[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                      FINANCING CLIMATE SOLUTIONS 
                            AND JOB CREATION

=======================================================================

                                HEARING

                               BEFORE THE

                        SELECT COMMITTEE ON THE 
                             CLIMATE CRISIS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                              
                             JULY 29, 2021

                               __________

                            Serial No. 117-8
                            
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                            


                            www.govinfo.gov
   Printed for the use of the Select Committee on the Climate Crisis
   
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
45-587                     WASHINGTON : 2021                     
          
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                 SELECT COMMITTEE ON THE CLIMATE CRISIS
                    One Hundred Seventeenth Congress

                      KATHY CASTOR, Florida, Chair
SUZANNE BONAMICI, Oregon             GARRET GRAVES, Louisiana,
JULIA BROWNLEY, California             Ranking Member
JARED HUFFMAN, California            GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia         BUDDY CARTER, Georgia
MIKE LEVIN, California               CAROL MILLER, West Virginia
SEAN CASTEN, Illinois                KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado                 DAN CRENSHAW, Texas
VERONICA ESCOBAR, Texas              ANTHONY GONZALEZ, Ohio
                                 ------                                
                Ana Unruh Cohen, Majority Staff Director
                  Marty Hall, Minority Staff Director
                        climatecrisis.house.gov
                            
                            
                            C O N T E N T S

                              ----------                              

                   STATEMENTS OF MEMBERS OF CONGRESS

                                                                   Page
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, and Chair, Select Committee on the Climate Crisis:
    Opening Statement............................................     1
    Prepared Statement...........................................     3
Hon. Garret Graves, a Representative in Congress from the State 
  of Louisiana, and Ranking Member, Select Committee on the 
  Climate Crisis:
    Opening Statement............................................     3

                               WITNESSES

Duanne Andrade, Chief Financial and Strategic Officer, Solar and 
  Energy Loan Fund
    Oral Statement...............................................     6
    Prepared Statement...........................................     7
John Larsen, Director, Rhodium Group
    Oral Statement...............................................    14
    Prepared Statement...........................................    16
Rich Powell, Executive Director, ClearPath
    Oral Statement...............................................    18
    Prepared Statement...........................................    20
Zoe Lipman, Director, Manufacturing and Advanced Transportation, 
  BlueGreen Alliance
    Oral Statement...............................................    27
    Prepared Statement...........................................    29

                                APPENDIX

Questions for the Record from Hon. Kathy Castor to Duanne Andrade    55
Questions for the Record from Hon. Kathy Castor to John Larsen...    58
Questions for the Record from Hon. Kathy Castor to Zoe Lipman....    60

