Bertrand Pluyaud
Nikki Kergozou
OECD Economic Surveys: France 2024
OECD Economic Surveys: France
Abstract
France will need to accelerate reductions in emissions to achieve ambitious green targets. Greenhouse gas emissions declined by 25% between 1990 and 2022. Average carbon prices are relatively high but uneven across sectors, with substantial implicit fossil fuel subsidies, particularly for farmers and fisheries. Accelerating the phase-out of these subsidies and tax expenditures while aligning prices across sectors will strengthen the effectiveness of carbon pricing. More effective sectoral policies, including across transport, buildings, industry, energy, farming practices and land use, will help reduce emissions and support biodiversity. Paying close attention to the political economy of green policies and supporting vulnerable groups will be key to their success. Planning the adaptation of the country to climate-related risks will help to reduce the associated uncertainty and costs.
France has set ambitious climate goals to reduce greenhouse gas (GHG) emissions but will need to accelerate abatement to reach its targets for 2030. In 2022, emissions excluding land use, land-use change and forestry (LULUCF) fell by 25% compared to 1990 levels, meeting France’s overall objective in its second climate budget, which had been revised down from the previous budget (Figure 4.1). However, the country did not meet all of its sectoral-level targets, with emissions increasing for energy industries and transport (Citepa, 2023[1]). Moreover, its EU target for renewable energy for 2020 remained unmet. The first estimation for 2023 shows a 4.8% decline in emissions, not including LULUCF, which meets the national target for 2023. To comply with EU climate law, France’s provisional national goal is to cut total GHG emissions to 270 Mt CO2-equivalent by 2030, representing a 50% reduction from 1990.
Historical and budgeted GHG emissions, Mt CO2-e
Note: The total excludes land-use, land-use change and forestry (LULUCF), which in France is a net carbon sink and therefore represents negative emissions. Mt CO2-e stands for million tonnes of carbon dioxide equivalent. Emissions for 2022 are an estimate. The 2030 target is a provisional goal. The SNBC-3 will put forward definitive carbon budgets.
Source: UNFCCC (2023), 2023 Submission by France to the United Nations Framework Convention on Climate Change, General Secretariat for Environmental Planning.
France has some of the most stringent environmental policies in the OECD. However, reinforcing the role of net effective carbon prices in sectors where prices are well-below the average carbon price and further developing mitigation policies across the transport, building, industry, renewable energy and agricultural sectors would support France to attain its climate goals.
France’s domestic emissions are relatively low compared to other countries, in part reflecting low greenhouse gas (GHG) emissions from electricity generation due to the high share generated from nuclear sources. Emissions produced in the country per unit of GDP were 140kg per USD 1000 compared to 230kg for the OECD average in 2021 (Figure 4.2, Panel A). Demand-based emissions, which include imports, are significantly higher than domestic emissions, although also remain below the OECD average (Figure 4.2,Panel B).
Note: Greenhouse gas (GHG) emissions include land-use, land-use change and forestry (LULUCF).
Source : OECD Environment Statistics database.
Significant progress in policies has been made in recent years, including related to previous OECD recommendations (Table 4.1). France’s climate goals have been set out in several laws, plans and strategies, which are governed at both the national and local level. France committed to carbon neutrality by 2050 in the 2019 Energy and Climate law (loi énergie-climat). The 2015 Law on the Energy Transition for Green Growth (loi relative à la transition énergétique pour la croissance verte) requires that climate budgets are set for five-year periods under the National Low-Carbon Strategy (Stratégie Nationale Bas-Carbone, SNBC). The third budget is due to be published in 2024 (Box 4.1). These carbon budgets are non-binding and are re-evaluated based on observed overruns. The Multiannual Energy Plan (Programmation pluriannuelle de l’énergie, PPE) sets out a general framework for long-term energy policies to support the SNBC. Since 2022, there has been overall coordination between environmental policies in line with a medium to long-term outlook under the France National Verte plan (Box 4.1).
