Residential Energy Consumption and the Persistence of History: Evidence From Ukraine
AbstractUkraine's economic and social development at the beginning of the millennium was mainly based on cheap energy and cheap natural and human resources. Traditionally very energy-using, the Ukraine did not reduce its energy consumption in the aftermath of the Soviet Union's breakup, despite the large decline in production. While a carbon tax can be shown to reduce industrial energy consumption significantly (Frey, 2016) little is known about the factors influencing residential energy consumption in Ukraine, which makes it difficult to choose the appropriate policy instrument.
Our paper examines the determinants of residential energy and resource use, including socio-economic factors, and dwelling characteristics and weather conditions. Our focus, however, is on cultural factors and the role of people's attitudes towards the environment in household's energy demand. We look at the case of Ukraine to analyze whether with important historical events like Chernobyl comes persistent regional variations in environmental awareness. Our data is drawn from a 2007 household expenditure survey covering more than 10,000 Ukrainian households, merged with detailed supplementary information on regional level characteristics. While 2007 is particularly useful for analysis as it is the last year in which a uniform residential electricity tariff was applied, we examine earlier data as well as expenditure on water instead of electricity. Our initial results show that after controlling for socio-economic factors, dwelling characteristics and the stock of appliances, there are still statistically significant regional variations. We argue that this is due to differences in environmental awareness and sensitivity, rooted in Ukrainian history. We expect to find differences in regional environmental protection policies and actions including in regional forest reproduction activities.