Green banks have a long track record financing projects in the power and building sectors to reduce emissions, and some states have even used proceeds from power sector cap and trade programs to support such financing. Now, a group of green bank leaders say the same thing should be done for transportation.
The Transportation and Climate Initiative (TCI) is an ongoing cooperative effort among Northeast and Mid-Atlantic states to reduce transportation emissions, modeled after the established Regional Greenhouse Gas Initiative (RGGI) cap-and-trade program covering the power sector. TCI is still in the planning and program design process, and has solicited comments on its latest Framework Draft for a Regional Policy Proposal.
A group of American Green Bank Consortium members representing Northeast and Mid-Atlantic green banks have submitted joint comments to TCI’s public process. The American Green Bank Consortium is a project of CGC, which convenes green bank leaders to share knowledge and facilitate joint work towards common goals.
The comments to TCI leadership come from the heads of the Connecticut Green Bank, the Climate Access Fund in Maryland, the Montgomery County Green Bank, and the Rhode Island Infrastructure Bank. They underscore the ways that green banks can effectively complement other policies which aim to send a market signal to reduce greenhouse gases.
Green banks have set a relevant precedent in their complementary work with the RGGI cap-and-trade program. Two green banks have received RGGI auction proceeds and used them to mobilize investment into energy efficiency and clean energy projects. These investments reduce demand for fossil-fueled power, save money for consumers, enable faster emissions reductions, and reduce the overall region-wide cost of compliance with RGGI caps.
Because green bank investments mobilize private capital alongside each public dollar invested, they are a highly cost-effective use of program funds. Green banks can also be a route to improving the fairness of program outcomes and address environmental justice needs. They have proven their ability to reach low- and moderate-income communities to provide clean energy and energy efficiency upgrades.
Green banks could play a similar role in support of transportation emissions reductions. The signatory green bank leaders suggest that TCI model the potential impact of green bank investments in the transportation sector, and solicit additional stakeholder feedback on potential transportation projects for green banks investment.
TCI could also facilitate cross-state discussions to share knowledge, which could lead to the creation of new green banks (including a regional transportation infrastructure green bank), and the capitalization of new or existing green banks with TCI proceeds.
Finally, the comments note that these deliberations are occurring in the context of increasing momentum towards the creation of a National Climate Bank which would be capitalized with billions in federal funds. Laying the groundwork now to support green banks in the Northeast could provide a pathway for this capital to flow towards green bank investments in the transportation sector. The growing attention from Congressional leaders towards the green bank model is a testament to the success already achieved by existing green banks at the state and local level.
For more information, including on the American Green Bank Consortium and how it facilitates this work, see:
- Full TCI Comments.
- American Green Bank Consortium website.
- National Climate Bank micro-site with additional resources on federal action.