Green Banks: Part of Climate Solution & More Resilient Communities
NEW YORK — The new Inflation Reduction Act is poised to make major investments across the country and in disadvantaged communities to more equitably spur development of green technologies that reduce or avoid climate pollution, according to participants at a Climate Week green bank event today in New York City, featuring keynote addresses from Rep. Debbie Dingell of Michigan and Sen. Edward Markey of Massachusetts, sponsors of legislation creating a national climate bank.
“The new climate bill can be a real game changer for the U.S. on investing in clean energy, climate action and equity, if implemented the right way,” said Sarah Dougherty, director of the Green Finance Center at NRDC (Natural Resources Defense Council.) “Green Banks have a proven track record globally stimulating new private investment and starting new, self-sustaining markets for deploying climate solutions, including in low-income and marginalized communities. And they can play a key role in the U.S. addressing the climate crisis and building resilient communities.”
Other event participants were Marcelo Rouco, CEO, Ecosave Inc.; Gregory Randolph, Managing Director, NY Green Bank; Jeffrey Diehl, CEO & Executive Director, Rhode Island Infrastructure Bank; Eli Hopson, CEO, District of Columbia Green Bank; Bert Hunter, Executive Vice President & CIO, Connecticut Green Bank; and Sarah Davidson, Director, New York Green Bank.
The new law contains $27 billion for a Greenhouse Gas Reduction Fund that can be used by cities, states, or Tribal Governments, new or existing green banks, as well as other long-standing institutions like Community Development Financial Institutions and credit unions, to cut climate pollution, clean up the air and drive clean energy, with more than half of the funding explicitly directed to low-income and disadvantaged communities.
Green banks include stand-alone institutions and existing public development banks that are transformed with strong climate mandates and additional climate finance capacities. They can play a key role in advancing country priorities on climate and sustainable development goals.
The Greenhouse Gas Reduction Fund demonstrates the U.S. is serious about investing in clean energy, efficient buildings, and resilient infrastructure in disadvantaged communities, so businesses, families and individuals will benefit from cleaner air, better housing and infrastructure.
Around the world, green banks are a proven model. By sharing investment risks, building local capacity, and transforming markets, green banks help cities, states, and countries scale up climate action, ambition, and move closer to achieving climate targets under the international Paris Agreement on climate change.
Through mid-2021, Green Bank Network members globally invested $54.4 billion to support renewable energy, energy efficiency and other projects valued at $134.7 billion. Together, these green bank-supported projects are estimated to have avoided 48.03 million metric tons of carbon pollution, equivalent to taking 22.4 million cars off the road.
The following are comments from event participants:
“Green banks have an established record helping facilitate private investment to build climate resilience infrastructure into communities globally,” said Jeffrey Diehl, CEO & Executive Director, Rhode Island Infrastructure Bank. “Thanks to significant funding in the Inflation Reduction Act, we are looking forward to leveraging additional private investment to help communities in our state, and country, to be more resilient and better able to mitigate the impacts from climate impacts.”
“We have an incredible opportunity to demonstrate the transformational impact that green finance can deliver through a partnership between a national green bank, state and local green banks, and community financial institutions, said Eli Hopson, CEO, DC Green Bank. “In our communities right here in DC, we are already seeing the benefits of green jobs, clean energy, and equitable development. This new economic paradigm will create a powerful enabling environment to ensure that the future is clean and green and that no communities are left behind.”
“We are very encouraged by the potential for IRA funding to enable NY Green Bank, and other similar financial intermediaries working to advance green lending activities, to expand our financing more broadly across New York State,” said Greg Randolph, Managing Director, NY Green Bank. “The developers and project sponsors we work with, particularly those active in the battery storage space, are well positioned to benefit from this historic legislation. We also see tremendous opportunity to accelerate our work to meet the goals of New York’s Climate Leadership and Community Protection Act as a result of these much-needed federal funds.”
“Green banks have proven that our model of leveraging public funds to attractive multiples of private investment is successful,” said Bert Hunter, Executive Vice President & CIO, Connecticut Green Bank. “In Connecticut, we’ve established a goal directing no less than 40 percent of investment and benefits from our programs into vulnerable communities that are disproportionately impacted by the effects of climate change by 2025. The Inflation Reduction Act will help amplify our impact and allow us to do even more.”
NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.
The Green Bank Network (GBN) is a membership organization managed by NRDC that was founded in December 2015 to foster collaboration and knowledge exchange among existing Green Banks, enabling them to share best practices and lessons learned. The GBN also aims to serve as a source of knowledge and a network for jurisdictions that seek to establish a Green Bank. The GBN members are the Clean Energy Finance Corporation (Australia), Connecticut Green Bank (U.S.), DC Green Bank (U.S.), GreenTech Malaysia, Minas Gerais Development Bank (Brazil), NY Green Bank (U.S.), Rhode Island Infrastructure Bank (U.S), and Tata Cleantech Capital Limited (India). Visit us at greenbanknetwork.org/about-gbn.