Residential and Commercial Sector

Why Focus on the Residential and Commercial Sector?

In the United States, the residential and commercial sector is the sector with the fourth highest greenhouse gas (GHG) emissions, emitting 12 percent of U.S. GHG emissions.    By convention it includes onsite GHG emissions only – from onsite or “direct” fuel combustion (mostly for space heating, hot water heating and cooking) as well as leaks of compounds used in refrigeration and air conditioning.  It is often referred to as the “residential and commercial” sector, even though emissions from residential and commercial electricity use are usually pulled out and included under the electricity sector.

What Makes the Residential and Commercial Sector Different in Terms of Reducing Carbon Emissions?

In the United States, most residential and commercial direct fuel use is the direct fuel use of natural gas, although there is use of oil and propane in this sector in the northeast, Midwest, and Hawaii. Increasing the efficiency of appliances and equipment, primarily hot water heaters and furnaces, reduces emissions.  Shifting from more carbon-intensive propane and oil to less carbon-intensive natural gas reduces emissions. Electrification, primarily using electric heat pumps, is a key option to the extent that the electric sector is decarbonized.  Onsite solar and geothermal heating are also potential solutions. Replacing conventional refrigerants with high GWP (Global Warming Potential) with lower-emitting refrigerants would also reduce emissions from this sector.

Residential and commercial emissions depend on the interplay of technology innovation, market forces, human behavior and public policy, and public policy happens at the federal, state and local level.  Key efficiency and electrification policy options include appliance and equipment efficiency standards; electrification incentives, and increasing technology innovation and investment in heat pumps and other heating technologies, and improving the performance and reducing the cost of alternative refrigerants that can be used in new and conventional systems.

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Block Grants to State and Local Governments

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National Adaptation Service

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Risk Screening and Disclosure

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Resource Management and Environmental Assessment

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Resilient Infrastructure Policy

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Federal Adaptation Capacity Building

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Equity in Adaptation

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Carbon Removal Tax Credits

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Resilience Incentives

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Carbon Pricing

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Carbon Removal RD&D

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Clean Energy Standards

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Clean Energy Tax Credits

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Federal Energy Innovation

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Labeling and Information

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Low-Carbon Finance

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Performance Standards (General)

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Tax Advantaged Financing Structures

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Technical Assistance for Businesses and Landowners

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