construction, and operation of commercial buildings in the United States. A larger fraction of commercial
buildings have central building control systems. However, few diagnostic tools are available commercially
beyond those used for air balancing or tools integrated into equipment.
31
Some improvements in energy efficiency are projected by the EIA to occur by 2015 through the
operation of market forces assuming that fuel prices rise according to EIA projections. These improve 
ments are partly a function of  learning curve  or  induced innovation  effects that is, reductions in the
cost of new technologies and improvements in their performance that reflect economies of scale, learning
over time, and rising energy costs. For energy using consumer durables (such as refrigerators, room air
conditioners, washing machines, and dryers), Newell and coauthors estimate that the learning curve
results in an average decrease of 1.5 percent of costs per year.
32
As discussed later in this report and as
articulated by others, policies can produce additional  induced technological change,  thereby lowering
the cost of reducing GHG emissions.
33
The actual market uptake of energy efficiency improvements depends on many factors. The
market success of most new equipment and appliances is virtually ensured if the efficiency improvement
has a three year payback or better and amenities are maintained; technologies with payback of four to
eight or more years also can succeed in the market, provided that they offer other customer valued
features (e.g., reliability, longer life, improved comfort or convenience, quiet operation, smaller size, and
+
lower pollution levels).
34
The result is a forecasted annual increase in energy consumption over the next decade of only 
1 percent in residential buildings and 1.7 percent in commercial buildings or an overall annual rate of
increase of 1.3 percent for the building sector. Over the same period, energy supplies are anticipated to
become somewhat more carbon intensive. The combination of these energy consumption and production
trends is a forecasted rate of increase in GHG emissions of 1.1 percent annually in the residential sector
and 1.9 percent annually in the commercial sector or an overall annual rate of increase of 1.4 percent. 
+
Studies suggest that significant improvements in the energy efficiency of buildings appear to be
cost effective, but they are not likely to occur without extensive policy changes.
35
The Scenarios for a
Clean Energy Future, for example, estimates that 10 years of moderate to more aggressive policy interven 
tions could cut the annual growth rate of energy consumption in buildings to 0.5 percent.
36
A second
15
Towards a Climate Friendly  
Built Environment
+
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