NEMWI Releases Report on Greenhouse Gas Reduction Fund

The Northeast-Midwest Institute (NEMWI) has released a new report, “Deploying Greenhouse Gas Reduction Fund Capital: A Challenge in Fiscal Federalism,” a study focusing on the Greenhouse Gas Reduction Fund (GGRF) program as it starts its life in a vastly changed federal energy policy and public capital investment policy environment. The report is authored by Institute Policy Research Intern Charlotte Sadelain, Dartmouth College, ’26, and edited by Institute Senior Fellow for Public Finance Policy Thomas H. Cochran.

Beginning in 1977, the Northeast-Midwest Institute has researched ways in which the federal government can and does assist states’ public and private sectors to reduce both the costs and the negative environmental impacts of their energy sources and uses. In 1982, NEMWI published its “Users Guide to Government Energy Programs” that helped constituents and private sector partners understand how to access and most effectively use the 55 distinct financial and/or technical assistance energy programs offered by 18 federal agencies in 1982. 

The newly released NEMWI report highlights the threat to clean energy financing posed by Congressional advocates of deep appropriations reductions in the GGRF and the importance of local-, state-, and regional-level stakeholders around the country quickly coordinating and collaborating in new ways to identify pipelines of execution-ready projects to effectively capitalize on this opportunity to accelerate the clean energy transition. 

Some of the programs funded by The Inflation Reduction Act of 2022 (IRA) passed as a budget reconciliation bill can accommodate the needs of small and medium-sized enterprises (SMEs) which are needed to carry out a wide range of important manufacturing, installation, and maintenance functions in the U.S. clean energy transition. The Greenhouse Gas Reduction Fund (GGRF) administered by the U.S. Environmental Protection Agency (EPA) will provide through competitive award processes a total of $27 billion to several state and non-profit entities to invest in new clean energy technology, generation, and supply chain projects across the United States, largely through the financing of public and private SME-sponsored projects. 

The GGRF will support clean energy transition projects even in states governed by those who do not support energy transition goals by making non-profits, municipalities, and other entities that are capable of effectively and responsibly partnering with project developers as ultimate eligible end-use recipients. Delivering an equitable and coordinated approach to deploying this capital through the complex U.S. system of fiscal federalism will require excellent execution and oversight from an agency with no prior track-record in clean energy finance which must surmount the challenges of expert personnel shortages and political efforts to curtail the program. 

Read the full report, “Deploying Greenhouse Gas Reduction Fund Capital: A Challenge in Fiscal Federalism,” here.