While the idea of a National Climate Bank is gaining momentum today at the federal level, the fundamental ideas behind it have a longer history than it might appear. In 2009, Congress came close to creating an institution called the Clean Energy Deployment Administration (CEDA) based on the green bank model. This history can provide insight into the movement towards a National Climate Bank, which improves on CEDA in several significant ways.
The story begins March 24, 2009, when Rep. Chris Van Hollen introduced the Green Bank Act of 2009. The bill aimed to capitalize a federal Green Bank by issuing green bonds. This institution aimed to provide low-cost financing to qualified clean energy and energy efficiency projects, and was referred to Ways and Means Committee.
At the time, the biggest climate policy proposal on the table in Congress was the American Clean Energy and Security Act (ACES), also known as the Waxman-Markey bill, which aimed to establish a nationwide cap-and-trade program. To ensure the green bank idea moved forward with the larger cap and trade bill, Rep. Van Hollen sought direct sponsorship by members of the Energy and Commerce Committee, which was leading the cap and trade bill.
On April 30, 2009, Rep. Jay Inslee (lead sponsor), Rep. John Dingell (lead co-sponsor) and Reps. Israel, Weiner, Klein, Halvorson, and Tauscher (original co-sponsors) introduced the 21st Century Technology Deployment Act, which provided for the creation of a federal green bank within the Department of Energy and gave it a new name: the Clean Energy Deployment Administration (CEDA). The bill also expanded and updated the loan guarantee program already available from the Department of Energy since 2005. Reps. Polis and Bean later co-sponsored.
A companion bill, also called the 21st Century Technology Deployment Act, was introduced in the Senate on the same day by Sen. Jeff Bingamen in the Senate Energy and Nature Resources (ENR) Committee. A bipartisan group of original cosponsors included Democratic Sens. Dorgan, Stabenow, and Shaheen, and Republican Sens. Murkowski, Voinovich, Lugar and Burr.
On the House side, Rep. Dingell offered CEDA as an amendment to the cap-and-trade bill. On May 19, 2019 the amendment was adopted with a 51-6 bipartisan vote in the Energy and Commerce Committee, and CEDA became part of the ACES cap-and-trade bill which then passed the full House.
Back on the Senate side, CEDA was added to the Senate ENR Committee’s version of comprehensive energy legislation, the American Clean Energy Leadership Act. This was also sponsored by Senator Bingaman. This bill passed the Committee, again with bipartisan support on a 15-8 vote.
Senate leadership decided that the only energy or climate bill that would go to the floor was one that contained cap-and-trade. And much to the dismay of climate advocates, the ACES cap-and-trade bill did not move forward in the Senate. The bipartisan American Clean Energy Leadership Act, which contained no cap-and-trade provision, was also never brought to the floor for a full vote. So despite bipartisan support for a national green bank in both chambers of congress, no such bill was voted on in the Senate and there is no national green bank today
Though CEDA’s story had an anticlimactic end in 2009, it sparked the green bank movement at the state and local level that we’ve seen over the last decade. This created a feedback loop, where new iterations of federal green bank legislation were shaped by what was happening at the state level. Green Bank Acts were introduced in the House and Senate in 2014, 2016 and 2017, each incorporating important updates based on the evolving landscape. This includes forming the federal green bank has a corporation, rather than within a government department. This also includes directing the federal green bank to capitalize state and local green banks, for the obvious reason that such entities now existed and were proving effective. And, importantly, each reintroduction of the idea lifted awareness and kept the concept vibrant for federal legislators.
The full evolution of the federal green bank idea is now embodied in the National Climate Bank Act, where for the first time since 2009 there is wide support in Congress and on the campaign trail. The bill incorporates the improvements of prior iterations of green bank legislation and takes them even further to meet the needs of today’s climate. The Climate Bank is now not just a corporation, but a private non-profit corporation. The Climate Bank directly finances projects in addition to capitalizing state and local green banks, and where they don’t exist, the Climate Bank will help build them. And beyond financing clean power, the Climate Bank will for the first time help bring an end to dirty power. So what looked like a sad ending for CEDA in 2009 may yet have a happy outcome!