White House Activates $20 Billion Climate Kickstarter Program

The White House on Thursday will activate a much-anticipated program meant to spur private investment in clean technology, a key plank of the administration’s climate plan that has drawn opposition from Republicans.

Vice President Kamala Harris and EPA Administrator Michael Regan will announce the awarding of $20 billion in grant funding to eight recipients under the greenhouse gas reduction fund, a green bank that was authorized in the 2022 climate law.

The funding will create a national network of clean technology lenders that will reduce or avoid up to 40 million metric tons of climate pollution per year, a senior administration official told reporters Wednesday. At least 70% of the capital will flow to low income and disadvantaged communities, and at least 20% to rural communities, the official said.

Three of the awardees are nonprofit financing institutions: the Climate United Fund, the Coalition for Green Capital, and Power Forward Communities. Those lenders will receive $14 billion overall to finance clean technology projects in partnership with private-sector investors and developers. The recipients can invest in qualified projects that meet certain criteria, but are free to pick and choose the projects they want to support, the official said.

Another five awardees will split $6 billion to create hubs that deliver funding and technical assistance to community lenders in low-income and disadvantaged communities: the Opportunity Finance Network, Inclusiv, Justice Climate Fund, Appalachian Community Capital, and the Native CDFI Network.

The administration plans to ask grant recipients to track the impacts of their investments, including emission reductions, benefits to communities, and private sector capital mobilization, according to the official. The EPA will publish annual reports that disclose information from the awardees to ensure the program is working, the official said.

Democrats launched the $27 billion greenhouse gas reduction fund under the climate law to help spur the Biden administration’s plan to slash climate pollution by 50% from 2005 levels by 2030. The fund still has $7 billion for a “solar for all” competition that will award up to 60 grants across the US.

Manish Bapna, president of the Natural Resources Defense Council, called the announcement “an unprecedented investment in communities that have been overlooked for far too long.”

Neighborhoods across the country “are primed to see significant benefits, from new jobs and business growth to notable energy savings, putting money back in the pockets of hard-working people,” Bapna said in a statement.

But congressional Republicans have pushed back against the program, calling it a slush fund that the Biden administration is using to finance a green agenda that many GOP lawmakers consider extreme.

During a House hearing in January, Rep. Kat Cammack (R-Fla.) said the fund could be used to support projects that wouldn’t otherwise be financed, potentially including bad investments.

Rep. Gary Palmer (R-Ala.) suggested in the same hearing that the money could “wind up in the hands of the Chinese Communist Party.”

The House passed a measure (H.R. 1023) in March, sponsored by Palmer, that would essentially slash the greenhouse gas reduction fund. President Joe Biden had earlier said he would veto the bill if it reached his desk.

Investors broadly agree that private sector investment is crucial for meaningful decarbonization. Some remain leery of the sector because of an earlier boom in climate tech investment that fizzled out about 10 years ago.

But to people like Peter Davidson, CEO of Aligned Climate Capital, the investing environment is different now, in part because the climate problem has become more pressing.

“There’s so much work that has to be done to get our buildings in conformity with being zero emissions, with getting our vehicles green, whether that’s clean fuels or EVs,” said Davidson, a former official at the Department of Energy’s loan program. “We know exactly what has to be done. I don’t think it’s a bubble because you see it in front of you.”