This study commissioned by the PAF, the IFC Excellence in Design for Greater Efficiency (EDGE) and the Energy Sector Management Assistance Program (ESMAP) and produced by Carbon Trust, aims to understand how a climate auction model based on the Pilot Auction Facility (PAF) could be used to catalyse energy, and resource efficiency in the residential building sector, focusing on new build developments. A qualitative review of six countries was carried out to inform the basic conditions that would need to be met for the climate auction mechanism to be successfully rolled out to the residential building sector. India was then selected as a case study to carry out a quantitative assessment of the potential impact of the mechanism.