Environmental Justice Top Priority for CDFIs as Greenhouse Gas Reduction Fund Takes Shape
Mary Scott Balys, Vice President of Public Policy, Opportunity Finance Network
OFN submits comments to Environmental Protection Agency advocating that a significant share of climate financing resources be deployed by community development financial institutions
OFN submitted a comment letter to the Environmental Protection Agency (EPA) in response to their recently released Greenhouse Gas Reduction Fund (GGRF) framework. While we were pleased that EPA recognizes the need for community development financial institutions (CDFIs) to participate in the GGRF, we believe the framework can be strengthened to improve outcomes for low-income and disadvantaged communities. We urged EPA to improve the framework by:
- Providing a pathway for CDFIs to participate in all three competitions in order to reach Justice40 goals – GGRF was intended to serve low-income and disadvantaged communities, providing them with access to the transition to green energy and zero emissions technology. CDFIs, with their deep relationships and expertise in communities across the country, will be an integral partner in meeting these goals.
- Reducing the restrictive requirements of the Clean Communities Investment Accelerator – This competition has more rules and restrictions than the others, such as a $5 million limit on grants to community lenders and a 12.5% technical assistance limit, unnecessarily restricting the portion of the GGRF funds intended solely to serve low-income and disadvantaged communities.
Hub nonprofits must also be allowed to provide funding to community lenders as subsidies, rather than having to comply with yet another burdensome requirement through the subaward process. CDFIs face this issue time and time again as we deliver capital to low-income and disadvantaged communities.
There is an assumption that market mechanisms can be trusted to act with less restriction, but that resources going to poor communities need to have more restrictions. GGRF offers an opportunity to break from this historic mentality that contributes to inequity.
- Providing resources for market development, in addition to capital – To create a pipeline for greenhouse gas reduction projects at the scale needed to maximize the benefits of GGRF, EPA should provide set-asides or allowable budgets within each of the three competitions for market development functions like outreach, education, and workforce development.
Additionally, in a letter from the Community Builders of Color Coalition, OFN also went on record urging Majority Leader Chuck Schumer (D-NY) to protect the Greenhouse Gas Reduction Fund from cuts in negotiations over budget priorities and raising the debt limit.
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