The National Low-Carbon Strategy (Stratégie Nationale Bas-Carbone, SNBC) outlines the transition to a low-carbon economy across all sectors. It sets out a pathway for reducing greenhouse gases to achieve carbon neutrality by 2050. It establishes short-to-medium term carbon budgets and strategies to reduce the carbon footprint of French consumption, focusing on i) decarbonising energy through electrification and decarbonisation of electricity, ii) reducing energy consumption through efficiency and moderation, iii) reducing non-energy emissions, primarily from agriculture and industrial processes, and iv) improving carbon sinks. The third SNBC will be published in 2024 and will update the third and fourth carbon budgets (2024-2028 and 2029-2033) and establish the fifth budget (2034-2038).
Since 2022, France has been developing environmental planning led by the General Secretariat for Environmental Planning (Secrétariat général à la planification écologique, SGPE), which reports to the prime minister. The “Green Nation” (France Nation Verte) plan aims to determine tangible actions within a comprehensive, medium to long-term environmental transition strategy to reduce greenhouse gas emissions, adapt to the effects of climate change, restore biodiversity, decrease use of natural resources, and curb pollution that impacts health. The SGPE’s first plan, published in July 2023, highlights measures for reducing greenhouse gas emissions, aiming to enhance cross-sector synergies, improve resource allocation for environmental transition, and better involve citizens and businesses in these efforts.
The average stringency of France’s climate policies in 2022 was well above the OECD as classified by the OECD’s Climate Action Policy Measure Framework (6.2 out of 10 compared to 4.8 for the OECD average) (Nachtigall et al., 2022[2]; OECD, 2023[3]). The OECD’s Environmental Policy Stringency Index, which additionally covers water and air quality, also shows France’s policies in 2020 as amongst the most stringent in the OECD (Kruse et al., 2022[4]). However, while France’s plans are generally well-framed, defining priorities, actions and mobilising stakeholders, their monitoring and evaluation is often incomplete, with gaps in operational arrangements and timeframes (HCC, 2023[5]).
In addition to carbon pricing, other often sector-specific policy instruments, such as standards, bans, targeted adoption incentives and an intensified green R&D efforts will help address the range of environmental challenges that France is facing (D’Arcangelo et al., 2022[6]; Blanchard and Tirole, 2021[7]). In France, the transport sector is the most emitting sector, responsible for 30% of emissions in 2021, while the industry, building and agricultural sectors are responsible for smaller but similar shares of 21%, 18% and 16% of emissions (Figure 4.3). The relatively high share of transport and low share of energy generation differs substantially from some other OECD countries, largely due to France’s high share of nuclear energy in its energy generation.
Main sources of GHG emissions are also closely linked to pollution and the loss in biodiversity. As a result, success in curbing GHG emissions in these sectors will also bring benefits for air, soil and water quality and biodiversity. For example, agricultural land can help to store carbon dioxide, provide nitrogen and water to cultivated plants and regulate water quality. Limiting urban sprawl, as in France’s national biodiversity strategy, can reduce transport emissions and air pollution while supporting biodiversity and natural ecosystems.
The decline in emissions is uneven across sectors, with the industry and residential sectors significantly reducing their emissions, while those in the transport sector increased between 1990 and 2022 (Figure 4.4). In 2023, the General Secretariat for Environmental Planning published provisional targets for different sectors, updating those released in SNBC-2, in compliance with European climate law. While all sectors will contribute to meet France’s national climate objectives for 2030, emissions in the transport and building sectors will need to decrease sharply. Targets for the reduction in emissions in the agricultural sector are more modest.
Greenhouse gas emissions by sector, as a percentage, 2021
Note: Emissions source categories are defined according to the International Panel on Climate Change (IPCC) guidelines.
Source: OECD Environment Statistics.
Historical and projected GHG emissions, Mt CO2-e
Note: The total excludes land-use, land-use change and forestry (LULUCF), which in France is a net carbon sink and therefore represents negative emissions. Mt CO2-e stands for million tonnes of carbon dioxide equivalent. Emissions for 2022 are an estimate. The 2030 target is a provisional goal. The SNBC-3 will put forward definitive carbon budgets. Emissions source categories are defined according to the National Air Pollutant and GHG Emissions Inventory System, as defined by the French Ministry of the Ecological Transition and the Cohesion of Territories.
Source: Citepa, Greenhouse gas emissions inventory, Secten data, 2023 edition, General Secretariat for Environmental Planning; authors’ calculations.