 
                      FINANCING CLIMATE SOLUTIONS.
                            AND JOB CREATION

                              ----------                              


                        THURSDAY, JULY 29, 2021

                     U.S. House of Representatives,
                    Select Committee on the Climate Crisis,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:03 a.m., via 
Zoom, Hon. Kathy Castor [chairwoman of the committee] 
presiding.
    Present: Representatives Castor, Bonamici, Brownley, Levin, 
Casten, Escobar, Graves, Palmer, Carter, Miller, Armstrong, 
Crenshaw, and Gonzalez.
    Ms. Castor. Well, the committee will come to order.
    Without objection, the chair is authorized to declare a 
recess of the committee at any time.
    As a reminder, members participating in this hearing 
remotely should be visible on camera throughout the hearing. As 
with in-person meetings, members are responsible for 
controlling their own microphone. Members can be muted by staff 
only to avoid inadvertent background noise.
    In addition, statements, documents, or motions must be 
submitted to the electronic repository at 
[email protected].
    Finally, members or witnesses experiencing technical 
problems should inform the committee staff immediately.
    Well, good morning, everyone. Thank you for joining this 
remote hearing. Today we will hear about financial incentives 
and investments to create jobs and accelerate deployment of 
clean energy and clean vehicles.
    I now recognize myself right now for 5 minutes.
    Well, thanks in large part to American research and 
innovation, we can now power our homes and cars and businesses 
in ways that pollute less and cost less. Solar and wind have 
become two of the cheapest sources of power in America, and 
energy efficiency saves families hundreds on their utility 
bills. It is now cheaper to drive an electric car than a gas-
powered one, thanks to lower maintenance costs and other 
savings over the lifetime of a vehicle. On Tuesday, I had a 
chance to check out Ford's new electric pickup truck, the F-150 
Lightning. I love the name, by the way. And it is an impressive 
vehicle. It was built by union workers right here in America. 
The modern wave of all sorts of clean technology will save 
Americans money, help create jobs as we make progress on 
solving the climate crisis.
    And that is good news because we know that we must act 
urgently to reduce carbon pollution. We are already facing the 
growing risks and costs of the climate crisis--we go through 
this every hearing--heatwaves, wildfires, extreme storms, sea-
level rise that threaten the lives and livelihoods of millions 
of our neighbors back home. So in this committee and in 
Congress we have heard from scientists that America needs to 
reach net-zero emissions as soon as possible and no later than 
2050, and we need to lead by example so that the rest of the 
world will join us in finding global climate solutions.
    And the key to a clean economy is clean electricity. The 
good news is that our nation's electricity sector has reduced 
carbon pollution in the last decade, but the reality is that we 
have to do more, and we have to do it quickly. Clean 
electricity helps unlock further pollution cuts in other 
sectors of the economy, including transportation, buildings, 
and industry. And in order to cut U.S. carbon pollution by more 
than half by 2030, as President Biden pledged to the world that 
we will do, we need to implement climate solutions in every 
sector.
    And that is why the Federal policies and investments that 
we are discussing today are so important. The Federal 
Government needs to help everyone, from homeowners to heads of 
companies. We have got to help everyone make the shift to clean 
technologies. We know that these clean technologies will 
improve the lives of our neighbors, leading to cleaner air, 
healthier communities, and a more sustainable economy.
    Our job is to help American families and businesses make 
that transition, especially as so many of them are still 
recovering from the economic impacts of the COVID pandemic. 
That is why Congress must support expanded access to 
technologies that are already available, making them more 
affordable, and building on the progress that we have already 
made. Because while we have helped bring down the costs of 
climate solutions, we still have a lot of work to do when it 
comes to deploying them at the scale the climate crisis 
requires.
    So that is what we are going to focus on today. We will 
discuss how we can use financial incentives and smart 
investments that can help families afford cleaner energy. We 
will talk about how we can accelerate the deployment of zero 
emission cars and trucks. And we will discuss how to create 
jobs in clean energy and electric vehicle manufacturing. These 
jobs come with high-road labor standards and family-sustaining 
wages. And as you will hear from one of our witnesses today, 
access to financing can be a critical barrier to upgrading 
homes for Americans. But cutting carbon pollution from houses 
and strengthening them to withstand the climate crisis hazards 
is necessary now. And we will hear about success in overcoming 
these barriers at the state level, and we will hear about the 
opportunities that a national initiative will provide to 
protect property, cut energy bills, and reduce pollution.
    When it comes to solving the climate crisis, we need to 
empower everyone to take concrete steps to make a difference 
and ensuring that clean energy solutions provide good 
opportunities and that they are within reach of all Americans. 
I know we can do this. So now let's make it happen.
    So with that, I will recognize our ranking member, Mr. 
Graves, for 5 minutes for an opening statement.
    [The statement of Ms. Castor follows:]

                Opening Statement of Chair Kathy Castor

      Hearing on ``Financing Climate Solutions and Job Creation''

