President Obama Announces $4 Billion Investment
President Obama announced nearly $4 billion in combined federal and private sector energy upgrades to buildings over the next 2 years. The White House states that these investments will save billions in energy costs, promote energy independence, and, according to independent estimates, create tens of thousands of jobs in the construction sector. The $4 billion investment includes a $2 billion commitment, made through the issuance of a Presidential Memorandum, to energy upgrades of federal buildings using long term energy savings to pay for up-front costs, at reportedly no cost to taxpayers. In addition, 60 CEOs, mayors, university presidents, and labor leaders committed to invest nearly $2 billion of private capital into energy efficiency projects; and to upgrade energy performance by a minimum of 20% by 2020 in 1.6 billion square feet of office, industrial, municipal, hospital, university, community college and school buildings. This announcement builds on a commitment made by 14 partners at the Clinton Global Initiative America meeting in June to make energy upgrades across 300 million square feet, and to invest $500 million in private sector financing in energy efficiency projects.
The commitments were announced by President Obama and former President Clinton along with representatives from more than 60 organizations as part of the Better Buildings Challenge. The Challenge is part of the Better Buildings Initiative launched in February by President Obama, and is spearheaded by former President Clinton and the President's Council on Jobs and Competitiveness to support job creation by catalyzing private sector investment in commercial and industrial building energy upgrades to make America's buildings 20 percent more efficient over the next decade, reducing energy costs for American businesses by nearly $40 billion. Last year, commercial buildings consumed roughly 20 percent of all the energy used by the U.S. economy.
In a move the U.S. Chamber of Commerce has recognized as critical to job creation, the Presidential Memorandum calls for fully implementing existing federal authority to utilize Energy Savings Performance Contracts (ESPCs) in order to promote energy efficiency and create new jobs. Under the ESPC program, new energy efficient equipment is installed at Federal facilities at no up-front cost to the government. The cost of the improvements is paid for over time with energy costs saved on utility bills, and the private sector contractors guarantee the energy savings.
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