President's Better Buildings Initiative will deliver real value and is great news

If anyone needs evidence of a smart federal initiative, one with bang-for-the-buck, take a look at President Obama's Better Buildings Initiative. Today the President announced two new elements in the ongoing effort that will deliver budget savings, create new jobs, and reduce wasted energy -- and this will pay dividends to us all.

Let's look at each element separately.

1. Better Federal Buildings.

It makes a ton of sense to make energy-saving improvments in the thousands of buildings owned or occupied by the federal government -- the work SAVES money while also creating jobs. Yes, up-front capital is required to purchase and install equipment, such as better lighting controls, more insulation, better a/c motors, new thermostats, high efficiency windows, etc. But the up-front expense will be paid back in lower utility bills, instead of wasting taxpayers' money on bills for wasted energy. And, the improvements make the buildings more valuable and more comfortable.

Energy modeling tools and a large body of experience making similar improvements in other office space will allow the GSA to reliably identify which improvements will, in fact, provide a high return on the up-front costs. Moreover, our work with the GSA strongly suggests they have the leadership and experts in place to get the job done well.

The President went a step further, authorizing increased use of energy services firms to get the work done and to help finance it. This adds confidence that the investment in efficiency will deliver returns as commercial firms have their own capital at risk and brings additional expertise to the job. It also reduces the need for federal funding. It's a smart move, and in fact one that we suggested (along with others) to the Administration in an important report.

The positive spin-off effects are powerful -- new federal projects will nurture the growing industry of energy services companies, provide opportunities for new firms to earn new business, and increase the market for the controls and equipment that deliver energy savings.

As we verified in a study and report we did with PERI (supported by USGBC, RER, and NRDC), investment in building improvements can be a powerful job creator.

2. Corporate Commitments.

The President's has continued to push companies to focus on energy savings. One might ask why this is needed if, in fact, investments in efficiency pay for themselves. Wouldn't firms make all reasonable investments on their own?

The fact is that many firms today are making such investments. Companies that own or lease large amounts of real estate long ago saw the value in energy savings, and many firms today are improving their buildings on their own. The widespread use of LEED in commercial office buildings is one piece of evidence of this trend.

But, especially in existing buidlings, the gains from energy savings are often hidden and not recognized or not seen as a priority. A company might have the opportunity to save thousands of dollars a month by making a few repairs or improvements, but they are not building engineers. And companies might not look at leased space for these opportunities, even though it can make sense to fund such improvements if the lease term is beyond the pay-back period.

But the important fact is that the value of making buildings into high-performance buildings extends far beyond the company that owns or occupies the space. We all pay the costs when buildings waste energy. Utilities are forced to build new transmission lines and new power plants to deliver more power to buildings. Utilities burn more coal and gas and produce more pollution to produce that wasted power.

Making buildings into high-performance buildings pays dividends to the public. The President is right to push the federal government to improve and to push companies look more closely at how they can make their buildings perform better. This is leadership and smart government.