                 Select Committee on the Climate Crisis

                             July 29, 2021

                        As prepared for delivery

    Thanks in large part to American research and innovation, we can 
now power our homes, cars, and businesses in ways that pollute less and 
cost less. Solar and wind have become two of the cheapest sources of 
power in America, and energy efficiency saves families hundreds on 
their utility bills. It's now cheaper to drive an electric car than a 
gas-powered one, thanks to lower maintenance costs and other savings 
over the lifetime of a vehicle. On Tuesday, I had a chance to check out 
Ford's new electric pick-up truck, the F-150 Lightning. It's 
impressive--and it was built by union workers right here in America. 
The modern wave of all sorts of clean technologies will save Americans 
money, and help create jobs as we make progress on solving the climate 
crisis.
    And that's good news--because we know we must act urgently to 
reduce carbon pollution. We're already facing the growing risks of the 
climate crisis: heatwaves, wildfires, extreme storms, and sea-level 
rise that threaten lives and livelihoods. In this committee and across 
Congress, we've heard from scientists that America needs to reach net 
zero emissions as soon as possible, and no later than 2050. And we need 
to lead by example, so the rest of the world will join us finding 
global solutions to global warming.
    The key to a clean economy is clean electricity. The good news is 
our nation's electricity sector has reduced carbon pollution in the 
last decade. But the reality is we need them to do more--and quickly. 
Clean electricity helps unlock further pollution cuts in other sectors 
of the economy, including transportation, buildings, and industry. In 
order to cut U.S. carbon pollution by more than half by 2030--as 
President Biden has pledged to the world--we need to implement climate 
solutions for every economic sector.
    And that's why the federal policies and investments that we're 
discussing today are so important. The federal government needs to help 
everyone--from homeowners to heads of companies--make the shift to 
clean technologies. We know clean technologies will better the lives of 
our neighbors--leading to cleaner air, healthier communities, and a 
more sustainable economy. Our job is to help American families and 
businesses make that transition, especially as many of them are still 
recovering from the economic impacts of the COVID pandemic. That's why 
Congress must support expanded access to the technologies that are 
already available, making them more affordable, and building on the 
progress we've already made. Because while we've helped bring down the 
costs of climate solutions, we still have a lot of work to do when it 
comes to deploying them at the scale the climate crisis requires.
    That's what today's hearing will focus on. We'll discuss how we can 
use financial incentives and smart investments that can help all 
families afford cleaner energy. We'll talk about how we can accelerate 
the deployment of zero-emission cars and trucks. And we'll discuss how 
to create jobs in clean energy and electric vehicle manufacturing--jobs 
with high-road labor standards and family-sustaining wages. As you will 
hear from one of our witnesses today, access to financing can be a 
critical barrier to upgrading homes for Americans. But cutting carbon 
pollution from houses and strengthening them to withstand climate 
crisis hazards is necessary now. We'll hear about success in overcoming 
these barriers at the state level. And we'll hear about the 
opportunities that a national program will provide to protect property, 
cut energy bills, and reduce pollution.
    When it comes to solving the climate crisis, we need to empower 
everyone to take concrete steps to make a difference, ensuring that 
clean energy solutions provide good opportunities, and that they are 
within reach of all Americans. I know we can do this. Now let's make it 
happen.

