Mechanisms of Change
Because the building industry is fragmented, the challenges of promoting climate friendly actions
are distinct from those in transportation, manufacturing, and power generation. The multiple stakeholders
and decision makers in the building industry and their interactions are relevant to the design of effective
policy interventions. Major obstacles to energy efficiency exist, including insufficient and imperfect infor 
mation, distortions in capital markets, and split incentives that result when intermediaries are involved in
the purchase of low GHG technologies. Many buildings are occupied by a succession of temporary owners
or renters, each unwilling to make long term improvements that would mostly benefit future occupants.
Regulations, fee structures in building design and engineering, electricity pricing practices, and the often
limited availability of climate friendly technologies and products all affect the ability to bring GHG reduc 
ing technologies into general use. Some of these obstacles are market imperfections that justify policy
intervention. Others are characteristics of well functioning markets that simply work against the selection
of low GHG choices.
Numerous individual, corporate, community, and state initiatives are leading the implementation
of  green  building practices in new residential development and commercial construction. The most
impressive progress in residential green building development and construction is the result of communi 
ties and developers wanting to distinguish themselves as leaders in the efficient use of resources and in
waste reduction in response to local issues of land use planning, energy supply, air quality, landfill con 
straints, and water resources. Building owners and operators who have a stake in considering the full life 
cycle cost and resource aspects of their new projects are now providing green building leadership in the
commercial sector. However, real market transformation will also require buy in from the supply side of
the industry (e.g., developers, builders, and architects). 
Affordability, aesthetics, and usefulness have traditionally been major drivers of building con 
struction, occupancy, and renovation. In addition to climatic conditions, the drivers for energy efficiency
and low GHG energy resources depend heavily on local and regional energy supply costs and constraints.
Other drivers for low GHG buildings are clean air, occupant health and productivity, the costs of urban
sprawl, electric reliability, and the growing need to reduce U.S. dependence on petroleum fuels. 
Technology Opportunities in Major Building Subsectors
The technical and economic potential is considerable for technologies, building practices, and
consumer actions to reduce GHG emissions in buildings. When studying the range of technologies, it is
important to consider the entire building system and to evaluate the interactions between the technologies.
Thus, improved techniques for integrated building analyses and new technologies that optimize the overall
building system are especially important. In this report, homes and small commercial buildings and large
commercial and industrial buildings are analyzed separately for their energy saving and emission reduction
potential, because energy use in homes and small businesses is principally a function of climatic conditions
while energy use in large buildings is more dependent on internal loads.  
Towards a Climate Friendly  
Built Environment

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