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Climate Law Ushers in New National Green Bank

NRDC – Carolina Herrera, Sarah Dougherty, and Douglass Sims

The passage of the Inflation Reduction Act (IRA) is a long-overdue step toward establishing a national green bank that will unleash tens of billions of public and private dollars for investment in clean energy and climate-resilient infrastructure in underserved communities. In addition to supporting economic development, these investments will reduce air pollution and improve the health and safety of communities. The law empowers the EPA to fund nonprofit organizations designed to finance the rapid deployment of low- and zero-emissions products technologies and services, particularly in disadvantaged communities. Using this funding to establish a nonprofit national green bank will enable bold climate action across the country that puts underserved communities first. This is a major win following over a decade of advocacy by NRDC and its partners for the establishment of a federal green bank.

Establishing a National Non-Profit Green Bank Will Ensure Maximum Impact

The IRA includes $27 billion for the Environmental Protection Agency to establish the Greenhouse Gas Reduction Fund to allocate:

$7 billion to make grants available for states, municipalities, Tribal governments, and eligible recipients to invest in projects that enable low-income and economically, socially, and environmentally disadvantaged communities to deploy zero-emissions technologies and carry out other emissions-reducing activities
$20 billion to make grants available to eligible recipients that invest in projects that reduce greenhouse gas emissions
Of the $20 billion for grants to eligible recipients, $8 billion, or 40%, will be dedicated to projects benefiting low-income and disadvantaged communities.

DC Green Bank

In May 2022, DC Green Bank closed a $7 million deal to accelerate the deployment of solar across the District of Columbia for low-to-moderate income (LMI) residents. The installations are expected to create hundreds of green jobs and reduce emissions by 2,500 tons of CO2 annually. A similar program financed by DC green bank to expand community solar is expected to cut electricity costs for qualified residents by as much as 50%.

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