$20 Billion in Green Bank Grants Is a Start Toward the Needed Climate Building Boom

The Environmental Protection Agency has awarded $20 billion in grants from its Greenhouse Gas Reduction Fund, created as part of the 2022 Inflation Reduction Act, to help electrify homes and build green infrastructure across thousands of individual projects. It’s a big enough number to be a bit more than a drop in the bucket when it comes to the country’s climate ambitions, which will require building an absurd amount of stuff — solar panels and wind turbines and transmission lines and charging stations and heat pumps and so on.

The need to build is one of many things setting climate change off from the more traditional set of environmental problems and the activism and advocacy that confronts them. In general, cleaning up our messes would be achieved by doing less of something — less dumping of pollution into rivers, belching less sulfur dioxide from smokestacks into the sky to limit acid rain, cutting HFCs out to fix the ozone hole. And while the fundamental solution to climate change is “stop burning fossil fuels” the reality is that we need to replace them with something, and those somethings all need to get made, very rapidly.

The recipients of the $20 billion in new funding, including the Coalition for Green Capital, Power Forward Communities, Appalachian Community Capital, and several other non-profit community lenders, will mobilize $7 of private investment for every federal dollar spent. The goal is to cut up to 40 million tons of greenhouse gas emissions annually. Most of the money, $14 billion, is targeted to low-income and disadvantaged communities.

“Today, we’re putting an unprecedented $20 billion to work in communities that for too long have been shut out of resources to lower costs and benefit from clean technology solutions,” EPA administrator Michael Regan said.

The Inflation Reduction Act’s climate provisions were initially pegged at $369 billion in total, though because many of the legislation’s incentives are uncapped, some estimates suggest that could easily surge past $1 trillion. That is a big number, just not quite a big enough number.

Some analyses peg a net-zero transition in the U.S. as high as $9 trillion per year through 2050. BloombergNEF estimates that the $140 billion spent on clean energy tech in 2022 needs to turn into $10 trillion cumulatively by 2032.

An important caveat, and one that the new kind of climate change denier who cries that it’s too expensive to fix tends to elide, is that spending all that money and building all that stuff has tangible economic benefits that offset the cost. There are health benefits to reduced pollution that mean less missed work and school, drastically reduced healthcare spending, and of course the potential to avoid many trillions in damages from climate change itself.

So there’s a ways to go here, but the public-private partnership model that the new fund incorporates means the $20 billion awarded will spur more than $100 billion in overall spending, which is at least a few drops in the bucket.