On a block in Bridgeport, Connecticut, a row of small houses are each topped with solar panels. The homeowners might not have normally considered solar or been able to afford it, but they’re part of a program that helps lower-income households access solar power and efficiency upgrades. They now save hundreds of dollars each year on energy bills.
It’s one example of the work done by the Connecticut Green Bank, the country’s first bank of its kind—and an example of the type of work that could be done at a national climate bank, designed to help the U.S. quickly deploy wind and solar power, electric vehicles, and other climate tech. If the National Climate Bank Act, which recently passed with a bipartisan vote in the House, moves forward, it could also help provide millions of new jobs at a time when millions of Americans are out of work because of the pandemic.
“Technologies like utility-scale wind and solar are growing,” says Jeffrey Schub, executive director of the Coalition for Green Capital, a nonprofit that advocates for green banks. “But everything just has to be done faster.” A national climate bank (or, as Congress is also calling it, a Clean Energy and Sustainability Accelerator) could help drive investment in areas where the market alone is slower.
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The idea of a national climate bank first gained momentum after the last recession, in 2009, but at the time, it was part of a bill that also included cap and trade (limits on emissions and the ability for companies to trade emissions “credits”), and it didn’t pass. Afterward, some states began to form green banks of their own. Connecticut was first, in 2011. The organization—a nonprofit that invests public money to spur private investment—was able to support fledgling industries such as rooftop solar. It also discovered gaps, such as the fact that rich homeowners were much more likely to get solar panels than those with less money who had more need for the savings that solar can provide on electric bills.
“It was clear that low to moderate-income families were being left behind,” says Bryan Garcia, president and CEO of the Connecticut Green Bank. One challenge was that they didn’t have the credit scores to qualify for solar programs; the organization looked at credit scores and income and saw that there wasn’t a correlation. “Just because you’re low income doesn’t mean that you have bad credit,” he says. “There’s an unconscious bias that people have.” The green bank met with the industry and ultimately invested in a New Orleans-based rooftop solar company to help them begin operations in Connecticut, where they now offer solar leases and energy efficiency upgrades.
The organization has calculated that for each public dollar it invests in various programs, it mobilizes seven dollars of private investment. In the fiscal year that just ended, for example, it used $30 million in public resources to attract $270 million. “We saw $300 million of investment going into Connecticut’s clean energy economy,” says Garcia. “Of course, $300 million of investment means people are being put to work. They’re deploying solar projects, they’re deploying energy efficiency, they’re deploying fuel cells. The more investment that happens, the more jobs are created.”
The same thing can happen nationally, where the bank would be created as an independent, nonpartisan nonprofit—sitting outside the government, but capitalized with an initial appropriation from Congress—and could invest both in national projects, such as upgrades to the electric grid, and send money to state and local green banks. “Between 35 and 40 states want to have a green bank or something like it, but they don’t have the capital,” says Schub. That’s especially true as COVID-19 hits government budgets, including in the states and cities that do have green banks now. In Connecticut, nearly half of the green bank’s budget was recently cut to help balance a deficit in the state’s general fund.
A national climate bank wouldn’t be a complete solution for climate change. By one estimate, the U.S. should be spending a minimum of $600 billion each year to invest in the infrastructure needed to transition to a zero-carbon economy. With an initial appropriation of $20 billion, the national climate bank will leave a huge gap. But as in Connecticut, it can help spur more private investment. Many climate policy experts note that we don’t necessarily need new sources of funding to pay for climate action; instead, we need to redirect existing money—globally, for example, nearly $1 trillion went to fossil fuel investments last year, while less than a third as much went to renewables. Governments need to incentivize businesses to choose low-carbon investments, and a climate bank can be one source of those incentives.
It can also create jobs. In an independent analysis of the National Climate Bank Act, the Coalition for Green Capital estimated that it could create five million jobs in five years with an appropriation of $35 billion, or three million jobs with an appropriation of $20 billion. (In the recent vote, the House approved $20 billion; as the loans that are dispersed are paid back, the money will be reinvested.) “Because this is work that can’t be outsourced to their different outsource building upgrades, for example, it’s work that has to happen in every corner in the country, in every community,” he says. “So there’s work to be done everywhere.”
Most of those jobs wouldn’t be technical. “Very often, there’s a perception that the way to move people into the clean economy is to retrain coal miners to work to climb up on people’s roofs, which is all well and good and something that I think has a lot of validity,” Schub says. “But it’s actually just as much the case that people in the service economy—like waiters and waitresses and people from airlines who are being laid off and whose jobs are not going to come back—they have a place in a clean energy industry immediately, because there’s such a need for that kind of a service activity within the industry.” (One recent study suggests that as many as 42% of jobs lost during the pandemic won’t return.)
The investments can also help the U.S. lead in emerging industries making clean technology, such as electric vehicles. “One of the things that I keep thinking about as we convert to EVs is, where are some of those jobs going to go,” says Congresswoman Debbie Dingell (a Democrat from Michigan), who introduced the National Climate Bank Act in the House. “We need to keep that. I’m a car girl. So I need to keep the battery capability here. I don’t want us to have to import from China.”
A parallel bill is in the Senate, cosponsored by Senator Kamala Harris, and Joe Biden has also backed the concept. “The momentum is there,” says Schub. “We have a lot of confidence that this is well-positioned for an early 2021 stimulus bill.”