lightbulb dollarsCross-posted from Climate Progress.

Two separate initiatives formed this week that could unlock more than $1.6 billion in private investment for energy efficiency projects around the U.S.

Yesterday at the Clinton Global Initiative, two of the largest U.S. pension funds, CalPERS and CalSTERS, announced that they would invest $1 billion toward energy efficiency projects. This follows a June announcement at the Clinton Global Initiative, where the AFL-CIO and the American Federation of Teachers announced a similar goal that has already resulted in over $150 million in investment.

In making the announcement yesterday afternoon, former president Bill Clinton explained, “This is a huge deal.”

A huge deal indeed, considering the economic returns that energy efficiency projects bring. According to analysis from the University of Massachussetts, energy efficiency retrofits can create more than 17 jobs per million dollars invested. That’s compared to around 5 jobs created per million dollars invested in oil and gas.

“This is a very strong commitment and shows amazing progress on these issues,” explained Bracken Hendricks, a Senior Fellow at the Center for American Progress, one of the organizations that helped pull together the agreement.

Efficiency projects have already helped create thousands of jobs. In the three-month period from April to June 2011, the federal weatherization assistance program created under the stimulus plan has created 14,800 jobs, according to the Department of Energy.

And another major program unveiled this week could double those figures.

On Monday, the Carbon War Room announced it had arranged a business consortium that will invest up to $650 million in efficiency retrofits on commercial buildings in Miami, Fla., and Sacramento, Calif. The consortium, which includes Lockheed Martin and Barclay’s Capital, will develop projects through a local program called PACE, or Property Assessed Clean Energy.

Under PACE, municipalities issue bonds to fund energy efficiency or renewable energy projects. A property owner pays back the municipality over time through increased property taxes. The program started in Berkeley, Calif., and has spread to municipalities in 30 states around the country. (Due to conflicts with mortgage lenders, the residential PACE program has floundered. But the commercial sector has still been moving forward, accounting for dozens of projects around the country.)

But so far, nothing has been done on this scale with PACE. The consortium will leverage the program to finance a range of commercial-scale energy efficiency retrofits, potentially stimulating up to $2.3 billion in economic activity and creating around 17,000 jobs in Miami and Sacramento.

But it’s not just about jobs. As we’ve pointed out numerous times, energy efficiency is the most important climate solution. A recent study by McKinsey shows just how necessary efficiency investments are:

If executed at scale, a holistic approach would yield gross energy savings worth more than $1.2 trillion, well above the $520 billion needed through 2020 for upfront investment in efficiency measures (not including program costs). Such a program is estimated to reduce end-use energy consumption in 2020 by 9.1 quadrillion BTUs [British thermal units], roughly 23 percent of projected demand, potentially abating up to 1.1 gigatons of greenhouse gases annually.

With over a billion and a half dollars announced for efficiency retrofits in the same week, we are a big step closer to achieving that needed scale.