The debate over the costs of climate protection policies still focuses on the question of whether strategies to significantly reduce greenhouse gas emissions at zero or negative net cost (＇no regrets＇ strategies) can be found. This article describes a carbon dioxide (CO2) reduction strategy for space and water heating in Austria relying on net present value analyses of 43 climate protection measures. The cost-benefit analyses include investment costs, the savings from energy conservation, the administrative costs of policy instruments and estimates of the external costs. An efficient CO2 reduction strategy was developed on the basis of energy supply curves which were adapted so that interactions between the CO2 reduction technologies could be considered. A cost-efficient CO2 reduction strategy could lower the CO2 emissions for the provision of space and water heating in Austria by up to 2.7% per year relative to the official ＇business as usual＇ scenario.