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THE WHITE HOUSE

                     Office of the Press Secretary
                       (Santa Monica, California)
________________________________________________________________________
For Immediate Release                                        May 4, 1998
                         PRESS BRIEFING BY 
                             TODD STERN,
           ASSISTANT TO THE PRESIDENT FOR SPECIAL PROJECTS
      
                     Loew's Santa Monica Hotel        

                     Santa Monica, California        

8:10 A.M. PDT

MR. TOIV: Here today to brief on the event that the President will be doing today and the announcement that he'll be making with regard to energy efficient homes is Todd Stern, who is the Assistant to the President for Special Projects. Todd, as most of you know, has been coordinating the climate change issue for the White House for over a year now. And without further ado, Todd Stern.

MR. STERN: Thanks, Barry. I just wanted to give you a little briefing on the event that's coming up this morning. It is, as Barry said, a climate change event. The President is going to be making an announcement of a major new collaborative partnership with the housing sector. It's called Partnership For Advancing Technologies in Housing, or PATH. It's a three-way partnership between federal government; the homebuilding sector, which includes builders and suppliers and manufacturers, insurance industry and others; and state and local governments.

The overall mission of this partnership is to accelerate the development and deployment of advanced technologies in housing -- this includes components and material, systems, production methods, and so forth -- with the view of improving energy efficiency, affordability, durability, and quality. This is both with an immediate focus of deploying technologies that are already in existence, they're already available. And then, secondarily, to be developing new technologies that are not yet on the shelf.

The specific goals are to build houses that are 50 percent more energy efficient within the decade for new homes; to have a goal of 30 percent more energy efficiency for retro-fits, for existing homes that get improved, with a goal of hitting 15 million homes, again within a decade. At the same time, to improve affordability by 20 percent -- to have monthly payments on houses be 20 percent better -- as well as having houses 50 percent more durable, with a 10 percent lower risk of loss from hazard or destruction.

I think this is a big deal. The point here is not simply a matter of government spending research dollars and doing collaborative research. That is a part of it, an important part of it, but it's a good deal more than that. This is really a question of the government mobilizing an effort to move technologies out into the marketplace. And in an industry which is particularly diffuse and disparate, you've got -- I think there's something like 100,000 homebuilders in this country. So what government will be doing will be disseminating information on emerging technologies and best practices. It will be testing and verifying the value of new products in order to help persuade the industry to have the confidence to go ahead and use them. It will be working with state and local governments to identify the very considerable barriers that exist in the way of local building codes, permitting processes, et cetera, which make it difficult for new technologies to get introduced into the housing marketplace. And it will be promoting pilot projects, such as the one we're going to see today, and it will generally be serving as a catalyst to move this effort forward.

It's really the first time that you will see the housing industry -- again, this very diffuse octopus of an industry -- being pulled together, agreeing among itself, suppliers, home builders, et cetera, to work together and agreeing to work with the federal government in an effort like this. It's a little bit like a PNGV, the Partnership for a New Generation of Vehicles, applied to the housing sector, but again, a much, much more diffuse sector, so more challenges in that regard.

I think the payoff of this could be quite significant. By 2010, if the PATH goals are met, we would project savings to the consumer in the order of $11 billion a year, and greenhouse gas savings in the order of 24 million tons of carbon a year, and going up. Because again, as the new technologies get more and more into the marketplace, those savings will increase.

A couple of examples of how this is important. In 1990 the U.S. consumer and homeowners wasted $20 billion in energy costs to offset heat losses in the winter and heat that was added into the home in the summer just because their windows didn't work well enough. That's a quarter of all energy costs spent on space heating and cooling. So that's just windows, so there are really very considerable advances that can be made here.

Another little fun fact -- the average home produces twice as much carbon dioxide as the average car, so this is a big producing sector. As a matter of fact, the home-building -- the residential housing sector accounts for about 20 percent of all greenhouse gases that are emitted in the United States.

The pilot that is being announced today, that is the focus of the event today, is called Village Green. It's the first PATH pilot project. It will involve the building of 186 middle-income homes; I think the price range is in the $145,000-$165,000 range. There's a considerable amount of financing being put up by Fannie Mae. The local builders are the lead group and the Braemar Urban Ventures.

The difference between -- this project has obviously been in the works for some time and it happens to also be -- and it's an important piece of this locally -- right near the metro link and right across from a day care center. So there's a lot of good neighborhood aspects to the project. But the difference between what the project was planning to do before it got involved in PATH and what it's now planning to do in terms of energy efficiency will translate into $230 a year in savings to the folks who move into the homes.

I want to also just mention a couple other things. There are other pilots that are almost ready to go in both Tucson and Pittsburgh. There will be major developments there. Denver has also signed on to be a PATH partner.

And let me just conclude by saying I think it's very important in this context for Congress to take positive action on the President's $6.3 billion budget proposal. I don't want there to be any mistake about this; we are not -- the PATH project that we're talking about today is not instead of or in lieu of or because we feel stymied about, as there were some reports today to suggest that. The budget package -- if the budget package had a 100 percent stamp of approval from Congress, we would still be going forward full-speed on PATH.

But that said, this kind of effort underscores why the budget package is important -- because it promotes energy efficiency -- several items actually relate to this particular project, but also energy efficiency in the industrial and transportation sectors as well as in renewables.

So let me stop here and take any questions.

Q Could you repeat the last part about the budget package? What was that?

MR. STERN: I said that the $6.3 billion package includes several elements which relate directly -- about?

