Public policies to promote the diffusion of energy-efficient technology for providing energy services in residential and commercial buildings, which were introduced in the United States in the 1970s, are receiving new attention as a means of reducing carbon dioxide (CO2) emissions. Energy efficiency (EE) is currently undergoing a dramatic resurgence, stimulated by its potential contribution to CO2 emissions reduction. Concurrently, efficiency programs—particularly utility demand-side management programs and building codes—are continuing to expand in California and other states.
We show evidence that, for the residential sector, building codes over the 2010–2050 horizon are a potentially cost-effective way to reduce carbon emissions. We also suggest that R&D policies targeting accelerating improvements in appliance energy efficiency and lowering their installed price further drive down CO2 abatement costs and are a promising policy tool.