Carbon pricing plays a key role in France’s climate policies. In Europe, the Emission Trading Scheme (ETS) determines a market-based price for carbon in some sectors (OECD, 2023[8]). In 2021, 21% of France’s emissions were covered by the EU Emission Trading Scheme (ETS) (OECD, 2022[9]). Overall, the average net effective carbon rate, which includes fuel excise and carbon taxes and fuel subsidies, increased from EUR 76.6 per tonne in 2018 to EUR 82.82 per tonne in 2021, well above the OECD weighted average (EUR 34.51 per tonne). At the same time, this is still lower than in several European countries (OECD, 2022[10]).
Despite the relatively high average carbon price, net effective carbon prices are highly uneven across sectors, with France continuing to offer some substantial implicit subsidies, particularly to its farmers and fisheries. Carbon pricing must be universal to reach its full potential (Blanchard and Tirole, 2021[7]). Uneven carbon prices result in varying abatement incentives and reduce the effectiveness of France’s climate policy (HCC, 2023[5]). Carbon is priced at EUR 228 per tonne in road transport, above the OECD and EU average, falling to EUR 41 per tonne in energy use excluding road transport and EUR 13 per tonne in agriculture and fisheries (Figure 4.5). In 2021, nearly 29% of all emissions were not subject to a positive carbon price, unchanged from 2018 (OECD, 2022[10]). From 2027, the European Union’s ETS 2 will cover emissions from fuels used in road transport, buildings and certain industrial processes not currently covered, which will establish a uniform carbon price across these sectors (OECD, 2023[8]). However, there is further scope to increase the effectiveness of France’s climate policy mix by aligning carbon prices and taxing polluting activities in line with their environmental impacts.
Average net effective carbon tax¹, EUR per tCO2, 2021
Note: 1. The net effective carbon rate is the net effect of fuel excise taxes, carbon taxes, permit prices and fuel subsidies.
Source: OECD Net Effective Carbon Rates (database).
Accelerating the phase-out of fossil fuel subsidies, including reduced rates and tax exemptions, would help better align carbon prices across sectors. France provided the highest amount of fossil fuel subsidies in the EU in 2021, at a total of EUR 11 billion, or 0.5% of GDP (European Commission, 2022[11]). France plans to gradually phase out tax exemptions in the construction sector by 2030. A similar goal for the agricultural sector was dropped in January 2024, against a backdrop of crisis in the sector. As allocated in the draft budget law for 2024, France plans to give out over EUR 1.6 billion in tax exemptions on fuel in agriculture and forestry, EUR 1.35 billion to diesel fuel for road haulage vehicles of at least 7.5 tonnes, despite diesel’s higher carbon content and EUR 780 million for non-road fuels outside of the agricultural sector (Ministère de l'économie, des finances et de la sourveraineté industrielle et numérique, 2023[12]). Coal-related fiscal expenditure was maintained at EUR 15 million for 2024. Non-green tax expenditures, whose classification depends on methodological choices, risk being even higher. In France’s “green budget” for 2022, the government estimated that it spent EUR 7.6 billion on non-green tax measures, and applying alternative methodological choices could have re-evaluated this number up to EUR 19 billion, including the effect of the exceptional price shield introduced to help households cope with the inflationary shock (I4CE, 2022[13]).
Paying close attention to the political economy of carbon pricing will be key for its success. Increasing public revenues is not the main objective of carbon pricing, which relies on a limited base and set to decrease. As carbon pricing falls unevenly on certain groups, it is also important to ensure that environmental policies are socially acceptable. In France, the 10% of households with the lowest incomes spend 22.2% of their income on energy in 2022, compared with 4.3% for the wealthiest 10% of households (Ministère de la Transition Energétique, 2023[14]). Channeling some of the potential revenues from carbon taxes back to households can help to cushion losses, particularly for low-income households (Immervoll et al., 2023[15]). This would also improve the political viability of carbon pricing. For example, Switzerland redistributes revenues from the CO2 levy to the population and towards green investment (OECD, 2024[16]). Two thirds goes directly to the population and the economy, with roughly one third of this going uniformly to all residents and the remainder going to companies, based on paid wages. The remaining third of the revenue is used to support energy-efficient renovations and heating systems using renewable energy sources.
