Is France on track for decarbonizing its residential sector? Assessing recent policy changes and the way forward

This study assesses the long-term cost-effectiveness and distributional impacts of various energy efficiency policies to decarbonize the French residential sector. It does so using Res-IRF 4.0, a significantly enhanced version of a behaviorally- and technologically-rich model of residential energy demand in France. Our analysis reveals that deep decarbonization targets cannot be achieved with current policies. However, we demonstrate that the progressive implementation of new mitigation policies generates net socio-economic benefits. In particular, newly implemented direct subsidies that direct support toward low-income households and deep renovation outperform precedent attempts. Mandatory renovation for privately rented dwelling and carbon tax, plays a significant role in enhancing socio-economic balance. Finally, we illustrate that banning the adoption of new natural-gas boilers will significantly accelerate the transition to low-carbon fuels with social benefits outweighing additional costs. Our research highlights the importance of a multifaceted approach to reach climate and social objectives. Overall, by incorporating policy frictions in bottom-up modelling, we provide more plausible long-term policy assessments.