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Welcome to Week 44 of Be the Change!
For over a year, I, along with thousands of other activists and advocates, have worked to get Congress to pass strong climate legislation. Even after Senator Manchin killed Build Back Better--which included $550 billion in climate spending--last December, we kept on keepin' on. Unfortunately, Manchin is back to saying we need an all-of-the-above energy strategy, and, worse, that we need to pass it on a bipartisan basis. Which is to say, I'm feeling less confident that Democrats, with only a few months left to legislate before the mid-terms, will get anything done. So, Capital Good Fund has announced an ambitious plan to scale up our climate-fighting initiatives while also issuing a plea to funders and impact investors to step up. That plea and plan is below.
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I hope you enjoy, keep fighting, and, if you enjoy my writing, ask your friends to sign up too.
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Tackling the Climate Emergency: An Urgent Call for Action and Funding
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As the goal to limit warming to 1.5C slips out of reach, Capital Good Fund seeks $25 million to kickstart a 5-year plan to deploy $1 billion in green loans to 40,000 underserved homeowners
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To the philanthropic and impact investing community:
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I write as the Founder and CEO of Capital Good Fund, a nonprofit lender whose mission is to create pathways out of poverty and advance a green economy through inclusive financial services. I also write as the father of a three-year-old son whose future is profoundly imperiled by the climate emergency. The International Panel on Climate Change (“IPCC”) recently released its sixth assessment of the status of the climate crisis, the findings of which are sobering, if also hopeful. While current emissions and policies put us on pace to far exceed the 1.5C of warming above which science says the planet is likely to experience irreversible damage, the technology needed to hit that crucial target already exists and is cost-effective. In the U.S., for instance, 77% of new electric-generation capacity over the next two years will come from wind, solar, and batteries. Still, it’s not enough: the IPCC says that investment in “the shift to a low-carbon world” is “about six times lower than it needs to be.”
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An EV fast-charging station in the parking lot of Capital Good Fund's headquarters
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Not only must we ramp up investments in a clean economy, we must ensure that they are done equitably: climate change disproportionately impacts communities of color, immigrants, women, and the low-income, yet these are the populations least likely to benefit from a green revolution. In America, for example, adopters of solar “tend to live in neighborhoods…with relatively low Hispanic and Black populations,” and only 13% come “from the lowest 40% of households.” Similar trends are seen in rates of adoption of EVs, heat pumps, and other cleantech. We cannot rapidly shift to a clean economy if so many communities are not fully engaged in, and benefitting from, the transition.
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We call on funders and impact investors to continue demanding that businesses, local, state, and federal governments, and others take bold action; but we also ask that they increase their investments in climate solutions by orders-of-magnitude. For despite it being the greatest challenge ever facing humanity, in 2020 just .005% of U.S.-based grantmaking went toward climate change mitigation and adaptation. And while record numbers of investments are going into cleantech, vanishing little is geared toward the underrepresented communities we serve. It is incumbent upon funders and impact investors to deploy capital toward environmental justice now, irrespective of what policymakers do.
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Solar panels on the roof of Capital Good Fund's headquarters in Providence, RI
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Capital Good Fund proposes to engage 40,000 underserved homeowners over the next five years in the clean economy by offering them long-term, low-rate loans for electrification: solar panels, battery backup systems, heat pumps, induction cooktops, energy-efficiency, home health and safety measures, electric vehicles, and more. Because it is imperative that project economics be such that homeowners save money from day one and benefit in other ways, including increased property values, better indoor air quality, and more comfort, we require catalytic loan capital combined with grant dollars to incentivize homeowners to participate and enable us to scale up the infrastructure to reach families. Specifically, we are seeking to raise $25 million in grant and low-cost capital to kickstart this five-year initiative.
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Over five years, we will accomplish the following:
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- Reach 40,000 homeowners with electrification loans
- Reduce greenhouse gas emissions by 135,000 metric tons per year
- Save homeowners $750 per year, for aggregate savings of $30 million per year
- Add an average of 4.1% in homeowner property value
- Support or create 6,000 jobs in solar and efficiency
- Deploy $1 billion in affordable capital in underinvested communities
- Deploy 225 megawatts of new residential solar-generation capacity
- Improve indoor air quality by addressing mold, mildew, lead, carbon monoxide and related home health and safety issues
A lower-income Latina homeowner residing in Central Falls, Rhode Island has a 2,000 square foot home, spends $150 per month on electricity, and a FICO score in the low 600s. She seeks to install an 8 kilowatt solar system for $28,800 that will eliminate her electric bills, but she has difficulty finding financing. Capital Good Fund approves her for a loan with an APR of 3.638%, term of 25 years, and monthly payment of $146; after receiving the Solar Investment Tax Credit, her loan payment drops to $112. Over the 25-year term of the loan, her and her family will save $18,000 on electricity bills. The installation is done by a local installer that pays a living wage. Hers is one of the first solar arrays in the neighborhood; soon others are asking about solar–leading to new rounds of job-creation, energy-savings, property value increases, and emissions reductions.
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The best time to act on climate was decades ago. The next-best time is today. Organizations like Capital Good Fund stand ready to move the needle: slashing emissions and creating jobs while ensuring environmental justice and engaging homeowners in a way that will increase the likelihood of political buy-in for additional, necessary climate-mitigation measures in the future. Our initiative–reaching 40,000 homeowners with electrification loans–creates a virtuous cycle of social, environmental, democratic, and planetary good. If funders and impact investors step up, we can work collaboratively toward a bright future for my son, the children of all living things on this Earth, and subsequent generations. People and institutions interested in supporting this effort should reach out to me at andy@capitalgoodfund.org.
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