Funding the Future of Decarbonization

Q&A

Q: How are disadvantaged communities involved in the conversation surrounding the city’s climate justice goals? 

Joe Chavez, Deputy Director, Sustainable Buildings, NYC MOCEJ : In 2017, New York City passed Local Laws 60 and 64 to assess environmental equity issues and develop a plan to incorporate environmental justice into the fabric of City decision-making. This legislation centers on three main products: a report, a mapping tool, and a plan. To carry out this work, the local law mandated that the Mayor and City Council appoint an independent Environmental Justice Advisory Board (EJAB). EJAB is led by the Mayor’s Office of Climate & Environmental Justice and comprises external environmental justice leaders, including advocates, academics, and public health experts, to advise the City as it implements these laws and to bring this work to New Yorkers through public hearings and other forms of engagement. The EJAB’s charge is to ensure the work is grounded in the lived experiences of New Yorkers in the city’s EJ communities.

Q: Is this model based on any existing successful precedents?

James Geppner, Senior Project Manager, NYSERDA: This concept is comprised of several components (bulk procurement, a state revolving fund, an aggregator, etc.) and each have strong precedents. As one example, state revolving funds are widely used across the country to provide low-cost capital for water infrastructure. In New York State, the Environmental Facilities Corporation operates a state revolving fund that has deployed billions of dollars since its establishment to fund water infrastructure projects that otherwise may be difficult to finance.

Q: Isn’t this just C-PACE with more guardrails?

Susan Leeds, Energy Finance Consultant, Garrison Associates: C-PACE financing is also repaid with a property tax assessment — but that’s where the similarity ends.

C-PACE is a loan to a building owner from a private, for-profit lender; whereas this model is a public/private partnership that provides access to public capital. Importantly, this model provides centralized LL97 project installation services; C-PACE does not. When using C-PACE, buildings must procure all project components on their own and LL97 compliance is not assured (though C-PACE may help an owner comply). This model allows buildings to benefit from lower costs achieved through bulk procurement, standardization and by operating at scale. The model’s cost of funding would be lower than C-PACE because it is sourced through highly rated municipal bonds rather than reflecting a private lender’s cost of capital. Additionally, C-PACE lenders apply underwriting criteria to prospective borrowers, whereas under this model all covered buildings (with few exceptions) would be eligible to participate.