District heating systems using cogeneration, as well as local fuel-based and electric heating systems for detached houses, are analysed. The analysis includes the whole energy system, from the natural resource to the end user, with respect to primary energy use, emission and cost. The end-use technologies studied are heat pumps, resistance heaters and boilers. It was assumed that the base-load electricity, except for the cogenerated electricity, was produced in stand-alone power plants using wood chips or natural gas, while peak-load electricity and fuel used for transportation were produced from crude oil. The heat pump and district heating systems are found to be most energy efficient, followed by the local fuel-based systems. The wood-fuel-based systems emit about one tenth of the greenhouse gases emitted by the natural-gas-based systems. The sulphur and nitrogen oxide emission, however, is higher for wood-fuel-based systems. Systems based on natural gas are less expensive than the corresponding wood-fuel-based systems. Decarbonization and carbon dioxide sequestration, however, do not reduce the carbon dioxide emission to the low level of the wood-fuel-based systems and, in addition, make the natural-gas-based systems more expensive than the wood-fuel-based systems. (C) 2003 Elsevier Science Ltd. All rights reserved.