A systematic framework for evaluating the local economic and environmental impacts of investment in building energy efficiency is developed. Historical residential building energy data, community-wide economic input-output data, and emission intensity data are utilized. The aim of this study is to show the comprehensive insights and connection among achieving variable target reductions for a residential building energy use, economic and environmental impacts. Central to this approach for the building energy reduction goal is the creation of individual energy models for each building based upon historical energy data and available building data. From these models, savings estimates and cost implications can be estimated for various conservation measures. A ‘worst to first’ (WF) energy efficient investment strategy is adopted to optimize the level of various direct, indirect, and induced economic impacts on the local community. This evaluation helps to illumine opportunities to establish specific energy reduction targets having greatest economic impact in the community. From an environmental perspective, short term economy-wide CO2 emissions increase because of the increased community-wide economic activities spurred by the production and installation of energy efficiency measures, however the resulting energy savings provide continuous CO2 reduction for various target savings.