Earlier this week, the White House and Congress made strides toward achieving a number of climate, health care and tax priorities by passing the Inflation Reduction Act in the Senate.
The bill, which is expected to pass the House of Representatives later this week, has the potential to be the most significant piece of climate change legislation passed into law by the U.S. Congress to date. Various models from independent organizations project it could enable the United States to achieve a 41% reduction in carbon emissions, compared to 2005 levels, by 2030.
In addition to this broad achievement, the U.S. Impact Investing Alliance is particularly encouraged to see inclusion of a $27 billion "green bank" facility to help finance clean energy projects, within the $370 billion dedicated to climate programs.
This new program run out of the Environmental Protection Agency (EPA) would be tasked with distributing $20 billion in competitive grants to nonprofit organizations able to provide and leverage private capital and financial assistance for the “rapid deployment of low- and zero-emission products, technologies, and services." The remaining $7 billion would be available to state, local and tribal entities for similar purposes with a focus on reaching low-income and disadvantaged communities.
Crucially, these funds will be used to catalyze additional private capital, extending the reach of the program and ensuring that business and investors are engaged in growing the clean energy economy. Read more in ImpactAlpha today.
The Alliance’s federal policy docket - Private Capital, Public Good - calls on Congress to create a domestic vehicle to invest in and promote inclusive economic growth, sustainable job creation and American economic competitiveness. Alongside the substantial investments in U.S. industry and manufacturing included in the recently passed CHIPS and Science ACT, the proposed $27 billion commitment to clean energy financing is a significant step toward that overarching goal.
The Alliance looks forward to partnering with impact investors and our community development finance partners to ensure implementation of the program effectively leverages the resources and expertise of the private sector to catalyze innovative clean energy projects that promote environmental justice.