Incentive policy in the area of the housing market for the implementation of the Kyoto targets: the case of Austria

According to the Kyoto protocol and the EU burden sharing, Austria has to reduce its greenhouse gas emissions by 13 percent from the 1990 levels by 2008-2012. The subject of house heating has an enormous unused carbon dioxide emissions reduction potential, which indicates that existing institutional conditions do not induce the required energy saving investments. The paper is aimed at developing an efficient incentive mechanism for implementing the Kyoto targets in the area of the residential housing stock. Current Austrian housing market regulations cause a cut-off of incentives for thermal-energetic renovation in the area of rental housing. Therefore the paper concentrates on developing an incentive scheme offering a solution for the investor/user problem on the strictly regulated rental housing market in Austria.