  Whole-economy scenarios for limiting global warming to 1.5C suggest that
direct carbon emissions in the buildings sector should decrease to almost zero
by 2050, but leave unanswered the question how this could be achieved by
real-world policies. We take a modelling-based approach for simulating which
policy measures could induce an almost-complete decarbonisation of residential
heating, the by far largest source of direct emissions in residential
buildings. Under which assumptions is it possible, and how long would it take?
Policy effectiveness highly depends on behavioural decision- making by
households, especially in a context of deep decarbonisation and rapid
transformation. We therefore use the non-equilibrium bottom-up model FTT:Heat
to simulate policies for a transition towards low-carbon heating in a context
of inertia and bounded rationality, focusing on the uptake of heating
technologies. Results indicate that the near-zero decarbonisation is achievable
by 2050, but requires substantial policy efforts. Policy mixes are projected to
be more effective and robust for driving the market of efficient low-carbon
technologies, compared to the reliance on a carbon tax as the only policy
instrument. In combination with subsidies for renewables, near-complete
decarbonisation could be achieved with a residential carbon tax of
50-200Euro/tCO2. The policy-induced technology transition would increase
average heating costs faced by households initially, but could also lead to
cost reductions in most world regions in the medium term. Model projections
illustrate the uncertainty that is attached to household behaviour for
prematurely replacing heating systems.