One use of funds from carbon pricing is investment in the green transition, which will need to accelerate rapidly both in the public and the private sector to reach climate goals. Around EUR 66 billion of additional investment is estimated to be needed per year between 2021 and 2030 to meet emission objectives for 2030 compared to a business-as-usual scenario. This calculation includes eliminating EUR 35 billion of non-green investments (Pisani-Ferry and Mahfouz, 2023[17]).
Emissions in the transport sector increased by around 5.5% between 1990 and 2022. Road transport generates most emissions, divided across passenger cars (52%), heavy goods vehicles (25%) and light commercial vehicles (15%) (HCC, 2023[5]). Emissions will need to decline by around 29% between 2022 and 2030 to meet provisional climate goals. Overall, the sector is estimated to need an additional EUR 3 billion of investment per year, with an additional EUR 32 billion of green investment partly funded by an elimination of EUR 29 billion of non-green investment (Pisani-Ferry and Mahfouz, 2023[17]).
France’s low-carbon mobility strategy, part of the Green Nation plan (Box 4.1), focuses on using less energy-intensive modes of transport and promoting transport efficiency. It sets goals for various types of transport, relying on investment measures, fiscal incentives and information campaigns.
Boosting the carbon efficiency of cars through the large-scale deployment of electric vehicles is a key component of the country’s mobility strategy, which targets 15% of vehicles being 100% electric by 2030, compared with 1.2% in 2023. France is using a number of levers, including subsidies to convert internal-combustion-engine vehicles to electric and an environmental bonus/malus scheme providing subsidies for the purchase of low-carbon vehicles, along with a tax on the purchase of polluting vehicles. It also provides for deployment of recharge points nationwide. The number of public charging stations per capita is still below the euro-area average (OECD, 2023[8]) and some remote areas remain relatively underserved. To support the deployment of charging stations, the government extended the ADVENIR programme, aiming to finance 175,000 recharge points by 2025 (ADVENIR, 2023[18]). Further developing the charging network will reduce barriers to the take-up of electric vehicles (ITF, 2023[19]). Closer monitoring of obligations to electrify commercial fleets of over 100 vehicles would also support the electrification of the car fleet while supporting the development of the second-hand market in coming years (HCC, 2023[5]).
Encouraging greater use of alternative modes of transport for people and active mobility will help to reduce transport emissions. There were around 571 cars per 1000 inhabitants in France in 2021, around the EU average (Eurostat, 2023[20]). France reduces the attractiveness of conventional car use through one of the highest rates of excise duty on petrol and diesel in Europe (OECD, 2023[8]). As recommended in the 2021 Economic Survey of France, congestion charges in large towns and cities could further disincentivise car use whilst the revenue could be used to invest in public transport (OECD, 2021[21]). This type of toll should focus on existing low-emission areas (Zones de Faibles Emissions, ZFE), which limit the use of the most-polluting vehicles. Taxes on road users could be a source of funding for local public transport, such as in the Île-de-France region (Cour des Comptes, 2022[22]). Aligning energy taxes on flights and trains more closely with their emissions could help to encourage the use of trains and reduce transport emissions.
The political acceptability of vehicle taxation and road pricing policies can significantly increase if coupled with policies that encourage alternative modes of mobility (OECD, 2021[23]; 2022[24]). The Green Nation plan promotes cycling, using public transport and car sharing. It also earmarks investment of EUR 2 billion between 2023 and 2027 to develop cycle paths and EUR 100 billion to develop railways by 2040. The 2023-2027 plan for cycling and walking (Plan Vélo et Marche), which includes efforts from local authorities, includes EUR 6 billion of investment to promote cycling. Continuing to limit urban sprawl can help reduce distances travelled and make walking, biking and public transport options feasible (OECD, 2021[21]; ITF, 2023[19]).
With heavy goods vehicles contributing to one quarter of transport emissions, shifting freight transport from road to rail is also key to reduce transport emissions. While in 2021 maritime transport accounted for around 64% of freight in France, slightly below the 68% in the EU, the share of freight transported by rail was lower (3.8% compared to 5.4% in the EU) and the share of road transport was higher (31% compared to 25%) (Eurostat, 2023[25]). Reducing the gap in fuel taxes between passenger and heavy vehicles, which is expected to cost around EUR 1.35 billion in 2024, would improve incentives to shift freight towards rail (Ministère de l'économie, des finances et de la sourveraineté industrielle et numérique, 2023[12]).
