Tax incentives reduce energy consumption - if effectively implemented

By studying the effects of Basel's electricity levy, researchers at the University of Lucerne investigated how tax incentives work in practice and how their impact on energy consumption could be increased. The National Council and the Council of States decided not to debate the proposals of the Federal Council on the second phase of the Energy Strategy 2050 concerning the climate and energy tax incentive KELS. But as tax incentives were not ruled out in principle, researchers at the University of Lucerne analysed the impact of electricity levies on electricity consumption in the context of the National Research Programme "Managing Energy Consumption" (NRP 71). "Tax incentives let consumers react in different ways and they are, therefore, cost-effective. But we don't currently know if and to what extent tax-induced increases in electricity prices lead to changed consumption patterns in households and industry," says Simon Lüchinger, economics professor at the University of Lucerne. Learning from Basel. The researchers wanted to find out how tax incentives influenced consumer behaviour and what shape a national scheme should take.