"Better Buildings Initiative" and "Innovation Cluster" Announced By President Obama [Updated] Obama's New "Better Buildings Initiative" Is Long Overdue, and Will Save Us Billions

President Obama's new initiative makes lots of sense: Commercial buildings account for 20 percent of the energy consumed in the country.

[Updated with video of the talk: 2/8/2011] President Obama just wrapped up a speech at Penn State University where he announced the creation of a "Better Buildings Initiative" to incentivize weatherization and energy efficiency retrofitting for commercial buildings. This is good news considering that commercial buildings currently account for roughly 20 percent of the energy consumed in the whole of the U.S. economy.

The president emphasized that efficiency means less costly waste, and that the aim of the program would be to make commercial buildings 20 percent more efficient nationwide. This would reduce companies’ energy bills by about $40 billion a year, money that could be much better spent on hiring new employees and expanding business.

Here's the full, five-point plan (as outlined in the press release):

  • New tax incentives for building efficiency: Transform the current tax deduction to a more generous tax credit.
  • More financing opportunities for commercial retrofits: A new Department of Energy pilot program will offer loan guarantees for efficiency upgrades at schools, hospitals, and other commercial buildings. The Small Business Administration will also be working with lenders to raise limits on loans when they're designated for energy efficiency improvements.
  • Race to Green” for state and municipal governments that streamline regulations and attract private investment for retrofit projects: Modeled after the "Race to the Top" competitive grant structure, the president's budget will offer grants to state or local governments who do the most to streamline building codes and standards for commercial energy efficiency, as local red tape is often the biggest hurdle.
  • The Better Buildings Challenge: The president is challenging CEOs of companies and presidents of universities to make their institutions more energy efficient. Technical assistance, public recognition, and other benefits will reward leaders who join the effort.
  • Training the next generation of commercial building technology workers: Launching a "Building Construction Technology Extension Partnership" modeled on the successful Manufacturing Extension Partnership in the Department of Commerce, and providing more "green collar" workforce training in energy auditing, building operations, and weatherization.
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The "Better Buildings Initiative" would apply to commercial buildings like offices and stores, and also to institutions and municipals buildings, universities, and hospitals.

The "Better Buildings Initiative" is good news, to be sure. But it's also one of those no-brainer, long overdue ideas. Of course energy efficiency is good for business. Of course less waste is good for the economy. Of course loans that finance projects that save operational costs are safe to guarantee. All of this is obvious. Yes, thank goodness leaders are recognizing that. A goal of 20 percent efficiency gains is modest, but it's an awfully good start. And when we're talking energy efficiency, proving the concept is the most important part. The rest will take care of itself, and I'd expect to blow by those 20 percent goals if this initiative is given any sort of fair chance.

The president also announced the formal kickoff of another new initiative, the "Greater Philadelphia Innovation Cluster," which represents a truly groundbreaking and novel form of inter-agency and interdisciplinary collaboration. The cluster, which will be led and coordinated by experts from Penn State, includes academic institutions, two Department of Energy labs, high-profile industry partners like IBM, and other federal and regional agencies, including Commerce and the Small Business Administration.

The Greater Philadelphia Innovation Cluster is something truly new and, well, innovative. So much opportunity is lost and progress halted in the walls between various governing agencies. GPIC, with its dedicated mission to breaking down these barriers and figuring out solutions and opportunities that work across all the divergent elements—small business, big business, energy, environment, housing, research and development—could prove a hugely valuable model for public-private collaboration in the technical innovation process. It will be fascinating to watch GPIC grow.

Update: Here's video of the talk.


Official White House Photo by Samantha Appleton

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