    Mr. Graves. Thank you, Madam Chair. And I want to thank the 
witnesses for being here today. I look forward to your 
testimony.
    And I really welcome this hearing this morning because we 
do need to look at where we are investing our precious taxpayer 
resources to get the best return on investment. We have got to 
make sure that we are incorporating more science into this 
discussion to ensure that the investments we are making are the 
most efficient at actually reducing emissions and plotting a 
course, not just to a clean energy future in the United States 
but one that will actually result in a clean energy future 
globally.
    I have heard many witnesses come before the committee and 
talk about how solar and wind are the most cheapest forms of 
electricity, the most inexpensive forms of electricity, yet for 
30 years we have been subsidizing those forms of electricity 
through the ITC and the PTC. If they are the most affordable, 
should we be diverting those resources to other types of 
incentives that will actually help to reduce global emissions? 
And I keep making reference to global because, as we all know, 
this is a global problem, and there is not anything that we can 
do exclusively in the United States that will help to turn the 
corner.
    The chair in her opening noted the challenges that we are 
experiencing in the United States. And let's be clear, there is 
no trajectory that we are on right now that will change or 
thwart that future unless there is a significant change in 
global emissions reductions.
    The Paris Accords that have been largely celebrated 
actually codify an increase in global emissions. If you look, 
for example, just at China, which now emits more than every 
developed country in the world combined, under the agreement, 
they get to increase their emissions another 50 percent between 
now and 2030. That is the wrong direction.
    And the reality is is that our investments, our financing, 
our tax incentives have to be deployed in a way that is 
strategic and recognizes not just the reality in the United 
States but the global reality because you will never have an 
uptake in more expensive energy solutions in developing 
countries. You are not going to have the ability to afford 
those types of energy solutions. You are not going to have the 
exportability of those energy solutions.
    We also have to recognize other facts, like the fact that 
global energy demand is projected to increase another 50 
percent between now and 2050, just over the next 29 years. 
Natural gas alone is projected to have a 40 percent increase in 
demand over that same time period. Where is that going to come 
from? Where are those energy sources going to come from? Are 
they going to be affordable and exportable to some of these 
third world countries? Who is going to provide that natural 
gas? Is it going to be the United States that currently has a 
40-plus percent lower emissions profile than Russian gas? And 
what role will technologies like carbon capture, storage, and 
utilization play, which in some cases, unfortunately, I have 
heard people demonize, but I think the reality is that we are 
going to see it probably play one of the most important roles 
in a clean energy future.
    And that is why I am encouraged that the Biden 
administration has embraced it. That is why I am encouraged 
that entities like The Nature Conservancy, National Wildlife 
Federation have endorsed.
    It is why I am encouraged that Senators Bennet, Duckworth, 
Tester, Whitehouse, Kaine, which are all Democrats, who are all 
Democrats, and Senator King, who is an Independent, released a 
statement saying we urge you to support programs that the 
Department of Energy develops that deploy carbon capture, 
utilization, and storage technologies in partnership with the 
private sector.
    Madam Chair, I think we have found ourselves in a scenario 
whereby we are often looking at solutions based on faith and 
emotion rather than science, economics, and facts. And I am 
concerned that we are going to try to squeeze that last drop of 
emissions out of certain sectors, whether it be transportation 
or energy, and the cost for that last ton is going to be so 
excessively expensive, and we are not going to be looking at 
how can we most affordably chart that clean energy future in a 
way that will truly receive uptake in the global community and 
turn the emissions trajectory we are on now in a different 
direction.
    So, again, I look forward to hearing from our witnesses 
today. I welcome this hearing and yield back.
    Ms. Castor. Okay. Now we are going to hear from our 
witnesses. They are all prominent leaders and researchers on 
financial policies that can help ensure that every American can 
access clean energy and drive clean vehicles.
    Duanne Andrade is the Chief Financial and Strategic Officer 
of the Solar and Energy Loan Fund in Florida. She leads 
development of innovative financing programs to help low- and 
moderate-income Floridians make their homes more sustainable 
through energy efficiency, renewable energy, and climate 
resilience. Ms. Andrade previously worked as a consultant for 
startups focused on environmental justice, sustainability, and 
clean energy finance models.
    John Larsen is a Director at Rhodium Group and leads the 
firm's U.S. power sector and energy systems research. He 
specializes in analysis of clean energy policy and market 
trends. Previously Mr. Larsen worked for the Department of 
Energy's Office of Energy Policy and Systems Analysis as an 
electric power Policy Advisor.
    Rich Powell is the Executive Director of ClearPath, an 
organization whose mission is to advance clean energy 
innovations. Mr. Powell served as a member of the 2019 Advisory 
Committee to the Export Import Bank of the United States, and 
he is also on the Atlantic Council's Global Energy Center's 
Advisory Group.
    And Zoe Lipman is the Director of Manufacturing and 
Advanced Transportation at the BlueGreen Alliance. She leads 
their policy and advocacy work on clean technology 
manufacturing and advanced vehicles and transportation. A 
former trade union official, she previously led the National 
Wildlife Federation's program on fuel economy and advanced and 
electric vehicles and headed the organization's Midwest climate 
policy program.
    Without objection, the witnesses' written statements will 
be made part of the record.
    And with that, Ms. Andrade, you are now recognized for 5 
minutes to summarize your testimony.
    Welcome.

