With an eye on Massachusetts' mid-century greenhouse gas emission reduction commitments, Gov. Maura Healey launched a "green bank" initiative June 13 that she hopes will attract private investment and federal money to pay for building retrofits and new construction of decarbonized buildings in the state.
The new Massachusetts Community Climate Bank will get started with $50 million from the state's Department of Environmental Protection and will be run by MassHousing, marking Massachusetts as the first state to establish a green bank within its housing finance agency and to make affordable housing the focus of its strategy, Healy said.
Her administration said it expects to provide low-cost capital and "innovative deal structures" to promote the integration of clean energy and efficient technology into affordable housing development and mortgage products for home improvements.
The State House News Service in Boston reported that the program aims to pick up the pace on building decarbonization projects by lending directly to building owners and by "attracting and de-risking" loans or investments from private lenders.
The effort looks to take advantage of affordable housing refinance cycles to help pay for heat pumps, building envelope efficiency upgrades, heat pump water heaters, high-efficiency appliances and solar panels as part of affordable housing renovations.
"The Massachusetts Community Climate Bank will be our financial engine for moving forward on our climate goals, relieving the pressure of high housing costs and creating good jobs and healthier communities," Healey explained. "This first-of-its kind initiative is going to make our state more competitive, affordable and equitable — and it's going to show that in Massachusetts, we can lead the world by leading with our values and leaving no community behind."
Green Bank Aims to Help State Reduce Its Emissions
In addition to a minimum 50 percent reduction in emissions by 2030, the state must reduce emissions by at least 75 percent by 2040 and at least 85 percent by 2050 — all compared to the baseline of 1990 emissions levels. Policies like carbon sequestration are expected to help the state get the rest of the way to net-zero emissions by 2050.
The building sector is responsible for about 25 percent of greenhouse gas emissions in Massachusetts, the state said, and up to as much as 70 percent in its larger cities. The Clean Energy and Climate Plan calls for a 49 percent reduction in greenhouse gas emissions from residential heating by 2030 and a 95 percent reduction by mid-century.
Because buildings last for decades, the state's decarbonization strategy is emphasizing retrofits, as opposed to building new efficient structures. Officials previously estimated that more than eight out of 10 buildings that will exist in Massachusetts in 2050 are already built.
"To achieve net-zero emissions by 2050, we in the commonwealth need to get to work renovating and electrifying our dated housing stock as soon as possible," said state Sen. Marc Pacheco, D-Taunton. "This initial investment is a critical step for a just transition to a sustainable future and I look forward to supporting bold action amplifying these efforts."
State Will Invest in Various Decarbonization Measures
The Healey administration said the green bank will focus first on the affordable housing market since low- to moderate-income residents generally pay a disproportionate share of their income toward energy costs, have less control over their residences, and have fewer resources to invest in clean energy technology.
Over time, officials said, the bank will diversify its investments to include "other decarbonization measures that benefit communities."
The governor's office said the new green bank also will be positioned to compete for federal funding from the National Clean Investment Fund through the Inflation Reduction Act (IRA) of 2022, and possibly to connect to other federal finance opportunities, like those at the U.S. Department of Energy Loan Program Office.
Earlier in June, the National Oceanic and Atmospheric Administration (NOAA) unveiled a $2.6 billion framework that the agency said is designed "to build climate resilience and support coastal communities" with IRA funds. Details on how states could seek some of that money are expected to be available soon, according to State House News Service.
Healy Keeping an Earlier Promise
Healy's announcement makes good on a pledge the governor made on her first day in office. In her inaugural speech in January, she said she would create a green bank "to foster investment in resilient infrastructure and attract new businesses."
As a candidate for governor, Healey said she would not commit to pursuing a carbon tax, telling a WBUR Radio and Environmental League of Massachusetts forum that she favors multi-state programs like the Regional Greenhouse Gas Initiative and the Transportation Climate Initiative, the latter a similar market-based compact aimed at reducing transportation emissions that never materialized due to fears that it would hike gas prices.
"I know things fell apart, okay," Healey said in May 2022, referring to the failed program, "but we're in a different place than we were [one, two or three years] ago. And we have an opportunity to revisit that, and I promise as governor I will bring the urgency to that and the commitment to trying to drive regional solutions to our climate needs."
Today's top stories
