Can the Inflation Reduction Act Advance Climate Justice?

September 21, 2023 | 6:30 am
Katie Rodriguez/Unsplash
Chitra Kumar
Managing Director, Climate and Energy Program

One year ago, UCS worked in coalition with many other organizations to help pass the landmark Inflation Reduction Act (IRA), a law with historic climate provisions that includes numerous programs, policies, and a $369 billion investment that will drive significant cuts in heat-trapping emissions across our economy.

The number of provisions in the IRA aimed at accelerating the transition towards clean energy are plentiful and evident, but most programs were not written into law with the intent to center marginalized communities. And, some programs missed the mark entirely and create the risk of continuing to prop up fossil fuel extraction, which would harm communities and our climate.

All told, between the Infrastructure Investment and Jobs Act (IIJA), IRA, and prior funding, there are now levels of funding for climate action and infrastructure similar to the investments during the New Deal era that shaped our entire society. Coupled with the Biden Administration’s Justice 40 initiative and racial equity executive order, federal agencies also are tasked with implementing the IRA programs in ways that help tackle racial and economic inequality. EJ and climate justice advocates have long sought this.

But, in the past, inequality was baked into nearly every system and institution funded by the New Deal. With the funding available today, we must do better and focus on equity and justice right from the start. And, with communities’ needs at stake—and the clock ticking towards statutory spending deadlines—there is not a moment to lose to implement programs.

As a former federal program manager, I know that doing all this through competitive grants will require technical savvy and tremendous community capacity to organize and attract the funds communities deserve.

The IRA’s funding opportunities lie in a web of agencies and programs

Historically, few programs from the federal government have allowed for entities to holistically solve multiple complicated, technical, and social problems. Now, with IRA funding, and an aligned EPA leadership and administration, there’s a chance.

Take for example the problem of energy access for low-income households and marginalized communities. At UCS, we recognize that to meet the needs of communities with high energy burdens, it is important to have much more opportunity for distributed electricity generation with storage, owned, and controlled by residents of the community. Unfortunately, today, there are not only barriers from the grid perspective, but also incredible obstacles with the condition of housing stock. Many low-income homeowners need physical upgrades to their homes before they can contemplate investing in energy efficiency or solar upgrades. Some need infrastructure for basic human needs like clean water and sanitation and safe indoor air as well.

Yet, public funding streams aimed at improving public health, environment, and economic wellbeing come separately from myriad agencies—through US Department of Housing and Urban Development (HUD) for housing needs, from Agriculture (USDA) or EPA for water and sanitation improvements, or through Energy (DOE) for weatherization and solar photovoltaics. The way tax credits are structured assumes wrongly that homeowners or landlords have up-front capital. For renters, depending on who pays the electric bill, an upgrade could mean increased profits for the landlord rather than savings for the renter. 

IRA has expanded EPA’s ability to reach communities at their needs

In the case of IRA, Congress created broad legislative language that now multiple federal agencies must interpret and implement. The painstaking work of meeting communities at their needs means weaving together support from various authorities. This web of federal programs, policies, and funding opportunities is not easy to understand for even a seasoned bureaucrat like myself. But if more scientists and advocates, especially in the NGO community, are able to navigate through government websites and rules while maintaining humility as trusted community organizations take the lead, we are closer to advancing priorities.

The IRA will provide $369 billion in grants, loans, and tax credits for the energy, transportation, and agriculture sectors. Within that, are a number of programs that can help advance environmental justice priorities—including climate and environmental justice block grants, grants to clean up ports and diesel emissions, clean energy grants for low-income households and Indigenous communities, and climate resilience grants for Tribal and Native Hawaiian communities. Many of these programs were strongly advocated for by the environmental justice and national groups who are signatories to the Equitable and Just National Climate Platform (EJNCP), including UCS.

At the same time, the IRA also includes some harmful provisions, such as expanding leasing for fossil fuel extraction and perpetuating fossil fuel use through generous credits for carbon capture and storage which are a serious concern for communities—especially communities that have been disproportionately harmed by fossil fuel pollution.

The EPA is tasked with disbursing $41.5 billion in IRA funds to benefit public health and the environment. Tucked away in there is a provision for $3 billion in “Environmental and Climate Justice Block Grants” that has embedded in its language the explicit intention to center on “community-based nonprofit organizations” or CBOs. (Not to be confused with typical block grants, which go to states to administer, often becoming mired in another set of rules and political priorities.)

According to EPA, the goals of their grantmaking are to:

“Provide resources as soon as possible…to meet communities at their needs wherever they are in their journey: prove that investing in communities are the best investments to solve the toughest problems in the places with the biggest challenges…; and be the bottom-up to all the other top-downs!”

(You can hear more directly from EPA staff about how these grants will work in this explainer video where they shared their framework.)

When an environmental justice issue arises, communities often engage in similar processes: 1) assessing the problem, 2) planning for a different future and developing project plans, 3) piloting new ideas in collaboration with multiple partners, and then 4) leveraging large sums of public and private funding and financing to build the structures that endure, or to clean up the problem.