         STATEMENTS OF DUANNE ANDRADE, CHIEF FINANCIAL 
         AND STRATEGIC OFFICER, SOLAR AND ENERGY LOAN 
FUND (SELF); JOHN LARSEN, DIRECTOR, RHODIUM GROUP; RICH POWELL, 
   EXECUTIVE DIRECTOR, CLEARPATH; AND ZOE LIPMAN, DIRECTOR, 
  MANUFACTURING & ADVANCED TRANSPORTATION, BLUEGREEN ALLIANCE 
                             (BGA)

                  STATEMENT OF DUANNE ANDRADE

    Ms. Andrade. Thank you very much.
    Good morning, Chair Castor, Ranking Member Graves, and 
members of the Select Committee. It is a great honor for me to 
be with you here today in this important hearing. My name is 
Duanne Andrade, and I am the Chief Financial and Strategic 
Officer for Florida's green bank, the Solar and Energy Loan 
Fund, known also as SELF.
    The Select Committee is already well informed on the 
science behind the climate crisis, so today I would like to 
focus on why we need to invest in clean energy and resilience, 
how SELF is doing this despite scarce resources, and what we 
need to do so we can scale and benefit communities in an 
equitable and sustainable way across America.
    SELF is a nonprofit Community Development Financial 
Institution known as the CDFI. We are also a founding member of 
the American Green Bank Consortium, we are based in Florida and 
have pilot programs in South Carolina, Alabama, and in a few 
weeks we are going to be opening up Georgia, next Tennessee, 
and Texas.
    Our mission is to provide access to affordable financing 
for sustainable property improvements, which means basically 
making unsecured loans for clean energy and climate resilient 
improvements to low- and moderate-income populations with low 
credit scores, basically high efficiency ACs, fortified roofs, 
impact windows and doors, solar, battery storage, and more.
    SELF has a 10-year track record serving LMI homeowners with 
unsecured loans based on ability to repay not credit scores. 
LMI populations have typically lower credit scores and are 
perceived as subprime, which connotes high risk in the 
traditional financing system. And it makes them less likely to 
access affordable financing and makes them vulnerable to 
predatory lenders.
    SELF has grown by 400 percent over the last 3 years and 
completed over 2,100 sustainable home improvements totaling 
over $19 million, and 73 percent of our loans have been to LMI 
homeowners with low credit scores mostly, and our average 
default rate is less than 2 percent. SELF's success bears 
testament to the demand for climate resiliency and proof of the 
creditworthiness of LMI households. LMI households make up 
about 40 percent of American households. They tend to live in 
older housing with outdated building standards which often lead 
to higher energy burdens and higher insurance rates, if they 
can afford that at all. Due to low credit scores, they also 
lack access to affordable capital to make energy efficiency and 
climate resiliency improvements that would reduce energy costs, 
climate risks, and also carbon emissions.
    According to a recent study, 32 million homes in America 
are at risk from hurricanes alone. This makes me think of our 
client, Alice, a 62-year old woman with a serious spinal 
disease who lives on fixed income. Her roof was caving in and 
she was about to lose her insurance right before hurricane 
season. Because of her medical bills, her credit was low and 
she had been denied access to fix her roof and retain 
insurance. She did not qualify for traditional financing.
    So one of our contractors referred her to us, and we were 
able to finance a new roof. She was able to secure insurance. 
She was able to secure the only and probably most valuable 
asset that she has, which is her home. Alice said, quote, 
``SELF helped me save my home,'' end quote.
    Another client, Joe, is a combat-wounded veteran who told 
SELF that his kids were suffering in the sweltering heat of 
Florida last summer when his AC went out. It seems like 
something so quotidian, so normal. However, it is life-
changing, and it has huge health impacts. He couldn't get a 
loan, not even from the VA. So a contractor referred him to us, 
and we were able to give him a small unsecured loan to get a 
new AC, providing quality of life and energy efficiency.
    SELF has over 700 approved contractors in our networks. We 
use our financing to create more business. They have told us 
that without SELF they would lose anywhere between 20 to 40 
percent of business due to clients lacking access to financing. 
One of our contractors, Sea Coast, has done more than a million 
dollars in projects.
    At SELF we get constant inquiries from other states, 
cities, and organizations asking us to bring our services to 
their communities. The demand is there. What we are missing is 
sufficient capital to meet all the demand. SELF and other green 
banks across the nation are innovative and specialize in 
bridging financing gaps. Collectively we have decades of 
experience underwriting energy savings, climate risk, and 
energy efficiency.
    Funding an independent nonprofit accelerator would have a 
large impact, much more than its initial capitalization from 
Congress, because green banks can leverage private capital up 
to eight times. For example, with $100 billion in the 
accelerator, we could generate $880 billion in total 
investments the first 5 years and create up to 5.5 million 
jobs. This is why we need Congress to fund an independent 
accelerator, to do just that, accelerate equitable investments 
to build more resilient communities while fostering sustainable 
jobs and transitioning to clean energy economy.
    Thank you very much.
    [The statement of Ms. Andrade follows:]

