CGC Report Finds National Climate Bank Could Mobilize $1T for Clean Energy

Press Release: Sept. 5, 2019.

The Coalition for Green Capital (CGC) today released a new white paper illustrating how a National Climate Bank capitalized with just $35 billion could mobilize up to $1 trillion in total public and private investment. These investments could rapidly and cost-effectively accelerate the clean energy transition by providing financing to clean energy projects.

The structure of the proposed National Climate Bank is based on the National Climate Bank Act introduced in July by Senators Ed Markey (D-MA) and Chris Van Hollen (D-MD). The bill establishes an independent nonprofit institution with the goal of maximizing greenhouse gas reductions per public dollar, which would be capitalized with public funds and be chartered to operate for 30 years.

The idea of a National Climate Bank has also become a part of the 2020 Democratic presidential campaigns. Sen. Kamala Harris’ new climate plan endorses the National Climate Bank Act, and polling indicates widespread public support for the idea. Other candidates including Pete Buttigieg and Julián Castro propose similar finance institutions: the creation of a $250 billion Clean Energy Bank, and $200 billion Green Infrastructure Fund, respectively.

CGC’s report compares the proposed Climate Bank with other relevant institutions including commercial banks, global development banks, and existing Green Banks. It studies the established track records of these institutions to set forth reasonable expectations for the techniques the Climate Bank could use and the results it could achieve, finding that $1 trillion in total investment impact is achievable from $35 billion in initial capitalization.

Reed Hundt, CGC’s CEO, said: “The National Climate Bank is an elegant policy solution that makes the most of every public dollar, without raising energy costs for consumers. With the impacts of the climate crisis becoming more apparent by the day, there’s no time to waste. We must mobilize a massive wave of investment to get big projects funded and transition the economy from carbon to clean. The Climate Bank provides a clear and practical way to do exactly that.”

This paper is the first in a series which will explore the proposed National Climate Bank, putting financial techniques and concepts into plain language and adding context and detail to the potential workings of the new institution.

The full report is available here: Mobilizing $1 Trillion Towards Climate Action.

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