Source: U.S. Environmental Protection Agency

This can be seen in the story of ReGenesis, a non-profit based in Spartanburg, South Carolina, where a catalyzing EPA environmental justice small grant from more than 20 years ago piloted an approach of collaborative effort. Their work ended up including more than 200 agencies over many years of trust-building and leveraging. Harold Mitchell, President and CEO of ReGenesis Institute and member of the Equitable & Just National Climate Platform, has often shared how they were able to acquire nearly $300 million in public and private funding to transform the Forest Park and Arkwright neighborhoods. They did this while ensuring a democratic spirit of inclusivity of the neighborhood residents.

Based on that model, EPA is creating a range of programs using its significantly boosted annual appropriations ($100M in grants in both 2022 and 2023) and expanded authorities, alongside the $3 billion in IRA funding. To put that in context, the EJ program gave out only several million dollars over the previous decade. Much of this funding has a shorter fuse than other IRA programs because the spending deadline is September 2026.

Mitchell applauded the commitment saying, “I am extremely gratified by the levels of financial and technical support to community-based organizations, which have been made available by the Biden Administration, foundations, and other partners in the past few years. This support was not available when I began my work, which imposed limitations on the scope of our success. My hope is this current level of support will continue in the future because there are many communities that have critical public health, environmental, housing, health care, and other needs.”

EPA programs can strengthen local community groups

As I see it, EPA’s Environmental and Climate Justice programs are attempting to set the bar towards both procedural and distributive justice when it comes to federal grantmaking. UCS and groups like ours should support more federal programs prioritizing equitable and just procedures and outcomes.

Here are three categories of programs that EPA is managing for communities to increase their capacity and ability to take advantage of other federal grant opportunities.

  1. Flexible Technical Assistance (TA): If a community is interested in assistance to gather initial data on environmental or energy justice issues and learn how to apply for often complex federal programs, they can get free technical assistance from newly funded EJ Thriving Communities Technical Assistance Centers (TCTACs). These centers combine EPA’s investments with funding from the Department of Energy specifically to deal with energy justice issues; there is a specific set-aside for rural and remote areas. TCTACs provide free and basic capacity building directly to community-based organizations in their region with resources to facilitate getting to the next level of federal assistance. Each center received at least $10 million to set up a “hub-and-spoke” system of TA providers.

    What’s exciting about these centers is that for the first time EPA is adding technical assistance that can go beyond any one environmental issue–like brownfields, air, or water–in order to address more holistic challenges like climate resilience. And, while the hubs have government funding, there’s no limit to who could be considered a spoke.

    What’s more, since communities’ needs often fall outside of EPA’s authority, EPA set the table for joint technical assistance with other federal agencies that fund infrastructure, economic and community development, and disaster recovery–all part of what contributes to quality of life, well-being, mobility, housing choice, and resilience in neighborhoods–through the Federal Interagency Thriving Communities Network. I’m proud to have helped implement this coordination structure. The network holds a set of equity- and justice-centered principles that haven’t been as explicit in prior attempts to set up interagency collaboration.

    This network is intended to drive more holistic support from across participating federal agencies with aligned goals. It is also a potential conduit for advocates to provide substantive recommendations to agencies on how their programs could better serve community needs across grants and policies.
  2. Connecting to Smaller Grants: The 2023 Environmental Justice Thriving Communities Grantmaking (EJ TCGM) opportunity is projected to award approximately $550 million to 11 grant makers to redistribute hundreds of sub-grants in 2024 and 2025. Communities can start to prepare ideas for submission in 2024 once the larger awards are made.
  3. Grants with EPA Staff Involvement: In a webinar earlier this year, EPA also mention EJ Collaborative Problem-Solving (CPS) grants and the EJ Government-to-Government (EJG2G) grant program. The key to both of these is that EPA administers them directly as opposed to using a third-party intermediary, which is valuable for communities that see a need for a federal player to be at the table to intercede on sticky issues, like holding industry accountable for environmental contamination. Sometimes, even issues that are outside of EPA jurisdiction can get the attention they deserve through interagency partnerships.

    EPA still hasn’t announced its biggest investment from the IRA Environmental and Climate Justice Change portion, the Community Change Grants, which will total $2 billion in implementation grants. The official notice of funding availability is expected to be announced next month.

Meeting the moment

The challenge before us is real and critical—to transform the very fabric of our economy and society, which is so intrinsically woven with fossil fuels. UCS has been striving to work intentionally with community partners on a range of clean energy and climate resilience projects over the years. As a national group, we know we have more work to do to help set right long-standing histories of power and resource inequities in the climate space. We look at this surge of funding from the IRA for grassroots-led projects as a positive development towards creating a more just and sustainable world. I’m excited to join the team at UCS to accelerate this intention.

Given that the statutory deadline for spending down funds from many of these programs is in 2026, we will be seeing many grant programs accepting applications in the coming weeks and months. There is no time to lose!

If intention becomes reality, in the next 20 years, we will see a completely different landscape of solutions proposed because of who’s at decision-making tables. We are watching ideals be seeded through today’s public and private investments in this historic time. It may just lead to the transformation humanity needs to ensure survival into a new millennium.