Framework Provides Funding for a Single, National Green Bank After 13 Years of Congressional Efforts
Washington, DC— As part of the framework agreement announced today by Senate Majority Leader Chuck Schumer and West Virginia Senator Joe Manchin, the reconciliation package will provide $27 billion to the Environmental Protection Agency for the Greenhouse Gas Reduction Fund. Of that number, $20 billion is designated for a non-profit green bank which will make direct investments with private sector partners to reduce greenhouse gas emissions and will indirectly fund such public-private investing through the American Green Bank Consortium and not-for-profit financial institutions. In addition, $8 billion of the $20 billion will be targeted to low- to medium-income communities.
Reed Hundt, CEO of the Coalition for Green Capital, said:
“We thank Leader Schumer and Senator Manchin for their tireless work to develop this historic framework agreement that, after thirteen years of congressional efforts, provides funding for one, single national green bank. The Coalition for Green Capital intends to demonstrate to the EPA that it and its consortium members are ready and able to accelerate public-private funding at the rate required to reduce emissions fast enough to win the battle against catastrophic climate change. Supercharged by this funding, the Consortium welcomes all other not-for-profit financial institutions to join its coalition, including in particular the community development credit unions and community development financial institutions that have deep roots in local communities and are extraordinarily well-positioned to support an equitable energy transition.
“CGC has organized green banks as the American Green Bank Consortium. Our members have raised and invested $2.5 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. The Consortium currently has $20 billion in backlogged projects of which at least two-thirds can be financed by the private sector when catalyzed by this historic public investment.
“We want to acknowledge the bipartisan support for this new institution for more than a decade, and in particular call out for praise the tireless champions of this concept: Senators Chris Van Hollen and Ed Markey and Congresswoman Debbie Dingell. We also thank the foundations who have supported CGC during the long years leading to this point. They include: Alaska Conservation Foundation; The Bay and Paul Foundations; Cleveland Foundation; Climateworks Foundation; Convergence: Blending Global Finance; Energy Foundation; The George Gund Foundation; Lowenstein Foundation; McKnight Foundation; The New York Community Trust; Rockefeller Brothers Fund; Town Creek Foundation; and William and Flora Hewlett Foundation.
“We urge legislators to support this framework and send it to the President’s desk as soon as possible.”
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 environmental groups wrote in support of capitalizing a single national green bank.
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.