Gov funding

The Greenhouse Gas Reduction Fund is here. Here's how to make it work.

To deploy the $27 billion effectively and equitably, there are two key things to prioritize.

July 3, 2024
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Photo credit: Mario Tama / Getty Images

Photo credit: Mario Tama / Getty Images

The passage of the Inflation Reduction Act gave the Environmental Protection Agency a new $27 billion pot of funds to dole out, dubbed the Greenhouse Gas Reduction Fund. And the moment to put that cash in the hands of selected applicants is fast approaching. 

If used well, the GGRF has the potential to lower both carbon emissions and utility bills. It could create jobs and provide much-needed relief for disadvantaged communities. More than that, though, it can pave the way for a future where green lending is accessible even after these funds run out. 

But using the GGRF well will be complex. Its awardees span three programs: Solar for All, the Clean Communities Investment Accelerator, and the National Clean Investment Fund. With so many organizations in the mix, there’s a risk of duplicating efforts, confusing the market, or missing crucial opportunities to achieve energy equity. Successfully deploying the money requires a solid, two-part foundation. 

Outreach programs

One major barrier to participation in the energy transition is the fact that many people know nothing about incentives or programs — or are highly skeptical when they do.

We have to be honest about the energy industry’s history. Countless communities have been disadvantaged, overburdened by energy bills, and living in polluted areas for decades. As a result, they are often (rightfully) wary of energy programs.

VEIC’s research on two statewide energy efficiency programs found that BIPOC customers have a lower level of trust in clean-energy programs than non-BIPOC customers, and that income-eligible customers who qualify for free services often don’t take advantage of them because they’re confused by numerous programs marketing similar services. Another study of participation in energy efficiency programs in Rhode Island echoed VEIC’s takeaways. One education equity organization interviewed for the study said that, “BIPOC communities might have lost their sense of trust and engagement in the ‘system’ because of how many times they’ve been blocked [from] receiving the same benefits.”

Knowing this, outreach must begin with working alongside community-based organizations and building trust so federal funding reaches those who need it most. 

The Department of Energy’s Office of Energy Justice and Equity, previously led by Shalanda Baker, has already provided a blueprint for this outreach. The Justice40 initiative — which aims to allocate 40% of federal clean energy funds to benefit underserved communities that bear the brunt of climate impacts — is a signal to community groups that they are central to the climate conversation. And DOE now hosts events dedicated to collaborating, connecting organizations, and hearing firsthand from communities across the country.

A skilled workforce

A related problem: a lack of people to do the work of GGRF deployment.

Having dollars to devote to climate projects is an essential first step, but if you don’t have contractors, auditors, electricians, and other workers to transform buildings and systems, they won’t get off the ground. 

This is especially important in regions that haven’t had strong policy drivers like building performance standards, which is a challenge for GGRF’s national reach. That’s where workforce development can help. 

One successful model: In the District of Columbia, the DC Sustainable Energy Utility workforce development program has already helped create careers for the green economy. Twice a year, the DCSEU connects residents with five-month paid externships working with local contractors and other organizations. This program allows residents to develop skills, get on-the-job training and certifications, connect with mentors, and receive job placement assistance.

Of the program’s participants, 75% of our program graduates had full-time jobs lined up before graduating.

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Other elements of success

Technical support

Many state energy, building, and transportation offices are stretched thin. And come September they will be navigating a complex, changing industry with a sudden influx of funding they don’t have the time or experience to manage. 

A key element of helping the workforce succeed, furthermore, is access to technical assistance. Leveraging external support — provided by organizations like VEIC and others — will enable these under-resourced places to build the robust project pipelines they will need to deploy funding.

Scalable, people-centered technologies

Climate tech solutions can’t just be good for the environment. They need to be good for people, too. When technologies provide multiple benefits, they scale.

VEIC has seen this firsthand in Vermont, where we run heat pump awareness campaigns. This ready-to-go, all-electric technology can cut the average U.S. home’s heating-related climate pollution by 38% to 54% compared to gas furnaces. Plus, they’re easy to access and they lower energy bills, so homeowners are eager to install them. In the last few years, Vermont has seen heat pump installations rise to the highest per capita of any New England state.

Geographic reach 

To have a greater impact, energy programs need to have a greater geographic reach. And that can be achieved through coalition building.

VEIC, for instance, connected with the climate equity non-profit Elevate via our participation in the Relay Network, a group of mission-driven, energy-efficiency implementers. We’re each bringing our own experience in delivering comprehensive multifamily retrofit programs in different geographies to design a one-stop shop for affordable and efficient multifamily housing for the City and County of Honolulu, a region with distinct efficiency and decarbonization opportunities. 

Incentives and loans

Now that federal funds are flowing to the green economy, we need to maximize them. Financing is an essential piece of how we’ll build the traction to decarbonize buildings at the scale needed. 

Incentives will be key. Many business owners cannot take on debt, even with low interest rates. So cash incentives and project financing can make the decision to go green much easier.

Looking ahead

The GGRF has the potential to be transformative, not only for the planet but also for the many people feeling the pain of high energy bills and unhealthy environments. And it's those same people whose taxpayer dollars make this historic investment possible. 

As we confront challenges posed by climate change, we cannot bank on the availability of capital alone to save us. Deploying these billions of dollars also requires an investment in the social infrastructure needed to implement high-impact projects at scale.

Accelerating the adoption of these tools through a culture of true collaboration is how we’ll make an impact. And now is our moment to develop the workforce and outreach programs, among others, to make that collaboration as fruitful as possible.

Becky Schaaf is a managing consultant at the clean energy nonprofit consultancy VEIC. The opinions represented in this contributed article are solely those of the author, and do not reflect the views of Latitude Media or any of its staff.

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