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National Climate Bank could mobilise $1 trillion for clean energy

The Coalition for Green Capital has published a white paper illustrating how, with just $35bn capitalisation, the bank could raise the funds from public and private investment.

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National Climate Bank could help make the most of every public dollar
National Climate Bank could help make the most of every public dollar

The Coalition for Green Capital (CGC) has published a white paper detailing how a National Climate Bank capitalised with just $35bn could mobilise up to $1 trillion in total public and private investment.

 

According to CGC, these investments could rapidly and cost-effectively accelerate the clean energy transition by providing financing to clean energy projects.

 

National Climate Bank Act

 

The structure of the proposed National Climate Bank is based on the National Climate Bank Act introduced in July by US senators Ed Markey and Chris Van Hollen.

 

The bill establishes an independent non-profit institution with the goal of maximising greenhouse gas reductions per public dollar, which would be capitalised with public funds and be chartered to operate for 30 years.

 

The idea of a National Climate Bank has also become a part of the 2020 Democratic presidential campaigns. Senator Kamala Harris’ new climate plan endorses the National Climate Bank Act and, CGC notes, polling indicates widespread public support for the idea.

 

Other candidates including Pete Buttigieg and Julián Castro propose similar financial institutions: the creation of a $250bn Clean Energy Bank, and $200bn Green Infrastructure Fund, respectively.

“We must mobilise a massive wave of investment to get big projects funded and transition the economy from carbon to clean”

The report sets out to compare the proposed Climate Bank with other relevant institutions including commercial banks, global development banks, and existing Green Banks.

 

It studies the established track records of these institutions to set forth reasonable expectations for the techniques the Climate Bank could use and the results it could achieve, finding that $1 trillion in total investment impact is achievable from $35bn in initial capitalisation.

 

“The National Climate Bank is an elegant policy solution that makes the most of every public dollar, without raising energy costs for consumers,” said Reed Hundt, CEO, Coalition for Green Capital.

 

“With the impacts of the climate crisis becoming more apparent by the day, there’s no time to waste. We must mobilise a massive wave of investment to get big projects funded and transition the economy from carbon to clean. The Climate Bank provides a clear and practical way to do exactly that.”

 

This paper is the first in an intended series which will explore the proposed National Climate Bank, putting financial techniques and concepts into plain language and adding context and detail to the potential workings of the new institution.

 

The full report is available here: Mobilizing $1 Trillion Towards Climate Action.

 

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