Power Magazine – How to Unleash the Climate Action Potential of the IRA

Throughout this past summer, we have seen some of the highest temperatures on Earth on record, and July was possibly the hottest month in more than a century. Wildfire smoke this year has blanketed the East Coast, marine heat waves have buffeted the Southeast, and Antarctic Sea ice has reached record lows.

Washington lawmakers can and should lead by example in reducing carbon emissions from federal operations. The federal government, the largest energy consumer in the U.S., has relied for decades on performance contracting to reduce emissions and improve the sustainability and resilience of its infrastructure. For more than 25 yearsenergy-saving performance contracts (ESPCs) have allowed agencies to partner with the private sector to generate billions of dollars in cost savings from reduced energy and water consumption. Under these third-party-financed contracts, the private sector designs, installs, operates and maintains infrastructure improvements, which generate the savings necessary to pay for themselves over time.


Public-private partnership ESPCs have a bipartisan history. Under former presidents George W. Bush and Barack Obama, these arrangements enjoyed congressional support as key enablers of facility modernization and emissions reduction. The President’s Performance Contracting Challenge, launched under President Obama in 2011, leveraged $4.2 billion in private capital over five years to reduce the federal government’s energy spending by $8 billion over the next 18 years in what was at that time the most aggressive effort ever to reduce federal government carbon emissions.

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