• Jobs in construction have been hard hit by the crisis in housing finance. Total employment in the industry has fallen by 663,000 jobs since its peak in 2006. In October 2008, 10.8 percent of construction workers were unemployed – one of the highest rates of any industry.
• Rising energy bills are an increasing burden for all Americans but hit low‐income households particularly hard. This program would cut energy bills for low‐income households, whose average energy bill increased by more than 44% since 2001 (Average households in the US spent $1,817 in energy in 2005, the last year for which omprehensive data are available).
• Buildings consume 72% of all US electricity generation and are responsible for 40% of all US carbon dioxide emissions, a larger fraction than either the transportation or industrial sectors. It will be extremely difficult to reach the 80% reduction in CO2 called for in the President‐elect’s campaign without aggressively addressing building energy efficiency.
• The infrastructure for a major retrofit program is in place at the federal and state levels, and at utilities. Unemployed construction workers have the necessary skills and unskilled workers can be trained quickly. Jobs would be created where people live, and could not be outsourced.
• Retrofits that include federal funds would increase the value of homes in the program and provide quality assurance that would further increase home value.

The primary goals of these proposals include:

• Getting construction workers and newly trained retrofitters jobs within weeks of the
  availability of funds.
• Ensuring that the highest possible fraction of residential and commercial buildings is
  given energy retrofits at the time of sale.
• Encouraging retrofits up to the full cost‐effective level, at marginal utility avoided costs
  including a carbon price5 of $25/ton CO2, by combining federal funds with utility capital
  investment and home‐buyer contributions.

Read the full proposal here.

Current and proposed climate change policies focus primarily on setting minimum standards for new homes through building codes. The scope of energy use under consideration by cap-and-trade or carbon taxation schemes complicates inclusion of residential buildings: the emissions from one residence cannot serve as a commodity in the same market as electricity generating facilities. FAS has analyzed the possibilities for reconciling this difference, and has determined that retrofitting operations supported by utilities and included in emissions reduction mechanisms are a critical solution to the problems of energy consumption, cost, and emissions.

A system of residential energy efficiency improvements would enable cost-effective improvements financed by homeowners and utilities. Utilities would provide energy auditing services to establish the level of retrofit measures appropriate for homeowner and utility investment. Utilities are ideally situated to play a large role in retrofitting by providing low-cost energy auditing tools, up-to-date energy cost  summaries, performance data on retrofit options, and bulk purchase rates for improvements. In addition, utilities have a vested interest in retrofitting residences for energy efficiency because these improvements help utilities cope with rising demand and diminish the need for new plant construction. In order to improve residential energy efficiency and implement this policy, policymakers should consider the following recommendations as part of an overall approach to climate change mitigation:

• Climate change policy must include provisions to account for the environmental costs of inefficiency in existing residential buildings.
• National policymakers should help state public utility commissions decouple sales volume from profits, in turn providing uniform national promotion of energy efficiency.
• National policymakers should facilitate the implementation of a system of cooperative investment by homeowners and utilities in household retrofits to improve residential energy efficiency.

Read the full analysis here.