Why You Should Care About The National Climate Bank — A CleanTechnica Exclusive
Credit to Author: Carolyn Fortuna| Date: Tue, 07 Jan 2020 13:36:00 +0000
Published on January 7th, 2020 | by Carolyn Fortuna
January 7th, 2020 by Carolyn Fortuna
The UN’s Intergovernmental Panel on Climate Change (IPCC) says that an annual investment of $2.4 trillion is needed in the energy system alone until 2035 to limit temperature rise to below 1.5 °C from pre-industrial levels. This kind of climate cash needs precise commitments, quantified goals, and transformative thinking. That’s where the National Climate Bank comes in. It’s a mechanism to spark greater public and private clean energy investment, using a range of techniques and approaches to engage market actors and capital providers and bridge market gaps that allow capital to flow at scale.
Graphic used with permission of Coalition for Green Capital
The National Climate Bank Act introduced in the Senate on July 8, 2019 establishes an innovative new financial institution as a standalone, independent nonprofit organization known as the National Climate Bank. Its mission is to reduce greenhouse gas (GHG) emissions and consumer energy costs by investing in clean energy and related projects that provide nationwide economic benefits. Several of the 2020 Democratic candidates for US President have endorsed the National Climate Bank as a way to fund clean energy projects.
The Coalition for Green Capital’s (CGC) works to drive greater clean energy investment into existing and new markets, in the US and in developing countries, with the goal of creating a 100% clean energy platform. The CGC’s executive director, Jeff Schub, agreed to provide CleanTechnica with an exclusive interview about the power and potential of the National Climate Bank, based on the CGS’ experience as it seeks to raise, organize, and deploy capital to finance clean energy projects.
Smaller government skeptics decry another government program. Why is the National Climate Bank much more than another oversized government use of taxpayer money?
“The National Climate Bank proposed in the current legislation has a very important feature that distinguishes it from other programs: it would be established as a nonprofit institution independent of government. Once established, funded, and furnished with a Board of Directors, its investment decisions would be made by experts rather than by elected officials. It would be insulated from politics and would receive no further taxpayer funding after its initial capitalization, instead drawing in private capital to co-invest in its projects. In this way it will be empowered to make investment decisions with the greatest benefit to the climate and to local communities, while treating taxpayer dollars with care and maximizing their impact.”
Graphic used with permission of Coalition for Green Capital
Why does the track record at state and local level infuse confidence into the likely success of the National Climate Bank?
“State and local green banks have already mobilized billions of dollars into clean energy projects, proving that the model works. Not only have they shown that they can breathe life into projects that wouldn’t otherwise have been built, they have done so with a unique focus on equity and community engagement. Green bank initiatives in states from Connecticut to Hawaii have made clean energy and energy efficiency accessible to renters, low-income families, and minority households that have often been excluded from these benefits. The investments save money for households and create jobs for local contractors.
The National Climate Bank would take this model to a much greater scale, both by providing capital to state and local green banks, and by directly investing in even larger clean energy projects.”
Graphic used with permission of Coalition for Green Capital
How will clean energy initiatives be chosen so as to be fair, competitive, and innovative?
“Legislation specifies that the Climate Bank will maximize the emissions reduction impact of each dollar deployed, while prioritizing benefits to consumers and environmental justice communities. Because green banks invest in projects that are competitive in the market, all investments regardless of their sector will contribute to reducing consumer costs.
An investment committee will be empowered to determine the precise mix of investments that will best achieve the priorities set forth in the legislation. One of the strengths of the green bank model (which we’ve already seen borne out by existing institutions), is their ability to learn, grow, and shift their strategy in response to changing conditions and new information over time.”
Graphic used with permission of Coalition for Green Capital
The National Climate Bank Act, introduced today in the House, would be a powerful tool to fight climate change, driving private investment in innovative climate solutions. This is a great step forward & reflects recs laid out in Getting to Zero. https://t.co/5e4ZaqdxTO pic.twitter.com/6TVul0eVWz
— C2ES (@C2ES_org) December 12, 2019
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Carolyn Fortuna Carolyn Fortuna, Ph.D. is a writer, researcher, and educator with a lifelong dedication to ecojustice. She’s won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. As part of her portfolio divestment, she purchased 5 shares of Tesla stock. Please follow her on Twitter and Facebook.