We take a simulation-based approach for modelling ten scenarios, aiming at near-zero global CO2 emissions by 2050 in the residential heating sector, using different combinations of policy instruments. Their 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, which allows to simulate policy-induced technology transitions in a context of inertia and bounded rationality. Results show that a decarbonisation of residential heating is achievable until 2050, but requires substantial policy efforts from 2020 onwards. Due to long average lifetimes of heating equipment, the transition needs decades rather than years. Policy mixes are projected to be more effective for driving the market of new technologies, compared to the reliance on a carbon tax as the only policy instrument. In combination with subsidies for renewables, near-zero decarbonisation can be achieved with a residential carbon tax of 50-150Euro/tCO2. The policy-induced technology transition would increase heating costs faced by households initially, but lead to net savings in the medium term. From a global perspective, the decarbonisation largely depends on policy-implementation in Europe, North-America, China and Russia.
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