These incentives are a big winner for U.S. businesses and their competitiveness as well as the environment. Building owners and managers are already making low-cost adjustments to energy strategies in order to reduce operating costs and attract tenants by being ‘green.’
For example, our firm -- the nation's second-largest commercial property manager -- managed a retrofit at the Empire State Building that reduced energy consumption by nearly 40 percent, saving $4.4 million annually at an upfront cost of $20 million. Those kinds of results are not uncommon, as we are seeing at the dozens of other buildings where we have similar projects in the pipeline.
But for every owner with the resources to move forward, there are many more willing but unable to invest in retrofits. Owners face obstacles such as a lack of financing options and, occasionally, lease language impediments. Though some are able to overcome the obstacles and achieve substantial efficiencies, most cannot make the numbers work. The proposed incentives would allow thousands of companies to close the gap between what they want to do and what they can afford.
And reducing energy usage carries major societal benefits beyond slashing CO2 emissions. Improving efficiency is an economic driver. Companies that spend less on energy have more to spend on other things – like expansion and job creation. And the task of improving U.S. buildings involves hundreds of thousands of good-paying jobs that can only be done on-site—not sent offshore. Speaking of other countries, there is a strong case to be made for pursuing an energy policy that makes the U.S. simultaneously less dependent on foreign oil and a leader in exportable clean energy technologies.
So while the cost is minimal, the societal benefits are immense. Energy use reduction in commercial buildings offers by far the most effective way for Americans to reduce carbon dioxide (CO2) and other greenhouse gas emissions without making painful lifestyle adjustments. Buildings account for up to 40 percent of U.S. CO2 emissions – as much as all our vehicles – and by upgrading systems and making other improvements, most buildings could cut consumption by half without diminishing the comfort of occupants.
We and other Jones Lang LaSalle executives have discussed these issues with key members of Congress and the Obama administration several times in the past two years. Leaders from across the political spectrum recognize the value of energy efficiency from an environmental and economic standpoint.
Many companies agree. We're part of Business for Innovative Climate & Energy Policy (BICEP)—a business coalition that also includes Nike, Starbucks, Levi Strauss, Timberland, Target Corporation and Best Buy—pushing for national policies that promote energy efficiency and increased investment in a clean energy economy. President Obama’s proposal is a huge step in the right direction to make our vision a reality.
Lauralee Martin is Chief Financial Officer and Chief Operating Officer of Jones Lang LaSalle, and Dan Probst is the firm’s Chairman of Energy and Sustainability Services. As a leading real estate services firm, Jones Lang LaSalle conducts energy management, analyzes and implements retrofits and advises on other energy and sustainability actions in buildings around the world.