By Jeff St. John
“The stars have aligned politically for this in this moment,” Jeff Schub, executive director of the Coalition for Green Capital, told Greentech Media.
More than a decade after its first introduction, a national green bank bill is back before Congress, with much more funding than previous versions proposed over the past two years and a far greater chance to be passed into law, its backers say.
On Wednesday, Democrats in Congress reintroduced the Clean Energy and Sustainability Accelerator Act. The bill would direct $100 billion to the Clean Energy and Sustainability Accelerator, a nonprofit entity tasked with making loans and investments into sectors of the economy that need to grow rapidly to meet the Biden-Harris administration’s aggressive decarbonization goals.
The bill’s proponents say that $100 billion could help leverage up to $500 billion more in private-sector lending and investment and create up to 4 million jobs over the next four years by targeting business sectors with carbon-reduction capacity but underdeveloped access to capital and credit, or gaps between proven technologies and the commercial structures to bring them to market.
Projects authorized for funding under the bill include renewable power, building efficiency, grid infrastructure, industrial decarbonization, clean transportation, reforestation and climate-resilient infrastructure.
It could also direct much-needed investment to economically and environmentally disadvantaged communities. The bill would earmark 40 percent of its funds for communities disproportionately affected by environmental pollution or climate-change impacts, or those reliant on a fossil-fuel-based industry for jobs and economic activity.
Similar models used by the 19 state- and local-level green banks created over the past decade have generated about $5 billion in investment in hard-to-grow sectors and underserved communities, according to the nonprofit advocacy group Coalition for Green Capital. Some of the largest and oldest green banks in Connecticut and New York have already passed the billion-dollar mark on their own.
A new day for long-time federal green bank backers
These institutions were formed after the first attempt to create a national green bank faltered in the early days of the Obama administration. In the past two years, green bank bills put forward by House Democrats, including last year’s $20 billion Clean Energy and Sustainability Accelerator bill from Michigan Rep. Debbie Dingell, were included in broader clean energy and economic recovery bills that were not taken up by a Republican-controlled Senate.
But the new bill, introduced in the House by Dingell and in the Senate by Chris Van Hollen of Maryland, Ed Markey of Massachusetts, Richard Blumenthal of Connecticut and Brian Schatz of Hawaii, may be poised to succeed where previous attempts failed.
“The stars have aligned politically for this in this moment,” Jeff Schub, executive director of the Coalition for Green Capital, told Greentech Media. Democrats now hold a slender majority in both houses of Congress. Vice President Kamala Harris was a co-sponsor of the National Climate Bank Act, another green-bank bill that failed to advance last year. And President Joe Biden’s climate plan includes a call for “innovative financing mechanisms that leverage private sector dollars to maximize investment in the clean energy revolution.”
The bill’s backers are hoping to see it included in COVID-19 relief and recovery legislation now being crafted by Democrats in Congress or in Biden’s promised “build back better” infrastructure and clean energy package. The Democrats’ narrow Senate majority may force them to use budget reconciliation to pass these legislative priorities, but the $100 billion capitalization of the Accelerator could fit into that process, Schub said.
A major federal funding effort on this front could be a key link in the Biden-Harris administration’s “whole-of-government” plan to enable trillions of dollars of clean energy and climate-change mitigation investment in the next four years. In a December event promoting the new bill, Sen. Markey highlighted the role that a national green bank could play in driving “smart investments, national standards and a commitment to environmental justice.”
In the two weeks since his inauguration, President Joe Biden has taken a host of executive actions to create an “interconnected system of driving government decision in the right direction around climate change and clean energy access,” Schub said.
“The Accelerator is the implementation tool to achieve all those objectives,” he said. “You can get this incredible bang for the buck to direct the dollars where they need to be in terms of industries and geographies.”
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