Financing Nature-Based Solutions via the Greenhouse Gas Reduction Fund

Abstract

For the past decade, state and local green banks have successfully accelerated private investment in renewable energy, energy efficiency, and environmental infrastructure projects in their specific geographies. While green banks have historically focused primarily on clean energy and renewable projects, there is a growing interest in using nature-based solutions, or environmental infrastructure, to meet the climate and community goals shared by many of these mission-oriented financial institutions. The $27 billion Greenhouse Gas Reduction Fund (GGRF) in the Inflation Reduction Act—particularly the $14 billion National Clean Investment Fund and $6 billion Clean Communities Investment Accelerator—represents a once-in-a-generation opportunity to leverage private capital for investments in environmental infrastructure and nature-based solutions, but the groundwork needs to be laid now. This document summarizes the relevant GGRF funds and their applicability for nature-based solutions.