THE DEVELOPMENT OF THE COMPONENT-PERFORMANCE STANDARD BY THE AMERICAN SOCIETY OF HEATING, REFRIGERATION, AND AIR-CONDITIONING ENGINEERS, INC. (ASHRAE) IS DESCRIBED. THE SUBSEQUENT ADOPTION OF AN APPROACH THAT AND THE ROLE OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) AND THE DEPARTMENT OF ENERGY (DOE) IN IMPLEMENTING THIS APPROACH ARE EXAMINED. THE PAPER OUTLINES THE DEVELOPMENT OF THE NEW BUILDING STANDARDS BY THE AMERICAN INSTITUTE OF ARCHITECTS RESEARCH CORPORATION (AIA/RC) AND GIVES THREE CRITICISMS OF THESE STANDARDS. IT ALSO DESCRIBES THE DEPARTMENT OF ENERGY'S ECONOMIC STUDIES UNDERTAKEN TO DETERMINE THE LIFE CYCLE COSTS OF RESIDENTIAL BUILDINGS, THE REVISION OF THE HUD MINIMUM PROPERTY STANDARDS, AND THE DERIVATION AND EFFECTS OF WEIGHING FACTORS FOR FUELS. OTHER SUBJECTS COVERED ARE BEPS FOR RESIDENCES, STANDARDS FOR NONRESIDENTIAL BUILDINGS, AND SANCTIONS FOR STATES THAT DO NOT ADOPT BEPS OR ITS EQUIVALENT. THE AUTHORS SUGGEST THAT A MORE GRADUATED SET OF INCENTIVES AND PENALTIES FOR SUCH STATES SHOULD BE ADOPTED BY CONGRESS, INCLUDING TRAINING GRANTS FOR STATE AND LOCAL OFFICIALS, INCENTIVE PAYMENTS TO STATE BUILDING AGENCIES, EDUCATIONAL EFFORTS FOR THE NATIONAL CODE GROUPS AND VOLUNTARY ORGANIZATIONS, AND PARTIAL WITHHOLDING OF FEDERAL BENEFITS. (AOP)