A retrofitting obligation for French dwellings - A modelling assessment[Modélisation d'une obligation de rénovation des logements français]

Retrofitting obligations are gaining traction among policy makers to overcome the sluggishness of energy efficiency improvements in residential buildings and the low effectiveness of most incentive programmes in changing this. Such an obligation was for instance the flagship proposal submitted by the Citizens' Convention for Climate to the French government. What are the costs and benefits of this little-studied measure? We examine this question using Res-IRF, a building stock model of French dwellings with endogenous retrofitting dynamics. We find that a retrofitting obligation is essential in allowing a net-zero energy target to be met in the residential sector. Crucially, the obligation makes up for the failure of most other programmes (subsidies, white certificate obligation, zero-interest loan, energy taxes) to trigger retrofits in private rental housing. As a result, the obligation is the most effective measure to eliminate the least efficient dwellings (EPC labels G and F) and its impact on energy savings and fuel poverty alleviation is twice that of all other existing measures combined. Against these benefits, we find the obligation to increase annual investment needs by 4 to 6 billion euros.