Social Impact of Energy Price Rises and Options for Climate Change Policies 

Heating and electricity costs for private households have increased significantly due to large energy price rises over the last year. In particular low income households have to spend a noticeable share of their budget for household energy. Although welfare aid has so far prevented a spread of open “fuel poverty” in Germany, consumer organisations are reporting on more and more outstanding debts or even cut-offs by electricity suppliers. Taking Frankfurt/Main as an example, ISOE and the ifeu-Institute for Energy and Environment, Heidelberg, analysed the consequences of energy price rises, focusing both on the impacts on low income households living on welfare aid (ALG II, Sozialgeld, Sozialhilfe) and on municipalities as municipalities which are in charge of funding welfare aid schemes in Germany. Based on this survey, obstacles for a more efficient household energy use are identified and recommendations for energy efficiency strategies, meeting the need of this target group without reducing comfort and quality of life, are suggested.

Welfare aid regulations imply a differing approach for the reimbursement of electricity and heating energy costs: On the one hand, welfare aid (ALG II etc.) includes a fixed rate for electricity costs. However, the amount does not cover electricity price rises completely. On the other hand, heating costs are funded completely by the municipality, resulting in increasing costs for cities and administrative districts (Landkreise). As a consequence, two major obstacles to more energy efficient behaviour can be identified: In the case of electricity, there is an obvious lack of information, because the amount of the rate for electricity is not communicated to welfare aid recipients. In the case of heating energy, the current regulation overrides price signals as potential incentives for a ore efficient energy use.

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