MR. STERN: It's a package that was part of the budget announcement in February. It's $3.6 billion on the tax side, $2.7 billion on the spending side. I can go through it if you want. There are tax credits for fuel-efficient cars, tax credits in this particular -- related to our announcement today, there is a tax credit for highly energy efficient appliances for homes. There's a tax credit for homes themselves which meet a certain level of energy efficiency. And there's also, on the appropriations side, R&D money in the housing sector for PNGV, for light trucks extension of PNGV, and for a number of things on the industrial side.

Q You said annual savings of about $230 per home. Is that right?

MR. STERN: At this particular location, which will actually be probably a lot lower than they would be in areas that are more energy intensive.

Q Well, when you're doing things like putting higher-grade windows, more insulation -- that costs money in the house. Over a 30-year loan of a house, you're only going to be saving about $6,900. How much is the cost of the things you're doing to upgrade?

MR. STERN: The goal of the PATH partnership is to do these things in a way which is not going to increase the cost of the home. And, indeed, I don't believe that's there's any projection from the builders in this project for increased costs. Now, if you go -- it is absolutely right -- if you go and you're a consumer and you go out and buy a compact fluorescent light bulb, it costs more when you buy it, but then it lasts 10 times longer and uses a quarter of the amount of energy. And within -- I don't know the exact period of time -- within two years or three years, or whatever, you're saving a good deal of money, even factoring in the higher cost.

Q To follow up, specifically what is being done in these houses that's different from other houses that we will see today?

MR. STERN: Well, you're going to see a number of technologies demonstrated in the set that you'll see at the site. But there's going to be very high-efficient air-conditioners. There are wall insulation units.

Mark, I don't know if you have --

MR. BERNSTEIN: What they're going to do with this site is --

MR. STERN: This is Mark Bernstein from the Office of Science and Technology Policy.

MR. BERNSTEIN: They're going to put more efficient windows and insulation and change the design of the duct work. And because they can do that, they can down-size the air-conditioning. The added cost for the other elements is taken back from the fact that they can take -- instead of putting a three-ton air-conditioner in, they can put a 1.5 ton air-conditioner in.

Q I guess the question that comes to mind is many Americans get a little worried when government starts telling them that we should have certain things in our homes. We all remember what happened when we got the low-flow toilets. Not many people are happy with that. Are we going to be seeing other things like that?

MR. BERNSTEIN: I hope not. Again, this is a voluntary partnership. You're not going to see manufacturers and builders putting into houses anything that they don't think is going to improve not just energy efficiency, but quality of the house. So I don't think you're going to have that kind of problem. You don't have government saying, do this, do that. It's a partnership with private industry, and private industry is going to do what they think is attractive to consumers as well as energy efficient.

Q Todd, you said that the goal was to improve the efficiency of 15 million homes. Is that all new homes, or is it new and existing?

MR. STERN: No. Two things -- to improve by 50 percent the energy efficiency of new homes within a decade. And the projection there is that would be about 7 million new homes. Secondly, to improve the energy efficiency by about 30 percent of existing homes through retro-fitting. And that number is about 15 million. So it's about 15 million existing homes, which is about 20 percent of the existing home stock, and seven million new homes.

Q When you said that this program would reduce greenhouse gases by 24 million tons of carbon dioxide -- is that what you said?

MR. STERN: No, carbon.

Q Of carbon. What percentage of total greenhouse gas output would 24 million tons be? Is that significant at all?

MR. STERN: Oh, it's significant, yes. I mean --

Q Is it more than five percent or so?

MR. STERN: Oh, yes. We need to be reducing -- assuming that the Kyoto Protocol is ratified -- and that's kind of the framework that we're looking at this in -- we are somewhere between 500 million and 600 million tons that need to be reduced. So this is -- and that, again, would include actions that are taken at home, but would also include permits that were purchased in international trading.

Q So this would be about five percent or so?

MR. STERN: Yes, and it could be an even larger percentage of what ends up being done domestically. So it's actually a significant piece.

Q Is there any taxpayer costs associated with this partnership program?

MR. STERN: No.

Q Totally voluntary?

MR. STERN: Yes.

Q What will it add to the price of a new home once these homes meet these new standards with energy efficiency?

MR. STERN: Well, again, the goal is to have new homes be more affordable, to reduce the monthly bills, which include mortgages and energy costs, and all of it. If you look at the overall monthly bill, the goal is to reduce that by 20 percent, not to increase. So again, as Mark said, some things might cost more money, but by doing the overall packaging --

Q Would it make things better and cheaper?

MR. STERN: That's exactly right. That's the objective.

Q That hardly seems a possible goal -- does it?

MR. STERN: No, I actually think it is a very possible goal given the enormous amount of energy that's wasted and given the production techniques which rely heavily now on -- and can rely heavily on computer design and so forth. There really is a lot -- there is a lot of potential there. That's why it is, in fact, possible to do both energy saving and affordability.

Q How will you convince builders to go along with this voluntarily when they are looking for ways to cut cost so they can increase their profit margin?

MR. STERN: Well, again, I think what is interesting about this and what's significant about this is the builders are voluntarily agreeing to be part of this partnership. We're not giving a party that nobody is coming to. This is a partnership -- the president of the National Association of Home Builders is going to be speaking today, is going to be on the stage. And there are several dozen builders, suppliers, and others who are part of this.

They have the ability to make an affordable, better product to get government research dollars, to get government help in knocking down I think the very frustrating barriers they find in local building codes and whatnot, and the like. So I think they see it as a win for them. And if they didn't they wouldn't be voluntarily joining in this partnership, because nobody is forcing them to do it.

Q Thank you.

END 8:24 A.M. PDT