The building sector, responsible for 64 million tonnes of CO2-equivalent, or around 16% of emissions according to the measure used by national sources, would most efficiently reduce emissions by improving the insulation of buildings and moving from fuel and gas heating to heat pumps. The sector reduced its emissions by nearly 30 Mt CO2-equivalent between 1990 and 2022. This initiative and others will need to be repeated to achieve the provisional targets for 2030, which require a reduction of around 34 Mt CO2-equivalent. Around two-thirds of reductions are planned to come from reducing the use of oil- and fuel-fired boilers and around one-third will come from improving insulation. The reductions entail an investment cost of an additional EUR 21 billion euros in residential buildings per year by 2030 and EUR 27 billion in tertiary buildings (Pisani-Ferry and Mahfouz, 2023[17]).
France has several programmes to support and fund residential renovations, which were intensified for 2024, in part to encourage more comprehensive renovations. While France’s strategies provide a clear framework for action, they lack the evaluation and monitoring that would ensure that they meet their objectives (HCC, 2023[5]). The MaPrimeRenov’ renovation subsidy provides grants, with greater support for low and middle-income households and the Éco-prêt à taux zéro provides interest-free loans, up to a certain income threshold, to improve a dwelling’s energy performance. Alongside a goal of 200,000 complete renovations in 2024, a three-times increase from 2022, the government increased expenditure ceilings in some programmes, including the MaPrimeRenov’ renovation subsidy and zero-interest loans. These increases will reduce costs for low and middle-income households, covering up to 90% of costs for the lowest-income households and reducing the time to reach a positive return on investment for low and middle-income households. It also increased the income threshold for households to benefit from zero-interest loans. Support for comprehensive renovations represented only 1.7% of beneficiaries in the first six months of 2023 and the 2023 draft budget bill significantly boost the appeal of these projects (Comité d'Évaluation du Plan France Relance, 2024[26]). Consequently, the total budget for renovation subsidies was increased from EUR 3.4 billion to EUR 4.0 billion.
Despite significant public support, the up-front investment cost for low- and middle-income households can remain substantial share of income and require borrowing. The resulting high debt ratio for low-income households can remain a barrier, with total household debt increasing over the past decade and above the European average (see Chapter 2). Obtaining an interest-free loan includes many obstacles, including the complexity of the administrative procedures (I4CE, 2023[27]).
Training systems must also be ready to respond and continue to train and upgrade the skills in the various sectors involved, with the renovation sector estimated to require an additional 170,000 to 250,000 workers by 2030 (France Stratégie / Dares, 2023[28]; 2023[29]; HCC, 2023[5]).
The authorities continue to simplify programmes and services, although these remain complex. The Mon Accompagnateur Rénov’ programme provides an approved professional advisor to help define the project, provide advice on selecting contractors and administrative tasks and mobilise financing. Using its services is now compulsory to benefit from certain financial support, for example for a comprehensive renovation. In 2022, the existing France Rénov’ online platform became the single point of entry for public services and financial assistance for renovation projects, simplifying procedures. Centralising the numerous public support programmes in a single agency could further simplify the renovation process. There is also support for energy renovation of buildings. The REPowerEU proposal presented by France under the European Recovery and Resilience Facility (RRF) will partially fund this initiative, with expected effects as of the winter of 2023-2024.
The manufacturing industry was the sector that contributed the most to the fall in emissions since 1990, with a 1.5% decline per year on average, even though this drop in emissions coincided with the manufacturing industry’s decline from around 16% of GDP in 1990 to 10% of GDP in 2022. Nonetheless, first estimates suggest that the sector failed to meet its 2019-2023 carbon budget targets. Emissions will need to drop by 28 million tonnes of CO2-equivalent or 38% of their 2022 level to reach the provisional climate goals for 2030 (Figure 4.4). Manufacturing industries are subject to carbon prices in the EU ETS, though not all emissions are priced due to free allocations reducing effective coverage.
The government is collaborating closely with industry to develop a decarbonisation strategy and provide financial support. The 50 most polluting sites in France have published decarbonisation roadmaps and the France 2030 plan is providing EUR 5.6 billion to help attain these targets, which could be increased up to EUR 10 billion if decarbonisation targets are doubled (DGE, 2023[30]; HCC, 2023[5]). The development of carbon capture, use and storage (CCUS) solutions is an important part of this decarbonisation strategy, which is currently being drawn up on a national scale. The national hydrogen development strategy (Stratégie national pour le développement de l’hydrogène), funded under the France 2030 plan will develop the use of low-carbon hydrogen in industry. While several climate-related strategies aim to support the reallocation of workers and promote workforce skills, the short time frame and careful planning required combined with the skills shortages that have surfaced in recent years will pose a challenge.
The Green Industry Law (loi industrie verte) aims to support a reindustrialisation of the economy in sectors required for the green transition and for France to become a European leader in green industry. The bill simplifies administrative procedures and facilitates factory openings, particularly supporting industry in wind power, photovoltaics, heat pumps, batteries and low-carbon hydrogen. The law provides tax credits of up to 40% for investments, aiming to trigger EUR 20 billion of investments by 2030, as well as loans or guarantees for firms for green investment. The law also gives the State control to exempt projects of “major national interest” from the Environmental Code, which is normally the responsibility of local authorities. These are projects deemed to make a significant contribution to sovereignty or the green transition. While this clause may help provide more certainty for firms it may take local environmental issues less into consideration.
Continuing to expand renewable electricity sources will be one pillar of decarbonising energy generation and will also support energy security. This would also help accommodate greater demand for electricity due to greater use of electric vehicles and heat pumps.
Already, the 36% share of nuclear energy in total primary energy supply results in relatively low emissions from energy (Figure , Panel A). France also reduced electricity produced from coal, which is entirely imported, by 81% between 2010 and 2020 (IEA, 2021[31]). The last two French coal-fired power plants were initially due to be closed in 2022. They are now scheduled to be converted to biomass production by 2027, which will help France achieve its emissions targets.
However, France is yet to reap the full potential of renewable energy sources to aid the climate transition. The share of primary energy supply from renewables has increased gradually over the past decade, catching up with the OECD average in recent years but remaining well below the EU average (Figure 4.6, Panel B). The share of renewables in gross final energy consumption reached 21% in 2022, below its 2020 EU-level target of 23%, and below the 2021 EU average (Eurostat, 2023[32]). While there was an unprecedented installation of renewable energy production in 2022 (RTE, 2023[33]), France will likely remain below its targets for 2023 (HCC, 2023[5]).
The transition to low-carbon energy must be accelerated to ensure France's decarbonisation and energy security. Replacing fossil fuels with low-carbon energy means massively accelerating investments in renewable energies. Decarbonising the energy mix could also involve stepping up nuclear production, which does not suffer from fluctuations related to weather conditions like sun and wind energy and can provide a constant base load of electricity, guaranteeing a certain degree of security of supply. The French government therefore reversed earlier plans to reduce the share of nuclear energy production, renationalised the electricity utility EDF in 2023 and began investing in extending the existing fleet and building new high-power reactors (EPR). In November 2023, the government announced an agreement with EDF on the regulation of nuclear electricity prices, which will replace the preceding ARENH agreement, consistent with EU state aid rules and consistent with allowing EDF to finance new investments in nuclear power capacity.
France is building a new Industrial Centre for Geological Disposal, scheduled to open in 2035, where waste will be stored in drifts hollowed out 500 metres below ground. The costs of decommissioning nuclear power plants and restoring land on former sites are still uncertain, and the process may take between 20 and 25 years (Cour des Comptes, 2020[34]). This cost will need to be factored into economic choices about future energy supply.
France must continue to diversify its energy mix and sources of supply against a backdrop of increasing climatic events and geopolitical tensions, while ensuring that its energy security is maintained over the long term. For example, there were several intense heatwaves and a historic drought in the 2022 summer, which made it necessary to impose temporary regulations on thermal discharges into rivers from several nuclear power plants (Autorité de sûreté nucléaire, 2022[35]). This has resulted in some nuclear power plants having to reduce their output and also in a reduction of hydroelectric production (RTE, 2023[33]). Around 99 % of French uranium imports came from five countries in 2023 –Niger, Kazakhstan, Namibia, Uzbekistan and Australia (OECD calculations according to DGDDI (2024[36])). In addition, some fuel services like uranium enrichment and conversion of reprocessed uranium have been imported. France has large stocks of uranium, equivalent to around 10 years of consumption. Nevertheless, these risks will have to be managed with caution.
