ConstructionPro Week, Volume: Construction Advisor Today - Issue: 20 - 09/10/2009

McKinsey Report Touts Green Building as Key to Economic Recovery

Investing in the energy efficiency of buildings represents a powerful and strategic energy and climate solution that combined with other non-transportation initiatives could reduce the nation's energy consumption by 23 percent by 2020, save the U.S. economy $1.2 trillion, and reduce greenhouse gas emissions by 1.1 gigatons annually, said a study released by the management consulting firm McKinsey & Company.


"This confirms a critical path forward that we have long championed. Harnessing the engine of green, energy efficient buildings can cost-effectively drive tremendous improvements in our economy and environment," said Rick Fedrizzi, president, CEO and founding chairman of the U.S. Green Building Council. "Green building can stimulate the economy at a level one and a half times larger than the federal stimulus bill. In terms of climate change, a commitment to energy efficiency would be the equivalent to taking the entire U.S. fleet of passenger cars and light trucks -- more than 200 million vehicles -- off the road."
The report provides a detailed assessment of how much the nation can increase energy efficiency in buildings and other non-transportation sectors using existing methods and technologies. A targeted investment of $50 billion a year over 10 years, the report finds, would enable the entirety of those potential savings to be realized. Those reductions in energy use would save the U.S. economy $1.2 trillion, a return on investment of more than two to one. Furthermore, those investments would generate 900,000 jobs and reduce greenhouse gas emissions by 1.1 gigatons, according to the report, "Unlocking Energy Efficiency in the U.S. Economy," which was sponsored by the USGBC and 11 other organizations from the government, non-governmental and private sectors.



McKinsey's research finds that a comprehensive strategy, executed at scale, could reduce the annual non-transportation end-use energy consumption analyzed in this report from 36.9 quadrillion BTUs in 2008 to 30.8 quadrillion BTUs in 2020 - saving 9.1 quadrillion BTUs relative to a business-as-usual baseline.


"Increasing our nation's energy efficiency is an economic, environmental and national security imperative that requires bold public policy," Fedrizzi said. "As Congress debates climate change legislation, these findings make an overwhelming case that we must dramatically strengthen provisions that support and scale green building."


The energy efficiency potential cited in the report is divided across three sectors of the U.S. economy:

  • Industrial -- 40 percent of the end-use energy efficiency potential
  • Residential -- 35 percent
  • Commercial -- 25 percent
Solutions, drawn from a rich inventory of proven, piloted and emerging national and international examples, show that maximizing the energy efficiency potential from any single opportunity -- weatherizing homes, utilizing efficient air conditioners, or employing combined heat and power generation -- requires addressing multiple barriers simultaneously.



"By leveraging existing green building approaches, like LEED, which is rooted in holistic and integrated design, we have the ability and capacity now to address multiple barriers, and thus generate additional resource efficiencies and cost savings," Fedrizzi said.


The report calls for an integrated national plan guided by five principles:

  1. Recognize energy efficiency as an important energy resource that can help meet future energy needs, while the nation simultaneously develops new no- and low-carbon energy sources.
  2. Formulate and launch -- at national and regional levels -- an integrated portfolio of proven, piloted and emerging approaches.
  3. Identify methods to provide the significant upfront funding.
  4. Forge greater alignment among utilities, regulators, government agencies, manufacturers and energy consumers.
  5. Foster innovation in the development and deployment of next-generation energy efficiency technologies to ensure continuing productivity gains.

In addition to the USGBC, the report was also sponsored by Austin Energy, Department of Energy (Office of Electricity Delivery and Energy Reliability, Office of Energy Efficiency and Renewable Energy), DTE Energy, Energy Foundation, Environmental Protection Agency, Exelon Corporation, Natural Resources Defense Council, PG&E Corporation, Sempra Energy, Sea Change Foundation, and Southern Company. 




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