LIIF Responds to EPA’s Request for Information on the Greenhouse Gas Reduction Fund
On Monday, Dec. 5, the Low Income Investment Fund (LIIF) submitted detailed comments to the Environmental Protection Agency (EPA) with recommendations to ensure the Agency’s implementation of the new Greenhouse Gas Reduction Fund (GHGRF) is equitable, effective and prioritizes the most vulnerable people and communities. GHGRF is a new $27 billion program enacted as part of the Inflation Reduction Act, which President Joe Biden signed into law on Aug. 16, 2022. The program aims to invest in projects and activities that reduce greenhouse gas emissions, and $8 billion is available for competitive grants for financial and technical assistance specifically in low-income and disadvantaged communities.
LIIF recognizes GHGRF as the single greatest opportunity our country has ever had to accelerate investments in greenhouse gas reducing technology, projects and activities. GHGRF grants can also facilitate transformative and reparative investments that target the insidious and compounding consequences of environmental injustice and racial injustice. For centuries, communities of color have experienced the worst consequences of climate injustices, with the built environment wielded as a tool to exclude Black and Latino communities and relegate families to live in less desirable and often unsafe neighborhoods.
To ensure this significant investment goes directly to historically excluded and disproportionately burdened communities, LIIF strongly recommends that EPA include certified Community Development Financial Institutions (CDFIs) as eligible recipients of GHGRF grants. Partnering with CDFIs is one of the most effective and efficient ways that the EPA can ensure private sector partners leverage GHGRF dollars and meet racial equity commitments. CDFIs are uniquely able to offer this expertise and are well positioned to deploy these resources, particularly to community partners and small organizations that are deeply rooted in the community but may lack the capacity to meet onerous program requirements
The early care and education (ECE) sector is an example of a community in need of this support. As a leading financial and technical assistance provider to this vital industry, LIIF’s comments emphasize the importance of leveraging GHGRF to support our nation’s youngest learners, as well as the women and women of color who primarily care for them in ECE settings. Black and Latino children, families, and neighborhoods have tended to have the least access to high-quality early child care and education and are most likely to live in places with harsh weather made worse by climate change. Child care providers often face barriers to accessing the capital they need to grow and strengthen their businesses and cannot afford to take on debt to finance costly building upgrades or even high-efficiency appliances.
Adapting child care settings to be more resilient, energy efficient and sustainable can have immediate benefits for child health and safety by reducing harmful emissions, mitigating environmental toxins and improving indoor air quality. GHGRF grants can help accomplish this vision if the program is designed and implemented to meet ECE providers’ unique needs – including through grants and robust technical assistance.
As EPA prepares to invest in clean energy and climate justice through this innovative new program, LIIF offers three core principles to ensure equity and efficiency are prioritized in program design and implementation:
- Build on the existing infrastructure, capacity, relationships and knowledge of CDFIs and the CDFI Fund to help equitably and efficiently deploy GHGRF resources, with a particular emphasis on the communities facing the deepest disadvantages. CDFIs have over 50 years of experience, geographic coverage in diverse communities across the country, and a track record deploying billions of dollars for major investors and leveraging philanthropic resources.
- Prioritize young children in all GHGRF program design decisions recognizing that children will bear the brunt of the climate crisis yet have the least responsibility for causing it. This should include structuring GHGRF resources such that a portion of the funds can be deployed to support ECE programs and other child care settings where the youngest children spend most of their time.
- Encourage applicants to fund a range of financial products and services through GHGRF, including those that leverage private sector capital, those that are scalable and sustainable, and importantly, those that are direct pass-through grants.
The GHGRF presents an opportunity to embed climate adaptation across all that CDFIs do. EPA will now review public comments to contribute to the GHGRF’s program design and implementation. LIIF is proud to submit our comments and support the EPA in this once-in-a-generation opportunity to accelerate clean energy investments. Read our full comment letter.