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Democratic candidates are building momentum for a National Climate Bank

Democratic candidates are building momentum for a National Climate Bank
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With the newest flurry of climate policy proposals ahead of CNN’s Climate Crisis Town Halls, half of the top 10 Democratic presidential candidates are now incorporating the Green Bank approach into their plan for the clean energy transition.

Sen. Kamala HarrisKamala HarrisBiden takes victory lap after Senate passes coronavirus relief package It will be Vice (or) President Harris against Gov. DeSantis in 2024 — bet on it Trump sued by Democrat over mob attack on Capitol MORE (D-Calif.) has endorsed a National Climate Bank. South Bend, Ind. Mayor Pete ButtigiegPete ButtigiegThe Hill's 12:30 Report - Presented by ExxonMobil - Senate begins marathon vote-a-rama before .9T COVID-19 relief passage The Hill's Morning Report - Presented by Facebook - Virus relief bill headed for weekend vote Biden turns focus to next priority with infrastructure talks MORE has proposed the creation of a $250 billion Clean Energy Bank. Former HUD Secretary Julian CastroJulian CastroMore than 200 Obama officials sign letter supporting Biden's stimulus plan OVERNIGHT ENERGY: McEachin signals interest in Biden administration environment role | Haaland, eyed for Interior, stresses need for Native American representation | Haaland backers ask Udall to step aside in bid for Interior post Julian Castro announces relaunch of 'Adios Trump!' shirts to raise money for young immigrants MORE has proposed a $200 billion Green Infrastructure Fund. Former Tex Rep.  Beto O'RourkeBeto O'RourkeTexas Republican criticizes Cruz for Cancun trip: 'When a crisis hits my state, I'm there' Progressives target 'Cancun Cruz' in ad to run on 147 Texas radio stations 'Get off TV': Critics blast Abbott over handling of Texas power outages following winter storm MORE plans to channel public investment through a "new dedicated finance entity." Sen. Elizabeth WarrenElizabeth WarrenSenate rejects Sanders minimum wage hike Philly city council calls on Biden to 'cancel all student loan debt' in first 100 days Hillicon Valley: High alert as new QAnon date approaches Thursday | Biden signals another reversal from Trump with national security guidance | Parler files a new case MORE (D-Mass.) calls for the expansion of the Department of Energy's Loan Program Office.

The common thread between these proposals is the establishment of a dedicated institution empowered to combine public funds with private investment, providing low-cost financing to clean energy projects and accelerating the transition of our energy sector away from fossil fuels.

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This is precisely the model pioneered by existing Green Banks at the state and local level. These institutions have driven nearly $4 billion in clean energy investment in the U.S. over the past decade. They’ve proven themselves to be cost-effective yet powerful climate policy tools that also lower customers’ energy bills.

This is also the model that the National Climate Bank Act, introduced in the Senate this summer by Sens. Ed MarkeyEd MarkeyHillicon Valley: High alert as new QAnon date approaches Thursday | Biden signals another reversal from Trump with national security guidance | Parler files a new case Senators question Bezos, Amazon about cameras placed in delivery vans OVERNIGHT ENERGY: House Democrats reintroduce road map to carbon neutrality by 2050 | Kerry presses oil companies to tackle climate change | Biden delays transfer of sacred lands for copper mine MORE (D-Mass.) and Chris Van HollenChristopher (Chris) Van HollenBiden convenes bipartisan meeting on cancer research Lobbying world Menendez reintroduces corporate diversity bill MORE(D-Md.), draws on in establishing a National Climate Bank as an independent non-profit financial institution, and capitalizing it with $35 billion in federal funds. The bill presents the most detailed framework currently available for what such a large-scale Green Bank could look like in the U.S. 

The Climate Bank would invest in projects including clean energy, energy efficiency, clean transportation, and the facilitation of the retirement of fossil-fueled power. In directing its investments, it would prioritize environmental justice and would generate economic benefits for communities affected by the transition away from fossil fuels.

A new CGC analysis of the National Climate Bank Act has found that, over its 30-year chartered life, the $35 billion Climate Bank could drive up to $1 trillion in total investment. It could do so using methods already proven by other comparable institutions, including commercial banks, global development banks and existing Green Banks.

The idea of a National Climate Bank has also achieved positive approval with voters across the political spectrum, a rare feat for any form of climate policy. A poll from CGC found that, after reading a brief description of the National Climate Bank, 59 percent of voters were supportive and just 16 percent were not.

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The 2020 candidates’ plans are not interchangeable; there are meaningful differences between them on ideas like carbon pricing, support for specific technologies, and more. This makes it all the more noteworthy that the idea of a dedicated institution to mobilize clean energy investment has such broad appeal and can work harmoniously with other policies and programs. In practical terms, policies like carbon pricing, tax credits and renewable portfolio standards all factor into the economics of what makes a renewable energy project workable. These complementary policies raise the price of fossil-fueled power or reduce the cost of developing a clean energy project. A Climate Bank meets those economic conditions wherever they are. It takes projects that are on the edge of profitability and makes them viable, regardless of where that edge exists.

As images from Hurricane Dorian blanket the news, we cannot afford to leave any tool unused that could help us drive the clean energy transition more quickly. Bold plans for public investment can and should be paired with a Climate Bank to harness the power of the private sector on a trillion-dollar scale. If candidates are serious in their calls for an 100 percent clean energy system, it’s time to make the most of each dollar of funds, and it’s past time for delay. 

Reed Hundt is the CEO of the Coalition for Green Capital, a nonprofit that has worked to establish and support Green Banks. He is also former chairman of the Federal Communications Commission (FCC) from 1993-97, and is currently principal of REH Advisors.