Building firms and green groups welcomed the budget announcement to spend £375m on energy efficiency in buildings over the next two years, but said it was much too little to kickstart an ailing construction industry and would barely reduce carbon emissions.

The chancellor Alistair Darling said that energy efficiency - stopping heat leaking out of buildings - was "the easiest and quickest" way to reduce carbon emissions and the benefits would be distributed between homes, offices and public buildings.

"These measures will support employment and save 380,000 tonnes of CO2 and around £60m in energy bills each year," said the full budget report. The UK emits 531m tonnes of CO2 a year, making the total savings 0.14%.

Greenpeace dismissed the measures as "woeful". "The emissions saved per year represent about two weeks' emissions from Radcliffe-on-Soar coal-powered station - Britain's third biggest power station," said the environment group's spokesperson.