Guide to Help Cities Make the Most of Billions in Climate Funds

Two years after the previous administration officially pulled out of the Paris Agreement, the federal government has made historic commitments to climate action through the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA). Congress and presidential administrations may not sustain this trend between now and 2030, but local governments are embracing their potential to lead whatever may come from Washington.

“Cities are the place where a good portion of important climate action will and must take place,” says Satya Rhodes-Conway, the Mayor of Madison, Wis., and co-chair of Climate Mayors, a bipartisan coalition of nearly 500 mayors in 58 cities.

In partnership with the global C40 Cities network, Climate Mayors recently published Climate action and the Inflation Reduction Act, a guide to help leaders in local government make the most of its nearly $370 billion investment in climate mitigation.

“We want cities to be fully prepared to take advantage of the funding that's coming, because we believe cities are the most effective place to take action,” says Rhodes-Conway.

Incentives, Not Regulation

The IRA does not attempt to control warming through regulation. Instead, it is designed to create financial mechanisms that foster the implementation and development of technologies and strategies that reduce emissions.

The bill was passed through the budget reconciliation process, notes Kate Wright, the executive director of Climate Mayors, and the bulk of the funding is in the form of tax credits and financing. “There are opportunities to apply for grants, but what we’re really trying to do is to get mayors and local leaders to think more broadly about the role that they can play.”

Of the $369 billion included in the IRA, only $27 billion is for grants to tribal, state and local governments. The majority, $227 billion, is allocated for business tax credits for clean energy production, manufacturing, clean vehicles and low-carbon energy systems in residential and commercial buildings.

“Implementation is going to be key,” says Amy E. Turner, a senior fellow at Columbia Law School Sabin Center for Climate Change Law and a consultant for the guide. “The IRA makes funds available in various ways, but it’s going to fall on local governments to tap that funding and deploy it.”

This means that local governments will need to reach out to other jurisdictions, locally and regionally, and engage with private-sector partners to determine what needs to be done to facilitate clean energy production, and clean tech use and manufacturing. This could range from helping businesses and individuals access IRA tax credits to streamlining permitting processes for renewable energy or EV charging infrastructure.

It's also a matter of expanding thinking about what “climate action” encompasses and how it relates to housing policy, street design, transit and transportation, says Rhodes-Conway. Wright underscores another challenge covered in the guidebook: protecting underserved communities from the effects of new fossil fuel facilities developed with IRA funds, an allowable use.

State government has its own role in smoothing the way for the energy transition. “We want to make sure that local leaders are reaching out to their state energy offices, lifting up their priorities right away so that we can make sure that when the funding flows down through the state energy offices it’s going to work well and be put to good use based on local needs,” says Wright.

Large cities, with robust sustainability offices, are likely to have capacity to sort through the IRA’s complexities. “Our large population centers are large sources of greenhouse gas emissions and should be securing funding and making progress,” says Rhodes-Conway. “But we want to make sure that smaller cities, particularly low-income and disadvantaged communities, are able to access this funding as well — that’s where the guide comes in.”

Some of the provisions in the IRA will play out over a time span as long as 10 years, Wright notes. Another new resource, the Climate Risk and Resilience Portal (ClimRR), can help local leaders get a better idea how warming could impact their communities over longer time spans, so the plans they make today for IRA (or BIL) funds are in sync with future realities.

Mapping Future Risk

ClimRR is a collaboration between the Federal Emergency Management Agency (FEMA), AT&T and Argonne National Laboratory. An interactive resource, it draws on several data sets to give state, local and territorial planners and emergency managers access to localized data about future climate risks.

At present, ClimRR can generate projections regarding temperature, precipitation, drought and wind conditions; in coming months, wildfire and flooding data will be added. The projections are based on warming scenarios developed by the Intergovernmental Panel on Climate Change that reflect atmospheric concentrations of greenhouse gases resulting from varying degrees of mitigation efforts.

Jessica Filante, director of global environmental sustainability for AT&T, explains that these projections can be overlaid with other information, such as demographic data, to connect the dots between future risks and vulnerable populations.

ClimRR benefits from work AT&T has done for years to develop “risk scores” for use in network planning that consider drought, flood, wind and wildfire as part of a workflow to ensure network resilience. It also draws on data collected by FEMA for its Resilience Analysis and Planning Tool (RAPT).

The supercomputing tools behind ClimRR will enable projections for areas as small as 200 meters by 200 meters, Filante says. “That’s much more actionable when you think about where you should elevate a platform or clear brush.”

Municipal budgets are constrained. “You need to be surgical, precise and accurate,” says Filante. It may not be a whole region that is at risk, but a particular area. “Our hope in making this data more accessible is that it can be leveraged for municipal planning and grant applications.”

The Important Thing Is Progress

COP27 didn’t result in international commitments that match the urgency of the climate crisis, says Turner, nor have previous meetings. This underscores the role that all levels of government, including local government, need to play in addressing climate change.

“There are so many different funding streams in the IRA and the BIL, that I would encourage local government folks to get familiar with as many aspects of the two laws as possible and identify pots of funding that align with the kinds of projects they want to do,” she says. “The most useful piece of funding is going to be the one that aligns with the projects that you're undertaking.”

An emphasis on equity is woven throughout the IRA, and supporting and partnering with front-line communities and community-based organizations is essential, says Wright. “Federal agencies are still working out some of the guidelines for different programs, and to the extent that we can put as much of the decision-making in the hands of local leaders and community groups, we’ll see the best benefits in terms of both climate and the related goals of economic development and equity.”

“The first and most important thing is that every city makes progress,” says Rhodes-Conway. A mayor is likely to know best what that looks like in any given city, and the IRA guide from C40 and Climate Mayors can help a city find a path to funding.

“The federal government is focused on helping local governments make a difference on climate,” says Mayor Rhodes-Conway. “We should absolutely be taking them up on that and making as much progress as we can at the local level, as quickly as we can, while we have federal support to do it.”