How do I insulate my half below grade basement?

tom mckeand
Updated: Aug. 7, 2020

I am about to start a full strip out and rebuild of my basement to make a secondary suite. I've been reading all the information on the site and find it very useful (and educational). I am a carpenter from Scotland living in British Columbia now and as we tend not to have basements at home, I'm finding it a learning curve in building science! 
The building is over 100 years old with a half below grade (fully cured!) concrete basement. No exterior insulation, I'm guessing no exterior sealing. But dry dry dry inside. 
I like the idea of the 2" XPS with 4" studs and roxul insulation to give around r24 (local code). This is expensive and I'm not 100% on board because the basement is half above grade.

I have seen in the CMHC book a scenario where a vapour barrier starts on the concrete, just above grade height, goes down the concrete wall, under a 6" frame (with R24 roxul batts) and continues up the warm side of the studs (Studs kept off the wall obviously).

Is this a viable solution? Should vents be added to allow full air flow behind the insulation, like in a roof space? 
All my knowledge tells me this will be ok but I'm not a scientist.

Thanks in advance!

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