Last week, Congresswoman Debbie Dingell (D-MI) introduced a bill that could help fund clean energy goals across the United States and spur up to $1 trillion in private investment. With the creation of a National Climate Bank, $35 billion of government funds would be set aside and dolled out over a six-year period to climate change-resilient infrastructure projects.
“Establishing a National Climate Bank will serve as an important implementation tool to achieve this goal by publically financing and stimulating private investments in clean, renewable energy projects, clean transportation, and support communities most affected by climate change,” said Dingell in a statement.
Climate banks aren’t a new concept. Fourteen states, including Dingell’s own, have established their own banks over the last few decades. Michigan’s Green Bank cuts property owner’s energy costs if they make a commitment to use less energy or go green by installing geothermal or solar panel systems. California, Connecticut, New Jersey, and Hawaii have their own versions of green banks as well, while New York boasts the largest in the country. Over its first five years, it contributed $1.6 billion in investments.
While it’s been proven that publically-funded green banks work—other countries including Switzerland and the United Kingdom have found success and are expanding their initiatives—the U.S. has yet to launch a dedicated federal plan. A similar bill was introduced in the Senate over the summer, however. As members of the Environment and Publish Works Committee, Edward J. Markey (D-Mass.) and Chris Van Hollen (D-Md.) argued that the National Climate Bank could be capitalized with an initial $10 billion, with $5 billion added every year for five years.
While it’s unlikely that such legislation will pass during the Trump administration, discussions on what a National Climate Bank could look like are imperative, according to the Coalition for Green Capital (CGB). What’s more, several 2020 presidential candidates have listed green banks in their own plans to tackle climate change, so it’s likely we’ll be hearing more about them in the coming year.
In an interview with Smart Cities Dive, CGB executive director Jeffrey Schub explained that such funds mobilize investment in lower-income communities at faster rates than the private sector can, meaning lesser-known but equally-important climate-conscious projects can receive help. For example, both Washington, D.C., and Baltimore built local banks to offer assistance with their decarbonization strategy and more.
“This is a critical piece of any sort of comprehensive climate policy,” Schub told Smart Cities Dive. “The private markets might figure this out in time, but because time is a factor, you have to put your foot on the gas.”