While the economy seems to be fragile and teetering, political leaders and economic strategists fear one wrong move could bring it all down in pieces. Yet, President Obama seems steadfast in his belief that one must spend money to make money.
In his January 2011 State of the Union address, Obama announced the Better Buildings Initiative (BBI), a collection of policies and requirements that would bolster energy efficiency in existing buildings across the nation. It demands a 20 percent reduction of energy use in existing buildings by 2020. While its fate remains undecided as it awaits funding, a team of advocates has collaborated on a report, “A New Retrofit Industry,” that finds the BBI would not only save money in the long run by reducing nationwide energy costs, it also would give 114,000 Americans jobs. Of those jobs, 77,000 would be in the construction industry, which the recession hit particularly hard.
According to the report, released jointly by The Real Estate Roundtable, the U.S. Green Building Council (USGBC) and the Natural Resources Defense Council, and conducted by the Political Economy Research Institute of the University of Massachusetts at Amherst, the greatest effect of the BBI would be derived from a revised tax incentive to encourage building retrofits. The tax incentive is the energy-efficient commercial building tax deduction, which was signed into law as part of the Energy Policy Act of 2005. The original incentive was primarily designed to encourage energy efficiency in new construction, but the revisions would encourage improvements in the nation’s vast quantity of existing buildings to reduce energy usage.
Some consider the BBI a double-whammy of sorts, as it is designed to work for the economy in two ways.
“It helps create tens of thousands of good-paying jobs while making us more energy-efficient,” said Jeffrey D. DeBoer, The Real Estate Roundtable’s CEO and president. “Unemployment in the construction sector continues to hover above 16 percent. Lending is still difficult to come by in many markets, so financial incentives like these proposed by the White House will leverage private investment to help propel our cities and suburbs forward into a new energy economy.”
Others see the BBI as having more complex and far-reaching effects on the stability of the economy.
“The Better Buildings Initiative will achieve multiple benefits with an amplifying effect. First and foremost, the initiative will create green jobs,” said Roger Platt, the USGBC’s senior vice president of global policy and law. “This program will also lower energy consumption, reduce our nation’s dependence on foreign oil and allow America to retain its competitive edge in the international marketplace as a leader in constructing, retrofitting and operating high-performing buildings.”
This new report isn’t the first to tout the great effects the BBI might achieve. In 2009, McKinsey & Co., a global management consulting firm, issued a report that found a greater emphasis on energy efficiency might create 600,000–900,000 jobs across all sectors. In 2010, the American Council for an Energy-Efficient Economy found the now-defunct HomeStar program, aka “Cash for Caulkers,” might have created 333,000 jobs in retrofits and. And earlier this year, a University of California, Berkeley, report found existing energy-efficiency policies could create 200,000 new jobs by 2020.
But the fact remains that the economy is in one of its most sensitive states in decades, leaving some to question if now is the time for such investment.