Abstract:Abstract: Based on externality theories and buildings’ energy efficiency theories, the externality of energy efficiency reconstruction was classified into different types from four aspects. Then, a set of formula were proposed for computing the externality of buildings’ enclosure structure reconstruction, heating networks and heating production plant reconstruction, and comprehensive reconstruction. The formula were used to compute the environmental externality of Kouan residential energy efficiency reconstruction project in Baotou city, and found that there was significant externality of energy efficiency reconstruction of existing buildings. The findings would be useful for governments at all levels to make economic incentive policies about energy efficiency reconstruction of existing buildings. Finally, the author studied the application procedure and cost benefit analysis about the externality of energy efficiency reconstruction of existing buildings.