National Green Bank to Accelerate the Delivery of Cleaner, Cheaper Power
Washington, DC— With the vote by the House of Representatives today, Congress has sent to the President’s desk the Inflation Reduction Act. Among its major features, it grants the Environmental Protection Agency (EPA) $20 billion that can be used to create a single non-profit national clean power financing institution that will make investments with private sector partners to reduce greenhouse gas emissions benefitting all consumers and especially low-income and disadvantaged communities. The national green bank will directly invest in projects and indirectly invest through state and local green banks as well as community development financial institutions. In addition, state, local, and tribal governments can obtain $7 billion of capital for their own financial institutions dedicated to the same purposes.
Remarks submitted for the congressional record today from Congresswoman Debbie Dingell state that the legislation is intended “capitalize a single independent, non-profit national financing institution — the first ever national green bank.”
Reed Hundt, CEO of the Coalition for Green Capital, said:
“We thank our congressional champions, Senators Chris Van Hollen and Ed Markey and Congresswoman Debbie Dingell, for their years of work to author the original national green bank legislation, building bipartisan support for the bill, fighting for its inclusion throughout the reconciliation process and ultimately voting to pass the bill.
“The Coalition for Green Capital and a network of state and local green banks including community development financial institutions are prepared to demonstrate to the EPA how we can multiply the total investment driven by funding of a national green bank, add local green banking institutions to the network that covers the whole country, and subtract both emissions and costs to end users of components of the clean power platform.
“In proof of what’s possible, the American Green Bank Consortium comprising 23 members in 17 states and the District of Columbia has already invested $2.6 billion of their own funds along with private sector capital totaling nearly $9 billion in green projects that provide financial returns while maintaining extremely low default rates. This historic public investment will kickstart the Consortium’s $20B worth of pending projects that will delight consumers with faster, cleaner and cheaper power.
“Our coalition and the green bank model enjoy broad support from climate and social justice advocates as well as state and local leaders facing the consequences of climate change in frontline communities. The Inflation Reduction Act will quickly and effectively bring green investments to communities across the country.”
As Congressmen, Senators Chris Van Hollen (D-MD) and Ed Markey (D-MA) sponsored the creation of a national green bank in 2009. In subsequent Congresses, these two Congressmen and then Senators were joined by Senators Durbin, Stabenow, Murphy, Blumenthal, Whitehouse, Schatz, Heinrich, Booker and Warren, as well as former Senator Harris, now Vice President, in seeking to create a national green bank to facilitate public-private investments in the clean power platform that over time must become the predominant underpinning of the American economy.
In 2020 the House of Representatives twice enacted legislation on a bipartisan basis to fund a national green bank, pursuant to bills introduced by Congresswoman Debbie Dingell (D-MI), Rep. Brian Fitzpatrick (R-PA) and the late dean of the House, Rep. Don Young (R-AK).
In early 2021 President Biden called for a national green bank as part of his plan for rebuilding American energy infrastructure with public-private investment in clean power solutions.
In July 2021, the House passed for the third time the national green bank, this time as part of the INVEST in America Act (H.R. 3684). That same month, in a letter to congressional leaders urging action on climate infrastructure, more than 140 mayors called for the creation of a national green bank. Governors from ten states on the front lines of the climate crisis called on Congress to pass the national green bank, because doing so would be one of “the most impactful actions to protect our climate” and environmental groups echoed that message.
President Biden included the national green bank as a key climate provision in the American Jobs Plan and, on the first day of the U.N. Framework Convention on Climate Change Conference of the Parties (COP26) in November 2021. By capitalizing a single national green bank with initial funding of $20 billion the United States will take global leadership of the international green bank movement, which already features green banks in Asia, Africa and Europe.
As recently as March 2022, more than 200 organizations and companies requested the President’s support in passing legislation to fund a national green bank in the form of the Greenhouse Gas Reduction Fund. Signers of the letter included national environmental advocates, trade and industry associations, financial institutions, utility companies, and state and local governments.
Since 2010, the Coalition for Green Capital has championed the creation of green banks at the state and local level. There are now 23 green banks operating in 17 states. Green banks are in the process of forming in an additional 25 states. Most recently, efforts are underway to create green banks in Puerto Rico, New Mexico, and New Jersey.