When the landmark $370 billion Inflation Reduction Act passed last year, many environmentalists rejoiced but were skeptical of its effectiveness for environment and climate justice -- a social justice movement prioritizing poor and marginalized communities most impacted by issues like pollution, waste, extraction, and climate change.
However, on Tuesday, the Environmental Protection Agency (EPA) announced a big step in deploying the $27 billion the IRA dedicated to these communities. As Inside Climate News’ Aman Azhar reports, advocates are cautiously welcoming the funds but stressing the need that it goes towards communities that need it most while also addressing deep-seated and systemic injustices.
The $27 billion is part of a Greenhouse Gas Reduction Fund (GGRF), which at its core, is a green bank. Previous reporting by FootPrint Coalition dives into what a green bank is and where they have been successful in and outside of the United States.
This green bank specifically will leverage private capital for clean energy and clean air investments across the country, with engagement from stakeholders, while receiving guidance from state, local, and Tribal governments, community financing institutions, environmental justice organizations, industry groups and labor, and environmental finance experts along the way.
Inside Climate got Dr. Sacoby Wilson’s take on the fund. Wilson is a Science Lead for the Community Science & Environmental Justice category over at the FPC Science Engine, which supports radically participatory community-based science that provides models and tools for combating environmental injustices.
According to Wilson, there have been funds like the GGRF in the past, but have failed to enact change.
“We have the problem of the systems that allocate federal dollars, such as state revolving funds. Research has shown that those funds are not being equally allocated to underserved communities of color, such as FEMA funding for example,” Wilson said, referencing how post-disaster FEMA aid tends to neglect communities of color while favoring white ones, making climate change and inequality inseparable issues.
He added: “The benefits of these investments should go to the community most impacted.”
To ensure funds are distributed fairly, Wilson recommends the EPA add regional environmental justice committees and organizations into the grant management and monitoring system the EPA will be working on in the coming months in consultation with the stakeholders.
“The community groups who are part of the technical and social advocacy infrastructure should be the ones who should be leading this work,” he told ICN.
Grant funding will be distributed through two competitions: a $20 billion General and Low-Income Assistance Competition and a $7 billion Zero-Emissions Technology Fund Competition.
According to the EPA, they will implement these programs in alignment with the Justice40 Initiative, an ambition by the Biden Administration that directs 40% of the overall benefits of certain Federal investments to disadvantaged communities, including those facing disproportionately high and adverse health and environmental impacts.
According to the EPA, the $20 billion competition aims to accelerate the transition to an equitable, net-zero economy and boost job opportunities in the energy sector. It will award between 2 and 15 competitive grants to nonprofits that will collaborate with community financing institutions like green banks, community development financial institutions, credit unions, and housing finance agencies, among others. These entities will invest in projects that aim to reduce pollution and lower energy costs for families.
The $7 billion competition, on the other hand, has a different goal: to create opportunities for disadvantaged communities and groups to gain access to clean, affordable, resilient solar energy. It will do this by awarding up to 60 grants to eligible states, tribes, municipalities, and nonprofit entities that will enable the deployment of residential rooftop solar, community solar and storage, and so on.
As of 2020, about a third of states have enabled policies for community solar, which the U.S. Department of Energy defines as “any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers such as individuals, businesses, and nonprofits.”
While these policies, as well as tax-rebates and incentives within the IRA are making solar power more affordable and accessible, it still has a long way to go. The GGRF could make significant progress in closing that gap.
According to Senator Tom Carper, Chairman of the Senate Environment and Public Works Committee, the effort “is likely going to result in the largest-ever federal investment in rooftop and community solar projects in low-income and disadvantaged communities.”
The EPA expects to open GGRF competitions for funding by summer 2023.
In addition to the GGRF, on Tuesday, the EPA also announced a national Community Roundtable series. The goal of the series is to let communities across the country know this fund exists and show community-level solutions the fund will support.
“At a time when we face the existential crisis of climate change, the Inflation Reduction Act is a major and necessary investment in clean energy and energy efficiency,” Senator Bernie Sanders, one of many who will be working with the EPA on this program, said in a statement.
“When people across the country are struggling to make ends meet while dealing with the increasingly severe impacts of climate change, it makes a great deal of sense to help households put solar on their roofs so they can create their own electricity, cut carbon pollution, and help create millions of good jobs.”