CLIMATE POLLUTION REDUCTION GRANTS

 Issue Briefing 

The EPA is awarding $4.6 billion to state and local governments to deploy clean energy, reduce emissions, and advance environmental justice.

State and local action will be essential to halving U.S. greenhouse gas emissions by 2030.

The Climate Pollution Reduction Grants will help state and local governments combat climate change by funding decarbonization initiatives, especially those that deliver an economic boost to, or otherwise support, low-income and disadvantaged communities. The types of projects that qualify for the grants span every economic sector, from transportation, to energy, to buildings, to industrial processes.

In our federalist system of government, meeting enormous policy goals like net-zero emissions is a two-step dance. While the federal government can impose mandates and offer incentives from the top down, states and localities hold significant power. Fortunately for constituents, they’re also much more accessible than federal lawmakers. We have a role to play in helping nudge our elected officials toward developing the most ambitious, inclusive, and economically fruitful climate plans they possible can—before the April 1, 2024 deadline.

Quick Frames

We (and the decision-makers we want to persuade) are each approaching the climate crisis through different lenses. Facts are facts, but it can be helpful to frame them differently to match those individual lenses.

Here are some common frames that speak to different perspectives:

  • 💡RAPID DECARBONIZATION: Without state and local action, the U.S. will not reach its goals of 50% emissions reduction by 2030 or 100% decarbonization by 2050. The Climate Pollution Reduction Grants are a powerful incentive for catalyzing action.

  • ♥️ HUMAN HEALTH: Reliance on fossil fuels may cause in excess of 350,000 premature deaths in the U.S. per year. Fossil fuel pollution is linked to heart attacks, stroke, asthma, Alzheimer’s disease, and respiratory disorders.

  • ✊ EQUITY AND JUSTICE: Low-income and disadvantaged communities are more likely to be in proximity to fossil fuel power plants and high-emissions infrastructure, which leads to compounding negative health outcomes for those groups. Low-income households also bear a disproportionate financial energy burden despite using less energy than wealthier households.

  • 💰 COST SAVINGS: Solar and wind are now the cheapest sources of electricity, while fully electrified homes and vehicles deliver big fuel cost and maintenance savings to consumers over the long run.

  • 💼 JOB CREATION: Investments in climate from the Inflation Reduction Act created 170,000 new jobs in the first year and are projected to create over 1.5 million jobs in the next decade.

Climate Pollution Reduction Grants & Economy-Wide Decarbonization

The Inflation Reduction Act (IRA), a landmark climate law, is a spending bill at its core. It allocates billions of federal dollars toward important programs, but the money is only as good as the implementation of the law’s programs. The Climate Pollution Reduction Grants (CPRG) program is one of the many incentives at the government’s disposal to catalyze emissions reduction in our states and cities.

States and metro areas already received $250 million from the EPA to submit initial Priority Climate Action Plans (PCAPs). Now, they’re competing for the remaining $4.6 billion to implement those proposals. Because they didn’t submit PCAPs, Florida, Iowa, Kentucky, and South Dakota are not eligible for implementation grants, and the only cities eligible for grants in those states are those that submitted their own independent PCAPS (our Action Playbook includes a list of those metro areas!).

Why is state and local climate action important?

Political and structural constraints make the federal government ill-suited to dictate all of our nation’s climate policy. It’s often incredibly difficult to pass top-down, so-called “command and control”-style policy through Congress or executive action because the costs and benefits are often lopsided. When influential stakeholders like the oil and gas industry will face significant costs from a policy decision, they forcefully intervene in the legislative process. Most federal policy is therefore the result of years of compromise, as illustrated by the Inflation Reduction Act in 2022.

Structurally, subnational governments are often the only logical choice for certain types of policymaking. The federal government has little authority over areas like urban zoning, local building codes, or school governance. Exerting influence over those areas at the federal level usually involves a lengthy litigation process. It’s much easier to incentivize subnational governments to set climate-smart policies than to try to force them to do so in court.

Beyond political and structural necessity, there are several advantages to subnational leadership in advancing climate solutions:

  1. Specific, tailored policies: State and local governments have a better understanding of their unique geographical, economic, and social challenges. Their local expertise allows for the development of customized decarbonization solutions that are more effective and relevant than one-size-fits-all national policies.

  2. Proximity to implementation: Even when the federal government sets broad policy goals like those in the Inflation Reduction Act, it's often up to subnational authorities to implement these policies. The federal government alone does not have the capacity to implement nationwide policies, so states and cities play a direct role in enforcing regulations, providing incentives, and overseeing on-the-ground projects.

  3. Experimentation: States and municipalities often act as "laboratories of democracy." They can pilot and test new decarbonization strategies, which, if successful, can be scaled up nationally. Experimentation at the subnational level carries much less risk than at the federal level, and a successful pilot program also serves as a model that other states and cities can iterate on.

  4. Public engagement: State and local officials have closer relationships with their constituents than members of Congress do. Their responsiveness and physical proximity to communities allows for better public engagement and feedback loops, helping ensure that decarbonization efforts are aligned with community needs and values—and therefore insulating them against future backlash and repeal efforts.

Eligible initiatives

The CPRGs are one of the most broadly applicable incentives in the Inflation Reduction Act because they’re intended to affect wide swaths of the economy. Just about any decarbonization project that is ambitious and equitable can be eligible to win a grant. Here are just some of the types of initiatives states and cities can earn funding to support:

  • 🚌 Transportation-sector projects champion the transition to sustainable transportation through the expansion of electric vehicles, charging infrastructure, and policies that reduce vehicle reliance. They also promote infrastructure and community designs that emphasize walking, biking, and public transit.

  • ⚡️ Energy-sector initiatives focus on accelerating the transition to clean energy through the implementation of standards, incentives, and technological advancements. They emphasize renewable energy adoption, energy efficiency, carbon regulation, and streamlined processes, especially in commercial, residential, and underserved communities.

  • 🏠 Buildings-sector initiatives promote enhanced energy efficiency and electrification in building infrastructure, targeting both new and existing structures. They emphasize the adoption of stringent energy codes, incentives for efficient appliances and technologies, building performance management, and the mitigation of “high-global warming potential” substances in cooling systems.

  • 🏭 Establishing rigorous standards in the industrial sector can go a long way in reducing emissions. Industrial decarbonization policies could include promoting energy efficiency, advancing low-carbon technologies, and fostering markets for materials with reduced carbon footprints, such as certain cements and steels.

  • 🌎 Dozens of other miscellaneous projects could potentially qualify outside the four main categories listed above. Examples include reducing methane and GHG emissions in waste treatment, advancing sustainable agricultural practices; promoting recycling and material management, and leveraging natural landscapes and ecosystems for carbon capture and storage.

Importantly, the EPA will evaluate applications based on their ability to deliver benefits to low-income and disadvantaged communities, in line with the administration’s Justice40 initiative. The Climate Pollution Reduction Grants are also stackable with dozens of other federal incentives to state and local governments. A strong application to the EPA should demonstrate how CPRG funds will complement initiatives supported by programs like the Greenhouse Gas Reduction Fund; grants in the 2021 Bipartisan Infrastructure Law; and numerous energy, transportation, and building electrification tax credits.

Shareable Resources

We’ve compiled guidebooks, FAQs, and case studies to share with state and local policymakers. Feel free to dive in for a closer look at designing effective decarbonization programs.

© 2023 Climate Changemakers