'Green Banks' Could Soon Be In PA Thanks To Inflation Reduction Act

HARRISBURG, PA — Pennsylvania lawmakers are considering a new way to leverage historic funding from last year's federal Inflation Reduction Act into local "green banks," nonprofits that work to financiall support technologies and services that fight climate change.

State Rep. Chris Rabb pointed to environmental guarentees in the Pennsylvania Constitution like clean air, clean water, and natural preservation as reasons the bill is urgent.

"Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come," Rabb wrote in a co-sponsorship memorandum. "Therefore, it is our collective duty to conserve and maintain our natural resources. We have a once in a generation chance to empower municipalities and communities to fund environmental projects that will ensure Pennsylvanians continue to be stewards and uphold our rights and responsibilities established in the Pennsylvania Constitution."

The Inflation Reduction Act, passed last summer, includes a $27 billion provision for something the Greenhouse Gas Reduction Fund, aimed at investing in projects which traditional banks were not supporting.

“Green banks principally are about taking a limited amount of public money and turning it into multiples of private investment,” Bryan Garcia, president and CEO of the Connecticut Green Bank, told Pew Trusts.

Without an official Pennsylvania Green Bank, the money that's been designated for the state to invest in these projects would have nowhere to go. Rabb's bill would empower municipalities to use the green bank to apply directly for funding on a range of community solar projects.

Zero-emission products, technologies, and related services, often in low to moderate income communities, are examples of general projects that would be targeted for funding.

The proposal comes a month after the U.S. Environmental Protection Agency released guidelines on how they would administer the Greenhouse Gas Reduction Fund.

"This program will mobilize billions more in private capital to reduce pollution and improve public health, all while lowering energy costs, increasing energy security, creating good-paying jobs and boosting economic prosperity in communities across the country," EPA Administrator Michael S. Regan said in a statement.

Though the Inflation Reduction Act was hammered through Congress in bipartisan fashion, and even though green banks have received the support of Republicans nationwide, including the governor of Alaska, the move to create a Pennsylvania Green Bank could still be blocked by GOP legislators who disapprove of the federal spending.

The Connecticut Green Bank became the first of its kind in the nation in 2011. Similar state-level nonprofits have been launched in numerous states in the years since, including Michigan, Colorado, and elsewhere.