The Right Nudge: Targeted Interventions to Accelerate the Technology Shift in Buildings

This briefing by RMI outlines a phased framework for building decarbonization in the United States and argues that financial institutions can accelerate the shift to zero-carbon technologies by using targeted interventions to make green options the cheapest, default choice.

• RMI proposes a five-stage framework for building decarbonization to reach absolute zero: first, removing emissions from inefficiencies; second, complete electrification to remove fossil fuels (NZC Ready); third, switching to renewable electricity (NZC); fourth, addressing embodied carbon in materials and construction (Absolute Zero); and fifth, achieving carbon neutrality, though the document notes that relying on carbon offsets for this is not a viable option for the 13 percent of US emissions coming from building operations.
• The transition to decarbonized buildings does not require new technological breakthroughs, as the necessary tools are already available. Instead, the goal is to move existing technologies up their learning curves to make them the cheaper, default choice for purchasers, rather than relying on persuasion to choose more expensive efficient options.
• Heat pump technology has become a superior alternative to natural gas furnaces in terms of reliability and health. The Inflation Reduction Act is expected to increase demand for heat pumps, which will drive down prices and help them become the industry standard.
• Large commercial office buildings in the United States can serve as a catalyst for broader decarbonization because they are already relatively efficient and use a lower percentage of fossil fuels than other real estate subsegments. If large office-specific real estate investment trusts move toward full electrification, the resulting demand signal will lower prices for these technologies, enabling adoption in smaller buildings and other sectors.
• Buildings that continue to use fossil fuel technology create future financial liabilities, as owners and tenants will eventually face retrofit costs when that equipment becomes obsolete. Installing replacement gas furnaces locks in volatile fuel choices and creates an embedded liability.

APA

RMI (2022). The Right Nudge: Targeted Interventions to Accelerate the Technology Shift in Buildings. https://rmi.org/resources/targeted-interventions-to-accelerate-the-technology-shift-in-buildings/

Chicago

RMI. The Right Nudge: Targeted Interventions to Accelerate the Technology Shift in Buildings. 2022. https://rmi.org/resources/targeted-interventions-to-accelerate-the-technology-shift-in-buildings/.

Wikipedia

{{cite report |author=RMI |title=The Right Nudge: Targeted Interventions to Accelerate the Technology Shift in Buildings |date=23 November 2022 |url=https://rmi.org/resources/targeted-interventions-to-accelerate-the-technology-shift-in-buildings/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022right, author = {{RMI}}, title = {{The Right Nudge: Targeted Interventions to Accelerate the Technology Shift in Buildings}}, institution = {RMI}, year = {2022}, month = nov, url = {https://rmi.org/resources/targeted-interventions-to-accelerate-the-technology-shift-in-buildings/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }