How States & Cities Can Fully Harness Federal Climate Investments

Historic federal investments from the Biden-Harris Administration, including the American Rescue Plan Act (ARPA), CHIPS Act, and the Inflation Reduction Act (IRA), are empowering state and local leaders to create impactful changes in communities across the country, particularly when it comes to addressing climate change and expanding access to clean energy. These initiatives are not abstract policies; they are actively improving lives, creating jobs, and boosting local economies in communities across the country.

During a recent discussion hosted by the NewDEAL Forum, government officials and experts offered insights about these programs as well as advice about how local governments and underserved communities can capitalize on federal investments.

Experts participating included:

• Mandela Barnes, former Wisconsin Lt. Gov and former co-chair of the NewDEAL Forum’s Climate Task Force;
• Laurel Blatchford, Chief Implementation Officer for the Inflation Reduction Act (IRA), U.S. Treasury Department;
• Jon Mitchell, Mayor of New Bedford, Massachusetts, and NewDEAL Leader;
• Dan Carol, Senior Director, Milken Institute; and
• Luke McGowan, Head of Federal Initiatives, Bloomberg Philanthropies.

Here are five key takeaways from the discussion:

1.Historic Public AND Private Investments: As Laurel Blatchford emphasized, the IRA’s unprecedented clean energy tax credits have already incentivized over $500 billion in investments, with much of those resources concentrated in low-income areas with high populations of people without college degrees. Further, direct pay provisions enable states and localities to catalyze projects in renewable energy and energy efficiency by enabling tax-exempt entities, like governments, to receive benefits directly rather than as tax credits. Blatchford noted that the administration is not resting on its laurels, but is actively promoting IRA programs so that even more communities can benefit.

2. Concrete Local Impacts: Former Lt. Gov. Barnes highlighted the work of his new organization, Forward Together Wisconsin, which helps communities across the state deal with the complexity of the IRA, bridging the knowledge gap about what is in the law to enable a broader reach of the federal resources. The organization’s initiatives include knocking on doors to provide households with information about how to access clean energy programs and affordable home improvements. Barnes’ group also works with businesses, local governments, and nonprofits to help tap into IRA funding.

Jon Mitchell, Mayor of New Bedford, MA, shared a success story from his city, which has used ARPA and IRA funds to advance offshore wind projects and train workers, creating a ripple effect that enhances the city’s overall economic development. He explained that cities can layer and combine funds from different programs to amplify the impact of projects. However, as Mitchell highlighted, capacity disparities remain a challenge for many cities, especially those without experience in navigating federal programs.

3. Assistance is Available: All the speakers noted that federal grant and loan programs can be complex. As Luke McGowan pointed out, smaller and medium-sized cities often lack the resources to secure federal grants.

But the good news is that there is help available. Dan Carol highlighted the Community Infrastructure Center, which offers free technical assistance and tools to officials who are interested in applying for federal grants. The Milken Institute built an engine where officials can upload a project to discover funding streams for which they may qualify. The program then helps communities with initial steps to become eligible.

McGowan highlighted Bloomberg Philanthropies’ Local Infrastructure Hub, which connects city officials with experts to navigate the federal funding process. The initiative has already helped cities access $2 billion in funds, and participating cities are 1.5 times more likely to win a grant. The hub also organizes boot camps to help communities connect directly with experts who can assist.

4. Importance of Workforce Development: Blatchford noted that workforce and workforce training are the top issues, alongside permitting, that companies bring up as obstacles to move quickly to build clean energy infrastructure. She added that IRA tax credits have a new provision to help incentivize both apprenticeships and paying prevailing wages, which she hopes will create more demand. Barnes added that he is working with both community colleges and labor unions to offer more apprenticeship programs specifically around clean energy projects. And Mitchell noted that New Bedford is using federal investments to help with workforce development.

Further, officials must ensure that communities — especially underserved ones — have access to the tools and knowledge necessary to take advantage of these resources, which will set the stage for their long-term economic growth and resilience. The comments during this discussion mirrored those by experts at previous NewDEAL events who noted the importance of workforce development and the need for local elected officials to proactively connect underserved communities to training opportunities.

5. Collaboration is Key: While these federal investments have the potential to be transformative for years and decades to come, success depends on collaboration between all levels of government, as well as with nonprofits and businesses. Carol emphasized that many of the projects funded through laws like the IRA involve a multi-year process. Officials would do well, he said, to take the long view, and engage now with a “patient urgency” to achieve broad, multi-faceted success. For example, winning a grant to help build an electric vehicle (EV) battery plant could have positive ripple effects by bringing more opportunities for supply chain businesses needed to make the EV battery factory successful. Further, there would be opportunities for community colleges to obtain federal funds for workforce training programs.

McGowan used an example from Athens, Ohio, to highlight the need for collaboration. Initially, the city sought a $1 million grant, but officials realized they would have a better chance if they collaborated with other cities in the region. Instead of a $1 million grant, Athens led the way on a partnership between 20 towns, which won for $10 million to build EV chargers. In the end, it is better for Athens as well as the surrounding communities.

Funding for some programs, such as ARPA, expires soon. But many of the provisions in other laws, such as the IRA and CHIPS, will continue for many years, meaning it is not too late for more cities and states to take advantage of them. The NewDEAL Forum is proud to play a pivotal role in connecting these dots, empowering local officials to build stronger, more sustainable communities for the future.