{"id":12724,"date":"2022-10-26T07:03:18","date_gmt":"2022-10-26T12:03:18","guid":{"rendered":"https:\/\/blogs.law.columbia.edu\/climatechange\/?p=12724"},"modified":"2023-06-12T13:49:23","modified_gmt":"2023-06-12T18:49:23","slug":"cities-epa-request-for-information-on-green-banks-established-by-the-inflation-reduction-act","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2022\/10\/26\/cities-epa-request-for-information-on-green-banks-established-by-the-inflation-reduction-act\/","title":{"rendered":"Cities: EPA Request for Information on Green Banks Established by the Inflation Reduction Act"},"content":{"rendered":"
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By Amy Turner\"\"<\/a><\/span><\/p>\n

On October 21, 2022, the U.S. Environmental Protection Agency (USEPA) released a<\/span> request for information (RFI) regarding Section 60103 of the Inflation Reduction Act (IRA)<\/span><\/a>, also known as the IRA\u2019s \u201cgreen bank\u201d provisions. These provisions add a new section 134 to the Clean Air Act establishing a $27 billion Greenhouse Gas Reduction Fund (GGRF) grant program, which will seed what are commonly referred to as \u201cgreen banks\u201d (entities that leverage public funding to attract private funding and advance green energy or energy efficiency projects). The USEPA\u2019s request for information seeks stakeholder input on a variety of questions relating to making GGRF grants. The RFI is one of the first formal actions undertaken by a federal agency in connection with IRA implementation. Cities and other forms of local government have an interest in GGRF program design, both as eligible recipients for some of the GGRF funding and as catalysts for green bank investment in their communities.\u00a0<\/span><\/p>\n

To review<\/span><\/a>, the GGRF provisions of the IRA appropriate three distinct pots of funding. A $7 billion appropriation will cover \u201cgrants, loans, or other forms of financial assistance, as well as technical assistance, to enable low-income and disadvantaged communities to deploy or benefit from zero-emission technologies, including distributed technologies on residential rooftops, and to carry out other greenhouse gas emission reduction activities.\u201d These grants may be made to States, municipalities, Tribal governments, and nonprofit organizations that are \u201cdesigned to provide capital, leverage private capital, and provide other forms of financial assistance for the rapid deployment of low- and zero-emission products, technologies, and services\u201d (in other words, to act as green banks). A separate $12 billion appropriation will be used to support direct and indirect investments in projects that \u201creduce[] or avoid[] greenhouse gas emissions and other forms of air pollution in partnership with, and by leveraging investment from, the private sector; or assist[] communities in the efforts of those communities to reduce or avoid greenhouse gas emissions and other forms of air pollution.\u201d A third appropriation of $8 billion may be used for the same activities as the $12 billion fund, but only in low-income and disadvantaged communities.\u201d These latter two pots of funding are available only to the nonprofit organizations designed to act as green banks.<\/span><\/p>\n

The IRA gives USEPA significant discretion in how to disburse the GGRF funds, and it is not yet clear how the green bank model will work. While several state and <\/span>local green<\/span><\/a> banks<\/span><\/a> exist already, the scale of the GGRF funding dwarfs that of those existing banks, which loan to relatively few projects (and many areas of the country are not served by a green bank at all). With respect to the IRA\u2019s green bank provisions, many questions remain, from who will receive the funding and act as the green bank (e.g., will there be a few or many such banks nationally?) to what constitutes a \u201cdisadvantaged community.\u201d<\/span><\/p>\n

The RFI appears intended to help USEPA sort through some of these questions. The RFI lists six areas for more specific comments, each of which may be of interest to local governments.\u00a0<\/span><\/p>\n