Adopting our ‘cool communities’ strategies of reroofing and repaying in lighter colors and planting shade trees can effect substantial energy savings, directly and indirectly. In our target city of Los Angeles, annual residential air-conditioning (A/C) bills can be reduced directly by about US$100 M and, because these strategies serve to cool the air in the Los Angeles basin and reduce smog exceedance levels by about 10%, an additional savings of US$70 M in indirect cooling and US$360 M in smog-reduction benefits—a total savings of about US$1/2 B per year—is possible. Trees are most effective if they shade buildings, but the savings are significant even if they merely cool the air by evapotranspiration. In Los Angeles, avoided peak power for air conditioning can reach about 1.5 GW (more than 15% of the city’s air conditioning). Generalized to the entire US, we estimate that 25 GW can be avoided with potential annual benefits of about US$5 B by the year 2015. Recent steps taken by cities in the warm half of US towards adoption of cool communities include (1) incorporation of cool roofs in the revised ASHRAE building standards S90.1 and (2) inclusion of cool surfaces and shade trees as tradeable smog-offset credits in Los Angeles. Other step underway include (1) plans by the US Environmental Protection Agency (EPA) to approve heat island mitigation measures in the state implementation plan to comply with ozone standards and (2) plans for ratings and labeling of cool surfaces.