Many European nations are actively implementing strategies to reduce domestic reliance on fossil fuels for home heating. As part of these decarbonisation efforts, governments are reviewing how carbon taxes can be used to adjust the private cost of natural gas consumption toward its true social cost.
Domestic heating consumption has historically proven to be highly price inelastic. A 2022 market report by the Energy Transition Institute found that the price elasticity of demand (PED) for residential natural gas in Germany is -0.15 in the short run and -0.48 in the long run.
Question
Using the information provided, calculate the percentage change in price required to achieve a 4.5% fall in the demand for residential natural gas in the short run.
