The Biden administration on Tuesday outlined how states and nonprofit groups could seek $27 billion in funding from a “green bank” that would provide low-cost financing for projects intended to reduce emissions of planet-warming greenhouse gases.
The so-called Greenhouse Gas Reduction Fund, created by Congress in landmark climate legislation approved last year, will invest in clean energy projects nationwide, with a focus on low-income and underserved communities.
The Environmental Protection Agency expects to award $20 billion in competitive funding to 15 nonprofit groups that will work with local banks and other financial institutions to invest in projects that reduce pollution and lower energy costs for families.
Another $7 billion will be awarded to states, tribes and municipalities to deploy a variety of solar energy projects, including residential rooftop solar, community solar and solar storage.
EPA Administrator Michael Regan said the green bank – modeled after similar banks established in states such as Connecticut, New York and California – will unlock billions of dollars in private investment to enable neighborhoods and communities “that have never participated in the clean energy economy to participate in full force” in creating green jobs.
Low-income and disadvantaged communities “that pay the largest percent of their income toward their energy bills have been left out of the investment game (and) haven’t seen an infusion of private capital to help them gain opportunities … for many reasons,” said Regan, the first black person to lead the EPA.
“What we’re focused on here is making sure that this $27 billion opportunity is thought through in a way that allows that community, that population, to walk,” he said. “Obviously, if this had been done before, there would be no reason for the Greenhouse Gas Reduction Fund. We are charged with bringing private capital from the sidelines.
The program expects to begin awarding awards this summer and has received nearly 400 responses to initial inquiries, said Jahi Wise, the program’s acting director.
Even before the funds were awarded, Republicans in Congress had taken aim at the green bank, calling it a taxpayer-funded “slush fund” that was ripe for abuse.
Rep. Gary Palmer, R-Ala., said he would sponsor the bill to repeal the fund, which he said would benefit Wall Street companies but “doesn’t help the American people with utility bills.
“Will this $27 billion slush fund reduce heating costs for these American families?” Palmer asked.
Sean Kelly, a spokesman for House Energy and Commerce Chair Cathy McMorris Rodgers, R-Wash., said the fund “provides an extraordinary amount of authority and resources” to the EPA, but has no measures to ensure accountability or transparency about resources. used.
“In other words, this provision creates a taxpayer-funded slush fund for Wall Street and increases the risk of overspending, fraud and abuse,” Kelly said in a statement. “This is not a responsible way to allocate these resources.”
Democrats are more optimistic, calling the funding a historic opportunity to reduce greenhouse gas emissions, protect public health and create economic opportunity in underserved and under-resourced communities.
“For years, we have struggled to take the idea of a national climate bank from vision to reality. With today’s action from the EPA, we are one step closer,” said Senator Chris Van Hollen, D-Md., who pushed for a green bank along with Massachusetts Sen. Ed Markey and other Democrats.
Markey and Van Hollen said in a statement that they will work with the EPA to ensure that the new fund is national in scope, has a substantial “multiplier effect” with private investment and includes various stakeholders, including “communities that have historically been underserved” by banks . and other financial institutions.
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