October 01, 2019

The National Climate Bank: The Cavalry Arrives behind the Green New Deal

Alex Kragie

In this moment of great urgency in the climate crisis, U.S. Senators Ed Markey (D-MA), Chris Van Hollen (D-MD), Brian Schatz (D-HI), and Richard Blumenthal (D-CT) have set the bar for climate policy leadership with their introduction of the National Climate Bank Act of 2019, a proposal to create a federal Green Bank. Policy makers around the world are hungry for viable policy solutions to win the battle against climate change. Green Banks are rising to the top of the conversation. Green Banks are dedicated finance institutions (often public or nonprofit) that work to connect clean energy projects with capital. Green Banks are not banks in the sense that they take deposits; instead, Green Banks ensure that financing, the lifeblood of any clean energy project, is readily available to green initiatives in a Green Bank’s jurisdiction. Often, Green Banks tackle the toughest problems in the industry, serving as the glue that holds together an otherwise unfinanceable project in the eyes of the private sector. Green Banks are not in the business of competing directly with private capital in perfectly liquid markets. Instead, Green Banks are in the business of expanding the pie of the financing market for clean energy projects across the country.

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