No. 19




Energy conservation as a way to ease the recession

  • Oliver Lukason

    Ph.D. student, University of Tartu Faculty of Economics and Business Administration

  • Urmas Varblane

    Urmas Varblane

    Member of the Academy of Sciences, Professor in International Entrepreneurship, Academician, University of Tartu

The current problems in the world economy are forcing countries to find measures to ease the impacts of the crisis, and this is also a relevant issue in Estonia. History has seen a variety of different methods to overcome crisis; the best options are measures that do not require excessive financial resources yet have an impact on various parties. One measure – increasing energy saving – has an effect on the state, households and firms.

Previous Estonian (but also world) practice shows that renovation of Soviet-era apartment houses could result in energy savings of at least 25 %. This would lead to savings of at least 875 million EEK for the Estonian population if one-half of all dwellings were renovated. At the same time, the state could earn at least 5 billion EEK in tax revenue and would retain up to 14,000 jobs annually in a five-year period. In addition, energy saving increases the country’s competitiveness and decreases dependency on foreign energy resources.

The central question is to what extent and how should the state intervene in the process of energy saving. As different tasks have already been set forth in development plans, the Estonian state cannot just remain a bystander – it must intervene with administrative or financial measures. The most cost-effective course of action would be to achieve the previously mentioned results using administrative means (i.e., amendments to legislation). If administrative measures prove ineffective, direct financial support or lending for achieving the results could be considered.

Full article in Estonian