For over a decade CGC has held fast to these core principles to guide a clean energy transition:
- consumers should pay less, not more, for clean energy;
- every American should have clean energy and access to the financing necessary to get it; and
- public funds should mix with private as needed to provide that abundant, affordable finance.
The institutional embodiment of these principles is the green bank. And Congress is now closer to creating a massive version of a green bank than it has been since 2009. Outside Congress, the topic of clean energy finance is being taken up by a growing and diverse set of stakeholders.
Last week, Rewiring America released a remarkable and novel analysis that calculated precisely how many heat pumps, electric vehicles, miles of transmission line and other electrification-focused solutions are needed to decarbonize America. And it prominently described how the method and cost of financing are essential components of our nation’s climate strategy. “If done right, innovative low–cost financing will be the most effective way to ensure equity and universal access to cheap, reliable energy in the 21st century.” The report’s companion “Handbook” goes further to say:
When people talk about the total cost of solving climate change, it sounds enormous, often in the trillions. This is exactly the wrong way to approach it. We should think about how much money it will save us. We must ask ourselves the question, “What market conditions, and at what interest rate, can we make solving climate change save us money?” We must then write the regulations and build the institutions and policies that make that possible.
Thankfully, the institution needed to deliver this kind of finance has already been designed, it has been road tested globally and in America for a decade, and the bill to create it has already passed the House of Representatives with $20 billion of funding.
The National Climate Bank Act was introduced by Senators Markey and Van Hollen, and Rep. Debbie Dingell in 2019. And last month it was passed as part of the $1.5T Moving Forward Act with $20 billion of capitalization for the independent non-profit that what was renamed the Clean Energy and Sustainability Accelerator. It was endorsed in the House Climate Crisis Committee’s report and included in the Energy & Commerce Committee’s CLEAN Future Act climate package. It has the support of nearly 100 organizations, including environmental and clean energy leaders. And the non-profit national green bank has the support of 7 out of 10 voters nationally, including majorities of voters across parties.
The Reconstruction Finance Corporation (RFC) is often looked to as the model for what is necessary to build our clean energy future. However, the RFC hasn’t operated in over half a century, while green banks are operating right now, designed for the very crisis we are confronting. They are proving in real time precisely how to do it.
In the U.S. green banks at the state and local level have financed more than $5 billion of clean energy and resilience projects, leveraging nearly $3 of private investment per public dollar. And every one of those projects saves money for the customer, and many were designed specifically for low-income communities. Globally, green banks have driven over $50 billion of investment.
As the Rewiring America report explains so well, merely saying something must be financed is not enough. The details matter, and we cannot wait until after the institution is formed to figure them out. Green banks are working as we speak to refine the precise techniques that will be deployed quickly at scale when the national green bank is launched. We must use the green bank tools, built for this exact purpose, that are right in front of us.