                      Testimony of Duanne Andrade

              CFO of the Florida Solar & Energy Loan Fund

        Before the House Select Committee on the Climate Crisis

        Hearing on Financing Climate Solutions and Job Creation

                             July 29, 2021

    Chair Castor, Ranking Member Graves, and Members of the Select 
Committee, it is a pleasure to be here with you today for this 
important hearing. My name is Duanne Andrade, and I am the Chief 
Financial and Strategic Officer of Florida's green bank, the Solar & 
Energy Loan Fund (SELF). I am here today as a witness to the benefits 
that can be achieved through the passage of House Bill H.R. 806, the 
Clean Energy & Sustainability Accelerator Act.
    I want to begin by thanking Chair Castor and the Select Committee 
on the Climate Crisis for bringing forth this discussion. This Select 
Committee is already well-informed on the science behind the climate 
crisis, so today I will focus on how we can tackle the issue and create 
green jobs with the power of low-cost, long term capital through a 
Clean Energy & Sustainability Accelerator.
    The Clean Energy & Sustainability Accelerator Act (Accelerator) is 
a bipartisan bill that would create an independent nonprofit 
Accelerator to function as a national green bank. The Accelerator bill 
is led by Michigan Representative Debbie Dingell, and is supported by a 
group of Members from both parties, including Representatives Don Young 
from Alaska and Brian Fitzpatrick from Pennsylvania. The Accelerator 
would invest in existing state and local green banks, fund the creation 
of green banks in states where they do not yet exist, and participate 
in project finance for large projects of national significance.
    A fully funded Accelerator would catalyze hundreds of billions of 
dollars in investments by leveraging public, private, and philanthropic 
sources to create sustainable jobs; resilient, efficient, and 
affordable low-emissions housing; and clean transportation. The 
Accelerator bill has passed the House three times now: twice last year 
in the Moving Forward Act and the Clean Energy Jobs and Innovation Act 
and again this year in the Invest in America Act. The Accelerator was 
also included in the recent Democratic Senate budget resolution 
framework.
    My organization, the Solar Energy and Loan Fund, and the 
constituents we serve, would directly benefit from creation of this 
Accelerator.
The Solar Energy and Loan Fund (SELF)
    SELF is a Treasury certified, non-profit Community Development 
Financial Institution (CDFI), and a founding member of the American 
Green Bank Consortium. SELF is based out of Fort Pierce, Florida, with 
additional Florida offices in St. Petersburg, Hillsborough County, and 
Orange County. Also, SELF is opening an office in Atlanta, Georgia, has 
pilot programs in South Carolina and Alabama, and is soon expanding 
into Texas and Tennessee. SELF has a ten-year track record serving low 
to moderate income (LMI) homeowners with small unsecured loans based on 
ability to repay rather than credit scores. To date, SELF has deployed 
nearly $19 million in over 2,100 unsecured loans to a majority LMI 
homeowners with low-credit scores, with a less than 2% default rate.
    SELF's mission is to rebuild and empower underserved communities by 
providing access to affordable and innovative financing for sustainable 
property improvements, with a primary focus on energy efficiency, 
renewable energy, and climate resilience in low-to-moderate income 
communities. SELF pursues its mission by making unsecured loans to 
finance these improvements. An unsecured loan means that the borrower 
does not face the threat of confiscation of their home or other assets 
if they fail to repay the loan.
    SELF underwrites these loans based on the customer's ability to 
repay, not their credit score. A typical loan size is approximately 
$10,000 with a 5- to 7-year term. The most common home improvement 
projects are high efficiency air conditioners, roofs, impact windows, 
hurricane shutters, and solar rooftop PV systems.
    SELF believes that our current lending system does not work well 
for those who need credit the most. LMI households account for 42% of 
all U.S. households. Working class Americans frequently have low wealth 
and low credit scores, which investors refer to as ``sub-prime'' to 
connote ``high risk''. The traditional financial system assesses risk 
by looking at credit scores, rather than the ability to repay. Credit 
scores and traditional underwriting methods frequently do not capture 
true creditworthiness of underbanked and LMI clients. Therefore, there 
are huge opportunities to serve these markets, delivering economic, 
