Climate policies aimed at reducing greenhouse gas emissions can lead to decreases in the values of assets, risking them to become “stranded”. We study the price effects of the introduction of a specific climate policy, a minimum energy efficiency standard, in the housing market. Leveraging a unique data set of the population of all residential house transactions in England and Wales, we show that prices of energy-inefficient properties affected by this policy decreased on average by about £5k to £9k relative to efficient ones. We interpret this evidence as being consistent with semi-strong market efficiency in the housing market.
This is the author’s version of a work that was accepted for publication in Energy Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Energy Economics, 120, 2023 DOI: 10.1016/j.eneco.2023.106555
