Do energy efficiency mandates with distant deadlines speed up green investment, and at what cost to asset values? We study a French mandate requiring commercial buildings above 1,000 square meters to cut their energy consumption by 40% by 2030 compared with a past reference level. We exploit the size threshold in a regression discontinuity design and leverage novel administrative data on building characteristics, renovation permits, energy consumption, and transactions. In the five years following the enactment of the mandate, regulated buildings are 46% more likely to undergo a major renovation and reduce their energy consumption per square meter by 6% more than control buildings. These effects emerge after mandatory reporting made the policy credible and are concentrated among buildings approaching their normal renovation cycle. We find no significant effect on transaction probability or prices. A real options model with a non-compliance cost rationalizes these results: a sufficiently low non-compliance cost can bring forward the investments of owners already close to renovating without lowering building values.

We study the decision of manufacturing firms to invest in carbon-abating equipment. We do so by leveraging a one-billion-euro investment subsidy program aimed at fostering biomass-based energy adoption in the French manufacturing sector. Using rich data on eleven cohorts of subsidized projects, we show that subsidies cause green investment to increase, fossil fuel consumption to decrease and biomass consumption to increase. Conventional yearly plant-level CO2 emissions decrease by 21%, while activity remains unchanged. Many selected projects are eventually abandoned, which can partly be explained by energy price shocks and financial fragility. We assess the implied cost per ton of CO2 avoided, highlighting the role of interactions with emissions trading and alternative biomass carbon accounting assumptions.