Climate Pollution Reduction Grants: 10 considerations for states
The Inflation Reduction Act (IRA) provides $5 billion to support states and municipalities with planning and implementing greenhouse gas reduction strategies through the Climate Pollution Reduction Grant (CPRG). This funding provides an opportunity for states and municipalities, who have unique resources, economies, and politics, to make significant advances on their own energy, economic, and climate priorities.
Forty-six states have decided to accept $3 million each from the Environmental Protection Agency (EPA) in these planning grant funds, and have started receiving awards in late June. In 2024, those states, in addition to certain municipalities, will compete for the remaining $4.6 billion of implementation funding.
The transition to a clean energy economy requires a wide range of innovative technologies to provide practical solutions that work across our diverse economy and states. Successful deployment of these technologies requires realistic planning and focused implementation.
CATF supports states as they plan, develop, and implement their own pathways to zero-emission economic growth, and we’ve put together a list of 10 considerations for states to keep in mind as they spend CPRG planning funds over the coming months.
1. Go Big!
States can use CPRG funds to develop and advance big picture strategies to achieve their goals. Rather than treat CPRG as a narrow, isolated funding program, states can use it as an opportunity to develop overarching plans and strategies that have stakeholder buy-in and provide a common vision and roadmap for action. For example, a state might use planning funds to analyze its industrial sector, develop high-impact policies and programs, identify relevant federal funding, and build stakeholder awareness and support. States can use funds to develop economywide strategies, update goals, dive deeper into particular topics, and activate multiple state agencies.
CPRG funds provide opportunities to not only think big, but also to attract a broad range of partners. For example, states need not conduct all analyses and modeling themselves. They can leverage the expertise of other entities such as universities, think tanks, nonprofits, and private sector actors to provide analyses and information that help the state move forward.
2. Message Intentionally
State officials leading CPRG work should tailor framing and messaging about the program to fit the state’s priorities and political context. Aligning messaging around existing leadership priorities can help cultivate internal and external support during planning and implementation phases. Phrases such as “technology innovation,” “clean energy,” “transition to a clean economy,” “pollution reduction,” “climate action,” and “environmental protection” resonate differently depending upon the state. Intentional and consistent messaging from the outset can help shape internal and external perception for program success.
3. Engage the Public
Public engagement is a cornerstone of any successful project or policy. Given the condensed timelines for CPRG planning activities and applications for implementation grants, states may find it challenging to conduct thorough public engagement processes. Nevertheless, states can begin communicating with communities and the public now about the program, timelines, and the state’s approach to CPRG planning. Activating an inclusive stakeholder process early and being clear about when public engagement is most effective can lead to more diverse participation, richer input, stronger agreement on priorities, and ultimately shorter build times for large projects. Failure to meaningfully engage often leads to public consternation, distrust, delays, and litigation.
4. Increase Capacity
State agencies working on energy, clean air, and climate issues tend to be understaffed. CPRG funds are designed to help increase state capacity and expertise to develop and implement strong plans. Increased staffing and consultant capacity could be used to manage CPRG planning processes, secure additional federal resources, advance climate/energy related economic and jobs priorities, and work with external stakeholders.
5. Secure and Optimize Federal Resources
The IRA, Infrastructure Investment and Jobs Act, CHIPS and Science Act, and other recent federal funding actions make significant resources available to states, consumers, and the private sector. States can use CPRG funds to develop a comprehensive strategy for maximizing federal funding resources for the state. To this end, states can use CPRG funds to identify federal funding options, prioritize competitive opportunities, determine the optimal use of various funding sources, and strategize how to layer and intertwine funding to achieve priority outcomes. EPA created its climate action funding resource guide with CPRG planning specifically in mind.
6. Increase Economic Opportunities
CPRG planning and implementation funds can help states unlock the job creation and economic opportunities that come from investments in innovative clean energy technologies to advance hydrogen production/use, carbon capture, distributed generation, zero-emission vehicles, and advanced nuclear, and more. Planning, analysis, and stakeholder engagement around clean energy technologies can clarify potential economic opportunities in the state. This work can also clarify programs and policies needed to facilitate economic investment and remove barriers. Further, CPRG planning funds can be used to understand and advance key economic interests, such as business recruitment, support for existing industries and businesses, transitioning workers to new jobs/careers, supply chain development, and pivotal infrastructure investments.
7. Identify Workforce Needs
The deployment of low-carbon technologies and transition to a clean energy economy brings new workforce opportunities and needs. Existing businesses in a state may find new markets related to the energy transition, while newly recruited businesses may seek workers with unique or transferable skills. To remain globally competitive, states may want to ensure an available and competitive workforce to fill energy-related jobs across industries. Workers tied to the fossil fuel industry, in particular, may need support developing new skills or transitioning to a different field. States can use CPRG funds to better understand and address the new and transitional workforce needs of a low-carbon economy.
8. Set up Larger Investments
States can use their $3 million in planning funds to lay a foundation for large investments in their state. First, states and coordinating entities that utilize planning funds set themselves up to apply for competitive CPRG grants of $2 million to $500 million from the program’s $4.6 billion implementation fund. Even if a state does not plan to apply for implementation grants itself, it can bring in partners (e.g., local governments) during planning so that they are eligible to apply for implementation grants in 2024. Second, as described above, CPRG planning can involve strategy development for optimizing available federal resources to achieve state goals. In addition, planning can focus state and stakeholder attention on key issues and solutions, which can galvanize support for new state, private sector, and philanthropic investments. Focused and inclusive planning can help unlock funding and investment in states beyond CPRG funds.
9. Quickly Communicate Barriers
Challenges are bound to come up as states and local governments begin implementing CPRG funds in earnest. To minimize setbacks and meet CPRG timelines (e.g., PCAP by March 1, 2024; implementation grant applications due spring 2024), states should speak up early when they encounter barriers. EPA regional offices, nonprofits, universities, and even the private sector may be able to help. In addition, states can communicate barriers to EPA headquarters and the White House directly as well as to organizations in regular contact with them, such as CATF, other nonprofits, and state professional associations (e.g., NAACA, APCA, and ECOS).
10. Secure Contractors Early
With 46 states conducting significant CPRG planning in fall 2023 through spring 2024, demand for consultants to provide modeling, analysis, facilitation, and other services will surge. Securing the necessary contractors and experts early will ease the burden of overlapping demand across states. To alleviate the impact of contractor scarcity, states can ask EPA to provide technical support and analytical capacity that serves common needs.
Now is the Time to Act
The $5 billion CPRG program provides a unique opportunity for states to reduce their climate pollution and advance other state priorities at the same time. With focused attention and quick action, states can use this moment to go big, engage the public, and spur innovation in a way that benefits communities across the United States.
