I received this question directly, but I prefer to answer it on the forum so it might be of use to others.

I live in climate zone 4 (non-marine). XPS rigid foam seems to be the most common recommendation for this area, but the cost has me continuing to research. Given that the air diffusion should happen inward, can I not put a polyethylene vapor barrier against the concrete foundation, and finish the walls with R13 FG batting and drywall? Polyethylene is only a slightly more impenetrable vapor barrier than 2" XPS, so mold should be no greater of a concern, right?

The perm ratings of 6 mil polyethylene, at .06 perms, and one inch of extruded polystyrene (XPS), at 1, are not even. close.

Six-mil polyethylene film is rated as impermeable to water vapour and one inch of XPS is classed as semi-permeable to water vapour. #

XPS and similar moisture-tolerant semi-permeable insulation materials are recommended for basements. They permit the inward movement of water vapour without being affected by it. By contrast, if you put poly on the walls, the water vapour may condense on the back of the poly and feed mould growth. (See Photo below.) One way builders were previously advised to avoid this was to leave the poly loose at the bottom of the wall and leave spaces under the baseplate so any water would run into the finished area and evaporate away. I can't imagine this was very successful.

In predominantly heating climates, the use of poly barriers on the warm side of the insulation was to prevent the winter problem of a moisture drive to the exterior above grade (warm moves to cold). However, in summer the drive reverses, especially in air-conditioned homes, leaving water vapour trapped in the insulation behind the poly.

The safest solution for basements in all but extremely cold climates is to use a moisture tolerant permeable insulation with no low perm barriers.

In your climate, as little as 3/4" XPS against the foundation wall may be effective to keep moisture from condensing in cold weather. Another approach is to use at least two inches of cheaper expanded polystyrene against the foundation wall.

To meet the International Energy Conservation Code minimums, you can add fibrous insulation between the studs, according to Building Science Corp. Because basements are also prone to bulk water leaks, many building experts, such as Martin Holladay, suggest keeping all fibrous insulation out of the basement.

Here is a link that might be useful: Building Science Corp.: Basements

This post was edited by worthy on Tue, Feb 26, 13 at 10:36