EV Charging Stations at the University of Houston: The city is working to expand public and private charging opportunities across the city with the goal of increasing regional EV sales to 50 percent of annual new vehicle sales by 2030. With the passage of the Inflation Reduction Act (IRA), the federal government has finally taken action worthy of the climate crisis we are facing. As the largest federal investment in climate, clean energy and environmental justice in U.S. history, it provides funding for commitments the country has already made—both to the world, in our contributions to fulfilling the Paris Agreement, and to ours own historically disadvantaged communities are bearing the disproportionate burden of climate change. Now that $374 billion is allocated to climate-smart infrastructure and innovation projects in the US, how will policymakers know how best to use those funds?
Fortunately, we already have a blueprint for this incredible endeavor: every year, thousands of cities and companies report on project ideas in their annual environmental briefing to advance climate goals. They do so voluntarily because disclosure is a strategic lighting and planning tool that helps them prepare for future environmental risks and opportunities, remain competitive and demonstrate progress toward a sustainable economy.
Our organization collects and analyzes these reports, and the result is a treasure trove of data, including project plans to strengthen local communities and innovative ideas to boost economic growth. Now that IRA funds are made available, these disclosures essentially provide policymakers with a roadmap for where and how the funds can best be used.
Future-oriented companies already see enormous opportunities in climate-friendly projects. In 2019, leading global companies estimated $2.1 trillion in potential growth if they embarked on the low-carbon transition. From developing plant-based foods to ramping up production of electric vehicles (EVs), companies are identifying new avenues of innovation and using climate disclosure to communicate these ideas to investors and policymakers. General Motors, for example, explains in its annual climate statement how it intends to achieve its goal of producing only electric vehicles by 2035. The company’s actions will help spur an entire industry that supports automakers, from auto parts makers to renewable energy producers.
Cities also have much to gain from smart implementation of IRA funds and are already emphasizing the need for more funding to make their communities safer and more resilient in the face of the climate crisis. Last year, 108 US cities reported 188 ongoing sustainable infrastructure projects worth US$29.6 billion. These include projects related to electric vehicle transportation, flood protection, reforestation, clean energy and more. Houston, for example, has worked with a local nonprofit to expand public and private EV charging opportunities across the city, with a goal of increasing regional EV sales to 50 percent of annual new vehicle sales by 2030.
Central to these corporate and city commitments is robust, widespread demand for renewable energy. More than 370 companies worldwide are now RE100 members, who have committed to sourcing 100 percent renewable energy for their operations. These companies together use more electricity each year than the UK as a whole and already get almost 45 per cent of their electricity needs from renewable sources.
The IRA’s focus on renewable energy will also massively benefit cities that already know the value of switching to fossil fuels. In 2021, 46 local governments across the US reported 52 renewable energy projects totaling $159 million, but say they currently need $117 million to complete them. Money from the IRA will go greener, farther and faster when it goes to communities already committed to climate action. And millions of jobs could be added to the US economy by promoting these sustainable infrastructure projects, promoting a more equitable transition to a net-zero economy.
And when these projects are designed and implemented with a focus on racial and social justice, more benefits can reach the communities hardest hit by the climate crisis. Investing in environmental justice is a key focus of the new law, in part because of the seismic changes that have taken place in the private sector, as companies and investors demand such changes and recognize that they are critical to sustained economic growth.
As federal lawmakers noted in last year’s talks about the importance of climate finance disclosure, investments like the IRA funds will go further and faster if they take advantage of the transparency that disclosure brings. With disclosure data as a blueprint, decision makers can determine where to best spend funds on innovation and infrastructure that will propel the US economy into the 21st century and beyond.
Elizabeth Small is the Director of Policy for CDP North America, a nonprofit organization that pioneered environmental reporting in 2003 and today operates and maintains the world’s only integrated global environmental reporting system covering the impacts of climate change, water and forests. She oversees policy-related initiatives across North America for CDP and provided data and insights for government leaders during the development of the Inflation Reduction Act.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s publishers or management.
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