The Coalition for Green Capital filed public comment today with the Environmental Protection Agency (EPA) in response to the agency’s Request for Information (RFI) “seeking public comment on core design aspects of the Greenhouse Gas Reduction Fund (GHGRF).” In August, Congress added the GHGRF as a new section 134 to the Clean Air Act when it passed the Inflation Reduction Act.
“Congress gave EPA a unique, historic responsibility to avoid and reduce emissions of greenhouse gasses and other forms of air pollution and to redress climate and energy-related environmental injustice in low-income and disadvantaged communities,” writes CGC. “President Biden has called for a reduction of 50% to 52% of greenhouse gas emissions by 2030. This goal can be met only by achieving substantial additional public-private investment in the energy sector as required by the GHGRF, particularly in low-income and disadvantaged communities.”
CGC does business as the American Green Bank Consortium. In its filing, it explained that it intends to seek capitalization as a national green bank drawing funds from the $11.970 billion appropriated for General Assistance under Section 134(a)(2) and the $8 billion for Low-Income and Disadvantaged Communities under Section 134(a)(3).
In its filing, CGC provided both a summary of the statute and responses to the discrete questions posed by the EPA in its RFI.
As set forth in detail in the filing, an “eligible recipient” for either of the two funds must be a national non-profit purposefully and exclusively designed for direct and indirect investing in the “qualified projects” defined in the statute. An entity with any other purpose does not pass the definitional bar of the statute. The “eligible recipient” cannot be controlled or managed by ineligible recipients, such as a deposit-taking entity or a privately funded entity.
The “eligible recipient” must have a viable business plan that ensures continued operations for many years to come. That plan must show how it will help EPA fulfill both the goals of greenhouse gas emissions and other air pollution reduction and environmental justice. The majority of the investment under the two funds should be in “low-income and disadvantaged communities.” EPA should define such communities in a unique, precise way to give guidance to all “eligible recipients,” or alternatively should require such applicants to provide such precise definitions as will fit the purpose of addressing environmental injustice.
The “eligible recipient” must provide financial and technical support to an open network of other nonprofit investors, as well as investing directly itself. Both direct and indirect investing must exclusively be in “qualified projects.” The direct investing must be prioritized to address financing the private sector would not otherwise provide.
The “qualified projects” include “any project, activity, or technology” that falls within two carefully defined categories:
“(A) reduces or avoids greenhouse gas emissions and other forms of air pollution in partnership with, and by leveraging investment from, the private sector, or
(B) assists communities in the efforts of those communities to reduce or avoid greenhouse gas emissions and other forms of air pollution.”
CGC noted that congressional authors of the GHGRF have made their intent clear. On September 9, 2022, Senator Chris Van Hollen (D-MD), Senator Edward Markey (D-MA), and Representative Debbie Dingell (D-MI) wrote EPA Administrator Michael Regan urging him to use the GHGRF funding to capitalize “a single, independent, non-profit national climate bank that would maximize the leveraging of private capital investment, ensure the efficient distribution of funds within a growing green bank network and create opportunities for large scale, transformational investments — particularly in environmental justice communities.”
“Understanding the plain reading, history and context of Section 134, EPA is now in a moment to design and define how the GHGRF can incorporate energy justice and environmental justice,” writes CGC. “In championing the GHGRF the sponsors of the legislation have explained publicly that they envisioned the capitalization of a national green bank as the purpose of the legislation.”
“Consortium members have in the aggregate invested more than $2 billion of their own funds in partnership with more than $7 billion from private sector investors to total more than $9 billion in investments,” writes CGC. “The Consortium welcomes the opportunity to work with EPA as well as other organizations and institutions to meet the opportunity created by section 134: avoid and reduce emissions of greenhouse gasses and other forms of air pollution while addressing environmental injustice in the most damaged communities of America.”