Hidden among the news hype of the Super Bowl last week was an announcement by the Obama administration of a new spending program titled the Better Building Initiative (BBI). The purpose of the program is “improving energy efficiency in our buildings [to] create jobs, save money, reduce our dependence on foreign oil, and make our air cleaner.” It really amounts to one more subsidy in the service of President Obama's energy preferences.
The program sets up a fund for guaranteed loans for companies that want to retrofit their buildings to fit some as yet undefined standard of energy efficiency. Of course with a guaranteed loan it doesn’t matter what the standards are, a company knows that it can take the money and if it doesn’t pay back the loan, the taxpayer gets the bill. It’s a win-win for the company.
The program also includes a measure called Race to Green, similar in style to the Obama's Race to the Top education program. Like Race to the Top it offers financial awards and assistance to the top states that manage to create a more create a more green atmosphere. And if Race to Green continues to work in the same fashion as Race to the Top, states that place near the top in the competition will receive Federal funding. This is a case of the federal taxpayer subsidizing overspending by the state taxpayer on projects that will not save enough energy to be economically worthwhile.
On a recent trip to Penn State, in part to promote the BBI, the President mentioned to a small meeting of students in regards to clean energy, “we got to have a government that’s funding the basic research. We got have to have businesses that are willing to take risks and entrepreneurs out there figuring out how to use that basic research.” But there is no risk here -- government has seen to that. This is simply companies taking advantage of government handouts. The companies lining up to support the bill are the same companies that stand to make millions, if not billions, off of the loans and tax credits. In the White House release talking about the support for BBI, a number of the signees either hold major real estate interests or represent industries that would be heavily involved in retrofitting buildings.
No one really knows what the future of efficient affordable energy use is in this country. But by continuing to distort the market through artificial means such as the BBI, the government is trying to make the decision on the market's behalf. This is just as likely to push back development of a real new energy future as it is to hasten it. And a clear difference between BBI and doing nothing is that Obama's method is a lot more expensive for the taxpayer.