Demand- and supply-side barriers to Zero-Interest Green Loans in France

An increasing number of countries across Europe have implemented zero-interest green loan (ZIGL) programmes to encourage home energy renovation, frequently considered as one of the most cost-effective carbon dioxide emission reduction measure. France has taken such an initiative in 2009 ans its Eco-prêt à taux zéro programme is now funded by the sovereign green bound issued in 2017. Yet, while the Government initially planned to subsidize 400,000 ZIGL annually - a target deemed economically feasible in recent modelling work (Giraudet et al., 2018a) -, only about 40,000 are actually issued. What causes such a dramatic under-performance of the French ZIGL programme? Why do homeowners apply so little for ZIGLs? Why are lenders seemingly reluctant to invite borrowers to apply? Our project aims to disentangle demand- and supply-side barriers to ZIGLs by applying state-of-the-art empirical methods.