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Building decarbonization will be key to lowering emissions across Greater Chicago

Homes, businesses, and public buildings are central to Greater Chicago’s climate future.

Residential and commercial buildings account for 35 percent of the region’s greenhouse gas emissions, making the building sector the second-largest source of emissions in Greater Chicago. To meet the region’s climate goals, the Comprehensive Climate Action Plan for Greater Chicago calls for building-sector emissions to fall by 95 percent below 2005 levels by 2050.

Achieving that transformation would do more than reduce emissions. It could lower energy costs, improve indoor air quality, reduce long-term energy demand, and create healthier, more resilient communities.

Why building decarbonization matters

Building emissions come from two primary sources:

• On-site fossil fuel use, especially natural gas used for heating water and indoor spaces (approximately 60% of building emissions)
• Electricity consumption for lighting, cooling, equipment, and operations

Residential buildings — more than four million housing units across Greater Chicago — produce nearly half of these emissions. Commercial and institutional buildings — totaling more than two billion square feet — account for the rest.

The sector’s emissions have fallen by 18 percent since 2005, driven largely by a cleaner electric grid and stronger appliance and building standards. But continued natural gas dependence has limited deeper progress.

Most emissions from residential buildings are driven by natural gas use, while commercial building emissions are roughly split between electricity use and natural gas consumption.

Both existing buildings and new development matter

Greater Chicago’s building transition must address two realities at the same time: an aging building stock and continued demand for new construction.

Roughly half of the region’s housing units were built before 1969, often with lower insulation levels and older mechanical systems. Retrofitting these buildings is essential but can be costly and complex.

At the same time, the region is expected to add nearly one million new homes by 2050, along with significant commercial development. The efficiency, energy systems, and location and development patterns of new construction will shape emissions for decades to come.

State and local governments play a key role in building sector emission reductions

Unlike some sectors where action depends heavily on federal policy, building decarbonization is strongly influenced by state and local decisions. Governments across the region help shape:

• Building codes and energy standards
• Land use and development patterns
• Housing programs and affordability strategies
• Public building investments
• Utility program coordination
• Local permitting and retrofit processes

The climate action plan finds that state and local activities could deliver more than three quarters of the emissions reductions needed in the building sector by 2050 targeting emissions from cooking, space and water heating, lighting, refrigeration, and air conditioning.

State and local action could deliver more than three quarters of emissions reduction in the buildings sector

What the climate action plan calls for

The plan identifies several strategies to reduce building emissions while improving comfort, affordability, and resilience.

Accelerate electrification through heat pumps

Replacing fossil fuel heating systems with efficient electric technologies is critical. Heat pumps can provide both heating and cooling while using significantly less energy than conventional systems. To meet regional targets, Greater Chicago would need to install roughly 150,000 heat pumps per year, reaching more than 3.5 million installations by 2050.

While state action is critical to support incentives and advance requirements, municipalities and counties can promote heat pump adoption through public education, permitting reform, local incentives, public facility retrofits, and support for all-electric new construction.

Weatherize homes and businesses

Electrification alone is not enough. Buildings must also use less energy. Weatherization includes insulation upgrades, building-envelope and window improvements, efficient HVAC systems, and other measures that reduce heating and cooling demand. The climate action plan calls for weatherizing roughly half of all existing residences and most commercial buildings across the region.

States and utilities should implement large-scale weatherization programs to improve building envelopes and reduce energy use, while municipalities should work to expand access to retrofit programs, target support to low- and moderate-income households, and connect weatherization with housing preservation efforts.

Adopt building performance standards

Building performance standards establish long-term energy or emissions targets for existing large buildings and are emerging as one of the most effective policy tools for reducing emissions from commercial, multi-family, and public buildings. If broadly adopted, the climate action plan finds that building performance standards could significantly reduce building emissions by both 2035 and 2050.

Statewide approaches may offer consistency and administrative efficiency, while local governments can lead through benchmarking ordinances, pilot programs, and early adoption. Municipalities can require benchmarking, improve building energy transparency, and prepare large buildings for future performance standards.

Building strategies can deliver benefits beyond the sector

Improving building efficiency, electrifying heating systems, and adopting stronger performance standards are central to reducing emissions from homes and businesses. Building strategies can also help advance the region’s climate goals across sectors.

Where and how the region builds matters. Compact, walkable development can lower household energy use through smaller units and shared walls, reducing demand for energy and building emissions. Infill and transit-served development can shorten car trips, reduce car dependence, and increase transit use, lowering transportation emissions.

Local planning efforts and policies can also encourage rooftop solar, battery storage, EV charging, and other distributed energy resources that strengthen grid resilience and help meet growing electricity demand.

Because buildings shape energy use, transportation patterns, and opportunities for clean power, they represent one of the region’s greatest opportunities for coordinated climate progress.

Read the climate action plan to explore the complete strategy for clean, efficient, and affordable buildings across Greater Chicago.