In recent years delays in obtaining permits, land constraints and long wait times have deterred investment in renewable energy, with development timelines reaching double those of neighbouring EU countries (IEA, 2022[37]; IEA, 2023[38]). Obstacles in developing wind power have been the main cause of delays (Cour des Comptes, 2023[39]). Renewable energy auctions were undersubscribed by around 40% in 2023. Regulatory procedures have been simplified in recent years, cutting the processing time of authorisation procedures by two years (Cour des Comptes, 2023[39]). In a welcome move, the government implemented the Renewable Energy Acceleration Act in early 2023 (Box 4.2). The law aims to remove all obstacles that delay the deployment of renewable energy projects, including simplifying procedures, streamlining permit delivery, shortening connection delays and enhancing citizen participation.
Note: Total primary energy supply is energy production, plus energy imports, minus energy exports. Data for 2022 is provisional.
Source: OECD Green Growth Indicators Database; IEA (2023), World Energy Balances (database).
The Renewable Energy Acceleration Act (Loi d’accélération de la production d’énergies renouvelables) of March 2023 is structured around four pillars, including speeding up administrative procedures without compromising on environmental requirements, accelerating the development of offshore renewable energy production facilities, improving the financing of renewable energies and introduce value-sharing mechanisms and developing regional planning for renewable energies led by local elected representatives.
The Act simplified access to degraded land, which is already artificialised or does not present any major environmental challenges, such as car parks, or the edges of motorways. This simplification included empowering local authorities to create preferred “go-to” and “no-go” areas for the development of renewable energy (IEA, 2023[38]). The government has developed a mapping tool that provides information to local authorities and the public on the development of renewable energies in their region. A portal also provides local authorities with data on renewable energies in their area and the potential for their development.
Source : Ministère de la Transition Écologique et de la Cohésion des Territoires (2024[40]) and IEA (2023[38]).
The agriculture sector must gradually shift to more sustainable practices to reduce its GHG emissions and preserve biodiversity. GHG emissions must fall by around 11% between 2022 and 2030 to achieve provisional national targets. Reductions will be most efficiently reached by decreasing cattle numbers, reducing emissions from agricultural machinery, engines and boilers and improving manure management and reducing the use of fertilisers (IEEP, 2022[41]). France’s National Strategic Plan 2023-2027 to implement the European Union’s Common Agricultural Policy (CAP) allocates EUR 12 billion of France’s total around EUR 50 billion CAP budget to interventions contributing to green objectives (IEEP, 2022[41]). The Climate and Resilience law sets a goal for 8% of agricultural land to be used for legumes by 2030. In addition, the National Plant Protein Strategy (Stratégie nationale sur les protéines végétales) encourages citizens to consume more plant protein, including through a planned consumer campaign and enable farmers to feed their animals more self-sufficiently (FranceAgriMer, 2023[42]). Given that the carbon footprint of food consumed in France is twice as high as the nation’s agricultural sector (Li et al., 2022[43]), accompanying measures to green the agricultural sector with those promoting more sustainable diets would avoid an increase in emissions-intensive imports.
To trigger the structural changes needed to meet climate goals, France’s CAP National Strategic Plan mainly focuses on reducing emissions from crop production (IEEP, 2022[41]; HCC, 2023[5]). While cattle numbers have been falling due to declining profitability in the sector, numbers will need to fall significantly further to meet France’s methane commitments (Cour des Comptes, 2023[44]). Around 93.6% of methane emissions from cattle farming are a result of enteric fermentation and only 6.4% are from livestock manure. This suggests that an improvement in manure management and genetic progress will help, but the main driver of declines in methane emissions is cattle numbers (Cour des Comptes, 2023[44]). The National Strategic Plan aims to revise the criteria for coupled support for cattle to encourage deintensification and enhance the resilience of grassland farming systems.
