Combustion air for gas water heater – GreenBuildingAdvisor

I have a Bradford White RG2PV75H6N19 Power vent gas water heater installed in a basement (climate zone 5A). It looks like the combustion air is coming from a duct that is connected to the outside and just empties into an open vent in the ceiling.

I’m not thrilled with the idea of having an open duct that allows unconditioned air into the basement unregulated. Is there anyway to make this setup more energy efficient? I was thinking about finishing the basement and isolating the gas water heater and furnace into its own room and installing interior insulation the walls surrounding the room. This way I could perhaps isolated the effects of the unconditioned air in a confined space. For reference, the furnace is gas powered as well, but gets combustion air through a pipe that is connected directly outside.