Credit: (AP Photo/Martin Meissner)The Murphy administration aims to leverage federal dollars, state money and private capital to create a so-called Green Fund that could potentially finance hundreds of millions of dollars in climate action projects over the next decade.
The initiative, announced with few details by Gov. Phil Murphy in his fiscal year 2024 budget plan last week, would start with $40 million and seek to capitalize on the billions of dollars expected to be made available to states, communities and nonprofits as result of the Inflation Reduction Act of 2022. The law allocates $370 billion nationwide to a wide range of programs to address climate change.
With the Murphy administration recently setting a new target for a 100% clean-energy economy by 2035, reaching the goal will require much more significant reductions in greenhouse gas emissions in both the transportation and the building sectors and a more rapid shift to renewable energy.
Making plans for federal funds
To clean-energy advocates, the influx of additional federal funding for climate initiatives could bolster the state’s efforts to electrify the transportation sector, ramp up New Jersey’s reliance on solar energy and help lessen pollution in poor and mostly minority communities.
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“It is important to have New Jersey at the front of the line for the IRA, so that we can clean up the air and reduce our reliance on fossil fuels,’’ said Ed Potosnak, executive director of the League of Conservation Voters in New Jersey.
Among other programs, the new federal law allocates around $35 billion to $37 billion nationwide to support such programs, as well as money for energy retrofits for buildings, energy efficiency projects and grid-scale and community solar, according to Tim Sullivan, CEO of the New Jersey Economic Development Authority, which will oversee the Green Fund.
“It is some things that already happens, but not enough,’’ Sullivan said, referring to solar projects.
In setting aside $40 million in next year’s proposed budget, the administration is hoping to get a fast start in securing New Jersey’s share of the $35 billion. At this point, the federal Environmental Protection Authority has yet to promulgate rules for the program.
“My guess, there will be some kind of state match,’’ Sullivan said, adding that the Green Fund likely will involve a mix of federal, state and private money.
“The budget … includes $40 million to seed a new Green Fund at EDA, which could attract up to $280 million in private capital to advance the state’s bold and new environmental goals,’’ according to the administration’s Budget in Brief document.
Getting the carbon out
Those projects will focus on the state’s efforts to decarbonize the building sector, the second-largest source of greenhouse gas emissions. They would also include energy retrofits, energy efficiency and new cooling systems, Sullivan said.
“It’s a big to-do for us,’’ he added.
The state money for the new Green Fund still needs to be approved by the Legislature, which must adopt a new budget by July 1. But to date, the administration has not faced significant political opposition to its clean-energy agenda, although there has been some controversy over electrifying buildings and phasing out use of natural gas.
“It’s a great use of state money,’’ said Mary Barber, director of clean energy for New Jersey for the Environmental Defense Fund. “We have so much opportunity to leverage the federal money, use less state money and bring in more private capital to reduce greenhouse-gas emissions and other pollutants.’’
Doug O’Malley, director of Environment New Jersey, added: “We need to get more money from the feds for clean-energy projects in New Jersey. The Green Fund could help get more money and fund clean renewable energy projects.’’