social, and environmental benefits. The biggest barrier to serving 
these markets, however, is the lack of low-cost, flexible capital.
    This LMI population that SELF serves is referred to by United Way 
as ``ALICE'': Asset Limited, Income Constrained, Employed.\1\ ALICE 
Americans are not wealthy enough to access fair-priced capital, but not 
poor enough to benefit from most grant or subsidy programs. While they 
might hold a mortgage, pay their taxes, and always meet their bills on 
time, they cannot afford the upfront costs of residential energy 
efficiency and climate resilience retrofits, and their low credit 
scores prohibit them from borrowing at affordable rates.
---------------------------------------------------------------------------
    \1\ https://www.unitedforalice.org/
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    We are proud of the progress that we have made over the past 10 
years and especially our growth in recent years. However, the stark 
truth is that we are not doing enough. In our home state of Florida, 
there are 7.7 million households, of which 33% are ALICE.\2\ That means 
there are approximately 2.5 million households in Florida that live 
above the federal poverty line but cannot afford the investment to make 
their homes cheaper to run and safer from storms. All these homes could 
benefit from the flexible, low-cost capital that SELF provides.
---------------------------------------------------------------------------
    \2\ https://www.hfuw.org/wp-content/uploads/2020/05/
2020ALICEHightlightsReport_FL_FINAL-4.15.20.pdf
---------------------------------------------------------------------------
    The lack of access to affordable credit to build, improve, and 
protect assets exacerbates climate risks, leaving LMI communities more 
exposed than anyone else to climate events. This exposure creates a 
heavy ``climate burden''--meaning additional costs (insurance, energy, 
capital) and risks associated with climate events that threaten their 
only assets: their homes; their health; and their ability to be 
productive. Climate resilience upgrades include energy efficiency; 
insulation and weatherization; high-efficiency air conditioners and 
heaters; solar energy with battery storage; and fortified roofs, impact 
windows and hurricane shutters. These upgrades help residents save 
money to repay the investments, but even more importantly, they greatly 
improve quality of life, health, and safety when faced with climate or 
health threats as we experienced during the Covid-19 Pandemic.
    In 2020, amidst the Covid-19 pandemic, SELF's overall lending 
activity increased by 84% and surpassed $5 million annually for the 
first time. SELF has now grown by 400% over the last three years and 
financed over 2,000 sustainable home improvement projects totaling $19 
million in unsecured loans, with 74% of the lending activity in 
underserved markets.
Jobs
    From an economic stimulus perspective, SELF helps large and small, 
local, minority-owned contractors do work in underserved communities-
often their own-by offering a financing tool that will fit the needs of 
LMI homeowners. Developers benefit from access to SELF's low-cost 
Housing Impact funds that provide low-cost capital to complete capital 
stacks that incorporate ``green'' (climate resiliency, energy 
efficiency, and solar and battery storage) building standards to 
benefit low income rental tenants. This latter product is one that 
there is an increasing demand for.
    By financing improvements in communities with no affordable 
alternative, SELF opens up a new market for contractors who would 
otherwise be shut out of helping this portion of America. This 
translates to more business and more jobs. SELF's contractors have 
expressed that without SELF, they lose anywhere between 20 to 40 
percent of business due to lack of financing available for LMI clients. 
SELF has over 700 vetted and approved contractors in our network, and 
is always adding more as we find more capital to lend.
    When contractors sign up for SELF's network, they are able to do 
business in new markets without taking any financial risk, which allows 
them to expand their businesses to support new jobs. One of SELF's 
approved contractors, Westfall Roofing, said in a recent interview: 
``There's not a lot of options like SELF out there, I'll tell you that. 
There's a lot of financing companies in the home-improvement industry, 
but they all have pretty similar restrictions and guidelines where SELF 
is able to give options to homeowners when they're getting declined 
everywhere else.'' \3\
---------------------------------------------------------------------------
