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EPA’s Greenhouse Gas Reduction Fund is Wasteful and Duplicative

The House of Representatives is scheduled to vote on H.R. 1, the Lower Energy Costs Act, this week. The package of legislation includes several provisions to modernize permitting and bolster American energy security. Tucked away in H.R. 1 is a measure that would repeal the Environmental Protection Agency (EPA)’s $27 billion Greenhouse Gas Reduction Fund. Passed under the Inflation Reduction Act (IRA), the Fund is a classic example of wasteful government spending and ignores the root problems of accelerating clean energy deployment in communities across the country. Repealing it would benefit taxpayers, and Congress and agencies should find more effective ways to engage and assist communities.

>>>READ: Explainer: What is the Lower Energy Costs Act?

Though the program has commonly been labeled a “green bank,” the EPA will not be awarding money directly to projects that better communities. Instead, much of the money will funnel from the EPA to NGOs and non-profit organizations who will then “provide loans, grants, and other forms of financial and technical assistance to eligible projects.” While well-intentioned in its aim to help disadvantaged communities, the fund is duplicative of several initiatives at the Department of Energy and the work that states and the private sector are already doing. 

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The federal government should focus on maximizing the efficiency, transparency, and quality assurance of the energy assistance programs that already exist. Doing so would help low-income and disadvantaged communities save on their energy bills, improve environmental outcomes and reduce emissions. By running the fund through EPA and to NGOs, however, the Greenhouse Gas Reduction Fund is ripe for cronyism, waste, and abuse. 

Navigating onerously complex rules to secure federal funding is indeed challenging. It’s especially challenging for disadvantaged communities who may not have the resources for technical assistance and all of the regulations guiding funding and implementation for clean energy projects. While rules are in place to prevent corruption and fraud, they can also be unnecessarily complicated. Rather than throw more money at the problem, policymakers and agencies should fix the underlying problems that make it difficult for communities to engage. For instance, Alicia Brown, the clean energy program manager for the city of Savannah, Georgia, penned an open letter to DOE in the beginning of the year with a blunt message: Enough with the technical assistance. In the piece, Brown wrote: 

[F]or city sustainability professionals like myself, grant applications serve as black holes on our time. Apart from 12-page narratives that must touch on every overly-specific bullet point from a sprawling rubric, many funding opportunities require a project to be almost fully baked to be competitive. In other words, in addition to writing what feels like a dissertation, applicants have to do community engagement and develop a project or program to 90% completion before having any certainty that there is a path to implementation. Relationships between governments and frontline communities are already strained from decades of broken promises and transactional interactions. Engagement efforts with no tangible outcomes only make that worse.

Brown goes on to say: 

[I]n a misguided effort to meet applicant concerns, DOE has emphasized technical assistance in many of its programs, which would be a laudable goal if it didn’t come at the expense of directing cold hard cash to organizations that need it. Take the Energy Efficiency and Conservation Block Grant program, for example. Congress appropriated $550 million of flexible, formula-allocated funding to local governments, states and tribes for a wide array of energy efficiency and energy conservation activities. What did DOE do? Skim $110 million off the top for administration and “technical assistance.” $550 million for a whole country is already a paltry amount, and DOE made it even worse with its 20% cut that will likely do little to make the program better or easier to navigate.

What’s to stop the GHG Fund from a similar fate, though with this fund taxpayer dollars will transfer from EPA to politically connected NGOs. Both the public and private sector can better engage with communities and meet the specific needs of the communities by simply fixing broken processes. That will require harder work than simply spending other peoples’ money. 

Furthermore, both parties understand that higher electricity bills and prices at the pump disproportionately hurt low-income families who are forced to spend a larger share of their budget on energy bills. Consequently, policymakers should look for ways to enhance American energy production. By hamstringing domestic energy production, through prohibiting lease sales and canceling the Keystone XL Pipeline, the Biden administration has limited supply which has led to higher energy costs. Kneecapping the U.S. energy sector also increases reliance on dirtier oil and gas that is sourced overseas, leading to higher emissions and more air pollution. An all-of-the-above approach will get more energy supplies online, driving down costs for American families. Fixing our broken permitting processes will help get that energy online even faster. 

>>>READ: Building Green Infrastructure Requires More Efficient Permitting

Finally, Congress should reduce all wasteful government spending. A bloated federal budget limits our ability to invest in important projects that address climate change and energy security such as research and development efforts at the Department of Energy. Recent unchecked federal spending has also forced the Fed to increase interest rates in order to prevent a recession. These high interest rates hurt small businesses, consumers, and upward economic mobility. They also force families across the economic spectrum to reconsider investments in luxury items including clean energy upgrades on their homes. 

The EPA’s $27 billion Greenhouse Gas Reduction Fund is a stereotypical example of wasteful government spending. It will likely lead to cronyism and mismanaged spending while fewer dollars go to the communities the Fund purports to serve. To see true progress in underserved communities, lawmakers should look for ways to reduce permitting delays, unleash domestic energy production, and end wasteful government spending. Repealing the Greenhouse Gas Reduction Fund is a great place to start.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

Copyright © 2020 Conservative Coalition for Climate Solutions

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