U.S. Climate Funding To Spur Economic Growth In Disadvantaged Regions

abandoned housing, low income housing, chicago

As part of the Biden administration’s aim to accelerate the green transition in the U.S., the government is striving to support disadvantaged communities and spur economic growth. While traditional energy operations have mainly taken place in a select few hubs – centered around access to oil, gas and coal – green energy activities can take place in a much broader geographical space. Wind and solar farms can be established on rural land, while hydropower and geothermal operations may be best suited to entirely new energy regions in the U.S. So, as the government develops its renewable energy capacity, there is also a chance to support the development of long-neglected regions and communities, as well as to sustain the economic activities of prior mining and energy hubs.

Developing Disadvantaged Communities

In July, as part of President Biden’s Investing in America agenda, the Department of Energy (DoE) Office of State and Community Energy Programs (SCEP) opened applications for $27 million in funding from the Energy Future Grants (EFG) program. This is aimed at fostering collaboration between local, tribal, and state governments to benefit disadvantaged communities while supporting a green transition. As well as providing jobs and economic
growth in low-income areas, it will also ensure that those most vulnerable to the effects of climate change achieve enhanced clean energy security.

Funding will support partnerships between community-based organizations, academia, utility companies and non-profit organizations to take a holistic approach to the development of clean energy projects. The U.S. Secretary of Energy Jennifer M. Granholm stated, “To champion an equitable clean energy future, we must work with communities to foster integrated clean energy solutions across the power, transportation and building sectors.” Granholm added, “These Energy Future Grants represent an opportunity to spearhead innovative projects through collaboration, creating clean energy solutions that
are equitable, and scalable of clean energy strategies nationwide.”

The EFG program is expected to provide around 50 groups with funding of around $500,000. To determine eligibility, applicants were asked to submit a Community Benefits Plan (CBP) outlining how the project will achieve four goals: (1) support community and labor engagement, (2) invest in the American workforce, (3) promote diversity, equity, inclusion, and accessibility (DEIA), and (4) contribute to the President’s goal that 40% of the overall benefits of certain federal investments flow to disadvantaged communities (the Justice40 Initiative).

The SCEP unlocked a further $30 million in funding under the Energy Efficiency and Conservation Block Grant (EECBG) Program in October. Funding will be provided to improve energy efficiency and advance crucial clean energy and infrastructure upgrades in public and private spaces, including hospitals, homes, manufactured housing parks, and government buildings.

Investing in Clean Air

In November, the U.S. Environmental Protection Agency (EPA) launched the Greenhouse Gas Reduction Fund program, announcing plans to award $27 billion in funding for green energy and clean air investments across the country. Approximately $18.6 billion has been earmarked for low-income and disadvantaged communities in line with the Justice40 Initiative. These grants are expected to support job creation, decrease energy costs, enhance the air quality in these communities and attract higher levels of private investment
in the sector. This is expected, in turn, to improve the health condition of those who have previously been burdened with poor air quality, particularly in industrial regions of the U.S.

The EPA made a further $2 billion available to community groups, states and tribes to improve pollution and develop their clean energy capacity in November. The agency’s administrator Michael Regan said the scheme “has the promise to turn disadvantaged and overburdened areas into healthy, resilient and thriving communities for current and future generations.” He added, “Folks, this is historic,” as it is aimed at low-income and minority groups “that have long been overlooked and forgotten” and struggle to gain access to
federal funding.

green energyDisadvantaged Communities Key to a Green Transition

Following his inauguration as President in 2021, Biden adopted the Justice40 Initiative to deliver 40% of the funding from certain clean energy, clean transit, housing and workforce development investments to communities “marginalized, underserved, and overburdened by pollution.” The program responds to the needs of communities, which were communicated during the Biden-Harris campaign, with many stating decades of underinvestment and environmental inequality. It became clear that delivering climate, clean energy, clean transit, water, and other investments would help address these interrelated issues and their associated impacts.

The Justice40 Initiative covers new initiatives, such as the Inflation Reduction Act, the Bipartisan Infrastructure Law, and the American Rescue Plan. It depends heavily on community engagement to address the needs of disadvantaged communities, rather than delivering a one-size-fits-all approach. This is important, as the communities served by this funding are confronted by a wide array of challenges from gender and race disparity to environmental degradation. The establishment of such a comprehensive program that considers the needs of its applicants is expected to deliver meaningful change, aimed at addressing climate change as well as creating jobs, and enhancing equality and economic growth.

Felicity Bradstock is a freelance writer specializing in Energy and Industry. She has a Master’s in International Development from the University of Birmingham, UK, and is now based in Mexico City.


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