Project background:
The UK has committed to reaching net carbon zero emissions by 2050. One of the biggest challenges is the reduction of its carbon footprint from residential heating which currently exceeds the combined emission contribution of all petrol and diesel cars in the country. Climate Change leads to increasingly volatile weather which affects current and future heating and cooling demands. Policies to achieve net zero will likely involve rising energy costs and the setting of minimum energy efficiency standards for homes, as initiated in the UK in 2020. The PhD project “Climate Risks, Energy Efficiency and Mortgage Lending” aims to understand the financial risks arising from the climate-related changes in housing and mortgage markets. We will simulate future financial risks from the physical, i.e. weather, side of Climate Change, but also from future policies in the transition to net zero, such as carbon taxes and energy standards. The research will answer questions such as: is energy efficiency already priced into house valuations? Does this value difference between high and low energy efficient homes vary by local weather conditions? Has the introduction of minimum energy efficiency standards for rental properties in the UK in 2020 increased the value of energy efficient homes, and vice versa? How does the recent energy (price) crisis affect the valuation of residences with different energy performance levels? Has the financial pressure from strongly rising energy prices led to increased mortgage default among borrowers of less energy efficient homes, representing hardship for households and increasing financial risk for mortgage lenders? Will a future carbon tax lead to a drop in the price for less energy efficient homes and a rise number of households defaulting on mortgage payments? The project is conducted in a close collaboration between the Climate Risks team in the Market Directorate of the Bank of England and academics in the Department of Economics at Royal Holloway, University of London (RHUL). The studentship offers the exciting prospects of working at the frontier of academic research and policy recommendations.
How to apply for this studentship
You must first apply for a place to study at the university where the research project is based, noting that you are applying for the collaborative studentship. Please go to Royal Holloway, University of London here to find more details on how to make your university application.
You will then need to make a separate application for this collaborative studentship using the SeNSS online application platform. The link to the application platform and the notes to guide you through this process are available here.
Start date for study: 1 October 2023.
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