National Fund for Environmental Protection and Water Management

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

2. Plan of the presentation • Poland – keychallenges • A recommendedpolicy mix – housingsector • Housing – newbuildings • Housing – exsistingbuildings • Conclusions

3. 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

4. A recommended policy mix – housing • New buildings • Existing buildings • Any policy mix needs to be complemented with ecological education.

5. 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 buildingsunder a condition of achieving strict energy standards

6. Housing – new buildings. Subsidised morgage loans, efficient instrument to support near zero - emission buildings • Triple benefit: • Improved energy efficiencyis a viable investment • Lower margins on mortgage as energy awareborrowersaremorecreditworthy • A small grant componentfrom public funds to attractattention of households

7. Housing – new buildings • Conclusions: • No need to coverallincrementalcosts by the state to achieverequired energy standard • Market mechanismswork for the environment

8. Housing – exsisting buildings • 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

9. Housing – exsisting buildings, lack of co-ordination between ecological & social policy (1) • Householdsenjoyregulatedelectricitytariffs: • Tariffsaretwotimeslowerthanin Germany • Subsidisedelectricity for thepoor and thewell-offresultsintheinflatedconsumption • Moderatesocialgoalisat high economic & environment cost to thesociety

10. Housing – exsisting buildings, lack of co-ordinations between ecological & social policy (2) • Thepoorareeligible for housingallowances: • Households do not face any financial barrier as extra consumption of electricityiscovered by the state

11. Housing – exsisting buildings • Conclusions: • Gettingpricesright • Social instruments need to be accuratelytargeted • Providethepoorwithenergy-efficientequipmentinsteadof subsidizing energy consumption

12. Conclusions (1) • Ecological policy is vulnerable to general politics • Broad support for environmental priorities is a must for proper co-ordination of sectoral policies

13. Conclusions (2) • 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

14. Conclusions (3) • Market mechanisms can be employed to contribute to the achievement of environment goals