This paper assesses the effectiveness of the Tokyo Cap-and-Trade Program based on data obtained from 1,300 facilities covered by the programme and surveys of facility owners from the first compliance phase of the programme. Data indicate the program has worked effectively to reduce energy consumption in participating facilities to meet the ambitious emission reduction goals, to introduce new technologies, and to raise awareness and drive behavioral changes for energy demand reduction. The authors examine the programme as an alternative policy instrument to building energy codes in a portfolio of sustainable building policies, highlighting its unique capacity for driving deeper and longer-term improvements for more ambitious mitigation targets.