It’s been tough going in the renewable energy business lately. Prices for solar panels have fallen drastically, which is good news for consumers, but not so good for solar manufacturers, who are struggling to survive. Some—like the much-maligned Solyndra, which went down earlier this year after receiving more than $500 million in government loan guarantees—won’t see 2012. That’s not a sign that renewable energy is doomed—investment in green power actually exceeded fossil fuels last year—but it is an unpredictable one. And after Solyndra, politicians might be a little gun-shy about appearing at renewable energy startups—as Vice President Joe Biden memorably did at Solyndra—for fear it could end up in a campaign ad for the other side if that firm ends up going belly up.
But there’s another area that provides much more reliable (and politically safe) returns on green investment: energy efficiency. And it’s here where President Obama seems to be focusing his efforts. This morning Obama—flanked by former President Bill Clinton, who has made green building a hobbyhorse—announced nearly $4 billion in combined federal and private sector energy upgrades to buildings over the next two years. The announcement is part of the Better Buildings Initiative, an effort spearheaded by Clinton that aims to make America’s buildings 20% more efficient by 2020, which could reduce costs for American businesses by some $40 billion.
From Obama’s speech
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Making our buildings more energy-efficient is one of the fastest, easiest and cheapest ways to create jobs, save money and cut down on harmful pollution. It’s a trifecta.
About half of that $4 billion will come from the government and will go to pay for energy upgrades to federal buildings. The rest will come from an array of private sector funding—including companies like 3M, Alcoa, GE and Southern California Edison—that will upgrade a minimum of 1.6 billion sq. ft. of office space by at least 20% by 2020. The plan builds on earlier commitments made by some of these same companies at a Clinton Global Initiative meeting earlier this year, as Clinton pointed out:
Investments in building retrofits and energy efficiency can make a real difference in the American economy, by creating jobs, growing our industries, improving businesses’ bottom lines, reducing our energy bills and consumption, and preserving our planet for future generations.
Obama was speaking from the Transwestern building in Washington DC, which he noted was undergoing retrofits of its own that will employ 250 full-time workers. As an employment play, energy efficiency upgrades are an easy win—contractors and building workers are employed to retrofit a building, and the upfront cost is covered by energy savings, as Jeff Zients, the federal chief performance officer and the deputy director for management at OMB told Politico:
The private sector takes all the risk here, so the federal government is not at risk for the investments. The bottom line is we will be keeping score and making sure we will have good implementation here.
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Gene Sperling, the director of the National Economic Council, told reporters that the program will create tens of thousands of jobs, with the University of Massachusetts releasing a study today that pegged job gains at more than 50,000.
Obama is right that energy efficiency improvements are a no-brainer—albeit a no-brainer that gets ignored far too often. One great example for how these upgrades can pay off is the venerable Empire State Building in New York City, which launched a major retrofit recently with the help of Amory Lovins’s Rocky Mountain Institute. The plan—which involves smarter lighting and much more efficient heating and cooling—will cost $13.2 million up front, but will save 35 to 40% on energy costs. That means the retrofit should pay for itself in just four years, with obvious environmental benefits.
In a world where it’s obvious that energy supplies will be increasingly squeezed, we have no choice but to become more efficient—and the U.S. has a long way to go. It’s true that some experts are skeptical about the ultimate environmental benefits of energy efficiency because of the rebound effect—the possibility that we will end up spending the money we save from energy efficiency on more energy, eroding those savings. But even if that does turn out to be the case—and it’s an open academic argument—the economic benefits of reducing waste are undebatable. At a moment when we’re desperate for economic and employment growth, not cutting energy waste is as stupid as not plugging a hole in a lifeboat.
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Bryan Walsh is a senior writer at TIME. Find him on Twitter at @bryanrwalsh. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME