public money we have if we rebalance incentives Conclusions (2)

National Fund for Environmental Protection and Water Management Market mechanisms can be employed to contribute to the achievement of environment goals Conclusions (3)