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Environmentalists and climate justice advocates cautiously welcomed $27 billion in federal clean energy investment grants announced Tuesday by the Biden administration, stressing the need to ensure that the public funds reach deserving communities and also address systemic injustices baked into energy and financial systems.

The Greenhouse Gas Reduction Fund program is part of the Biden administration’s $370 billion Inflation Reduction Act (IRA), which is aimed at lowering energy costs for American families and small businesses, and accelerating private investment in clean energy solutions with an emphasis on environmental justice communities.  

The new fund intends to target greenhouse gas emissions by encouraging investment in cost-saving rooftop and community solar programs, clean energy and storage initiatives with a focus on historically underserved and disinvested communities in alignment with the Justice40 Initiative, which directs that 40 percent of the overall benefits of certain federal investments flow to communities facing disproportionately high and adverse health and environmental impacts.

The fund should make sure that the communities that are most impacted are getting the funding first, said Dr. Sacoby Wilson, director of the Center for Community Engagement, Environmental Justice, and Health (CEEJH) at the School of Public Health in the University of Maryland-College Park. Similar funds made available through previous federal programs failed to affect change, he added.  

“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, adding, “The benefits of these investments should go to the community most impacted.”

Overseen by the Environmental Protection Agency, the Greenhouse Gas Reduction Fund is composed of two competitive grant programs. First, a $20 billion competition will award between two and 15 grants to eligible nonprofits that will partner with community financial institutions such as green banks, community development financial institutions and housing finance agencies, among others. The grant aims to accelerate the transition to an equitable, net-zero economy and boost job opportunities in the energy sector. 

The second $7 billion Zero-Emissions Technology Fund will award up to 60 grants to eligible states, tribes, municipalities and nonprofit entities to create opportunities for disadvantaged communities and groups to gain access to clean, affordable, resilient solar energy. 

The EPA also announced launching a national community roundtable series to introduce the initiative across the country, and to get feedback on community-level solutions that the fund can support. The agency expects to open competition for the funding by summer, 2023. 

The EPA’s latest announcement comes at a time when House Republicans have targeted President Joe Biden’s climate funding and have proposed to limit federal spending rather than raising the federal debt limit. 

A Republican House budget committee press release said that it would be irresponsible to raise the debt limit without common sense spending controls such as canceling wasteful EPA programs from the IRA. “The Inflation Reduction Act included $27 billion for the EPA with no specific programmatic purpose, and $60 billion for ‘environmental justice’ programs. That money should be rescinded,” the committee said. 

“Unfortunately, House Republicans have made cuts to this and other parts of the administration’s clean energy plan a top priority,” said Sara Chieffo, vice president of government affairs at the League of Conservation Voters, a national nonprofit. “We will do everything we can to make sure we do not go backward and instead use this as just the first step toward the clean energy economy of the future.”  

Sen. Chris Van Hollen, elected Democrat from Maryland, said he will push for creating a national climate bank network within the Inflation Reduction Act for distributing federal grants under the program. “With today’s action from the EPA, we’re one step closer,” he said, adding that “I will continue working with the EPA to fully realize our vision of a self-sustaining climate bank that is national in scope, has a substantial multiplier effect, and is composed of diverse stakeholders.”

The national climate bank proposal seeks to scale up green banks operating in jurisdictions such as the state of Michigan and Montgomery County, Maryland, and prioritize investing in programs that focus on communities,  such as with community solar, heat pumps or installation of EV charging stations. There are roughly two dozen such banks in the U.S.  

Mustafa Santiago Ali, the Vice President of Environmental Justice, Climate, and Community Revitalization for the National Wildlife Federation and a former EPA executive, said it is important for proposals like that for the national green bank to have regional and local components with particular focus on rural areas that are often underfunded.

“When we look at this new climate economy that we’re developing and when we look at the businesses that exist in that space, we see that less than 2 percent of those are actually owned by folks of color,” Ali said. So, as we are seeing these new sets of resources and the allocations of them, we’ve got to make sure that we’re changing that dynamic when it comes to the funding.”

He added that it would be challenging for the EPA, which is constrained by several factors, including capacity issues, to be the primary driver of a huge $27 billion fund which requires fund allocation, disbursements and monitoring to make sure every dollar is reaching the deserving communities. 

Just shoveling out money without a system that ensures qualitative results will not be sufficient in mitigating the causes of environmental injustices, Ali said. 

“Expanding solar, especially to environmental justice communities that have borne the brunt of polluting energy sources for too long, will produce substantial greenhouse gas emission reductions, reduce the disproportionate energy burden on low income people and improve air quality,” said Jahi Wise, Acting Director of the Greenhouse Gas Reduction Fund Program.  

It is vitally important to ensure that the billions of dollars are tracked, monitored and get to the actual communities and the organization institutions that they’re designed for, said Dr. Robert Bullard, a founding figure of the environmental justice movement and professor of urban planning and environmental policy at Texas Southern University in Houston.

He cautioned that the EPA and the communities have to guard against those organizations that pop up suddenly and parachute in to seek federal funding for doing this work. “They write good proposals to get the money and nothing changes,” said Bullard, founding director of the Bullard Center for Environmental and Climate Justice at Texas Southern. “That’s what we have to guard against.”

Wilson, at the University of Maryland, recommends adding 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 said.

The program will help provide direct investment toward climate mitigation and resilience projects in communities across the country, stated Ishmael Buckner, policy advocate with the national nonprofit Public Citizen’s Climate Program.

“As the EPA begins to act, we hope this program will catalyze the jobs of the future while mitigating climate risk for disadvantaged communities,” he said in a statement.

But it is vital that the EPA include strong reporting and accountability requirements in its eligibility guidelines, Buckner said, to ensure that selected fund recipients meet the needs of communities as well as greenhouse gas reduction goals.