Specifying reduction targets and the precise sectors in which these will occur, would help to clarify France’s contribution to the Global Methane Pledge (HCC, 2023[5]). Additionally, some climate indicators in the National Strategic Plan for the CAP do not consider their final impact on emissions. For example, increasing grassland areas could actually raise GHG emissions if it leads to more livestock emitting more GHGs than grasslands can sequester (Cour des Comptes, 2023[44]). As outlined in the 2021 Economic Survey of France, reallocating support for farmers towards payments for agro-environmental services would better support achieving climate objectives and improving the design of these payments could also enhance their effectiveness (OECD, 2021[21]). The political economy of such reforms must be considered carefully.
The amount of carbon stored by carbon sinks in the land use, land-use change and forestry (LULUCF) sector was 17 Mt of CO2-e in 2021, totalling around 4% of emissions. However, this is not even half of the 41 Mt of CO2-e that had been projected in the SNCB 2 climate budget. Reversing the sharp decline in forest carbon sinks since 2013 due to increased forest mortality, reduced tree growth and increased harvesting will require large-scale action to regenerate forests and meet 2030 targets (HCC, 2023[5]).
To support a reduction in emissions and support natural ecosystems, France’s national biodiversity strategy (Stratégie nationale pour la biodiversité) includes a target of zero net artificialisation (Zéro Artificialisation Nette, ZAN) by 2050: for one additional artificialised hectare, one hectare is restored to its natural state, with land deemed “artificialised” when it is waterproofed, built-up or paved. This strategy follows a 72% increase between 1982 and 2018, the year in which it was announced (HCC, 2023[5]). This goal requires local and subnational jurisdictions to reduce the consumption of natural, agricultural and forest areas by 50% by 2030, compared to the rate between 2011 and 2020 (OFB, 2023[45]). However, achieving this goal would be easier with a clear operational strategy to back it up (HCC, 2023[5]).
France faces several hazards related to climate change, notably as a result of higher temperatures, higher rainfall in some areas and less in others, stronger winds, or rising sea levels. The number of days of extreme heat has considerably increased in recent years (Figure 4.7.). The number of wildfires has strongly risen over the past decade. Wildfires burnt 35,500 hectares per year on average between 2019 and 2023, 4.4 times the surface burnt on average between 2014 and 2018 (EFFIS, 2023[46]). Agricultural drought has worsened, with cropland soil moisture 3.9% lower on average in years 2018-2022 compared with 1981-2010. However, precipitation has increased overall, and 13.5% of the population is exposed to river floods on average every ten years or more (OECD, 2023[47]). Finally, more than half of the population has been exposed to windstorms over between 2018 and 2022 (Maes et al., 2022[48]).
Efficiently planning the responses to consequences of the climate change can reduce uncertainty and related costs. In 2006, to prepare for climate-related hazards, France drew up a National Climate Change Adaptation Strategy. In 2018, it released its second National Adaptation Plan (PNACC2) (ONERC, 2018[49]). This plan, implemented in 2018, precedes the third National Adaptation Plan (PNACC3), which will be published in the second half of 2024 to take into account the rapid evolution of climate-related risks.
France has a specific insurance scheme for covering damage linked to natural disasters, based on a partnership between the State and insurers. This scheme comprises reinsurance and a guarantee of last resort from the State, which keeps insurance premiums at moderate levels. Insurance industry estimates put the cost of climatic events at 143 billion EUR over the period 2020-2050, almost double the 74 billion EUR damages during the period 1989-2019 (France Assureurs, 2022[50]).
Given this sizeable increase in damage volumes, a first step would be to inform citizens and political and economic decision-makers about all the risks linked to climate change, so that they can take more informed choices and limit the overall burden on the economy. There is clearly scope for progress in this area: according to an opinion survey, half of the people questioned considered themselves poorly informed about the natural risks that could affect their living area (Harris Interactive pour Assurance Prévention, 2022[51]).
Population exposed to hot days (%)
Note: The above chart does not include the percentage of the population not exposed to any hot days in summer. Indicator developed in partnership with the International Energy Agency.
Source: OECD IPAC Climate Action Dashboard, OECD (Maes, M. J. A., et al. (2022), ‘Monitoring exposure to climate-related hazards: Indicator methodology and key results’).
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