    \3\ https://www.theinvadingsea.com/2021/07/12/steve-sowders-the-
solar-and-energy-loan-fund-enables-low-income-property-owners-to-get-
loans-for-roofing-work/
---------------------------------------------------------------------------
    One local Ft. Pierce family-owned business, Sea Coast Air 
Conditioning, has done over $1 million in projects with SELF financing. 
He said: ``We did the math on it this morning,'' Zack Langel said. ``We 
have done a little over 200 systems through SELF (and) have never once 
had a problem.'' \4\
---------------------------------------------------------------------------
    \4\ https://
---------------------------------------------------------------------------
www.wptv.com/rebound/self-helps-struggling-homeowners-avoid-sweating-
over-ac-payments
    A female-owned minority contractor in Orange County, Florida, was 
thrilled when she found out about SELF. She said, ``(SELF) is a very 
ethical company. They explain everything very well to the homeowner. We 
were looking for a financing company that could help homeowners that 
are struggling.'' \5\
---------------------------------------------------------------------------
    \5\ https://www.youtube.com/watch?v=m07ghVYZdUs&t=165s
---------------------------------------------------------------------------
    SELF's contractors are eager to find more financing for projects 
that are awaiting capital, especially in disadvantaged communities. In 
Florida, contractors are keenly aware that thousands of LMI homeowners 
are losing insurance coverage due to outdated roofs, windows, and 
doors. Insurance companies are no longer willing to underwrite climate 
risks unless homes are upgraded. To address this issue, accessible, low 
cost, and flexible capital for climate resilience is needed, especially 
for disadvantaged communities so that LMI homeowners and small 
landlords of low-income housing are able to access insurance coverage 
and protect their assets.
The Case for the Accelerator
    As extreme temperatures become more common and severe weather 
events more frequent, homes use more energy and sustain more threats to 
their structural integrity. This year, hurricane seasons for Florida 
and the Southeastern United States began in May, a month earlier than 
usual. This week, we're seeing how a heat wave across Texas leads 
people to stay safe by cranking their inefficient AC units, straining 
the system so much that the state's grid manager has warned of 
potentially record-breaking electricity demand.\6\
---------------------------------------------------------------------------
    \6\ https://www.bloomberg.com/news/articles/2021-07-23/-dome-of-
doom-will-bake-texas-and-central-u-s-next-
week?fbclid=IwAR0Ds3qgscxSn96bg6Kmn41l__kcV5H0fdPsr9mYySVK-
LSPy8gH3gz8Igk
---------------------------------------------------------------------------
    In Florida, we're seeing how the home insurance markets will 
respond to worsening climate events. Just weeks before the 2021 
hurricane season began, property insurance companies used the excuse of 
insufficient storm resilience to justify dropping over 50,000 
Floridians from their homeowner policies.\7\ Close to a third of 
American families have zero or negative non-home wealth.\8\ This means 
that close to a third of America is at risk of losing their sole asset 
to climate change-related severe weather events. The loss of insurance 
protection placed over 50,000 Floridians at risk of losing the only 
asset they might pass on as generational wealth. With help from the 
Accelerator, SELF will provide the upfront capital for climate 
resilience improvements, so Americans in climate-vulnerable regions can 
live safely, maintain their insurance policies, and pass along the full 
wealth of their home to future generations.
---------------------------------------------------------------------------
    \7\ https://www.clickorlando.com/news/local/2021/05/24/property-
insurance-companies-drop-50000-florida-policy-holders-ahead-of-
hurricane-season/
    \8\ https://www.db.com/newsroom_news/Inequality_Jan2018.pdf
---------------------------------------------------------------------------
    How can LMI homeowners ensure their health and quality of life 
during these extreme weather events, while also reducing broader power 
outage risks? In the case of Texas, who will finance energy efficiency 
improvements that help make these homes less of a strain on the power 
grid and more affordable for the residents to operate on a regular 
basis? In Florida, who will finance wind-resistant roofs, impact 
windows, and doors so the average American homeowner can protect their 
homes and keep their insurance?
    Capital from an Accelerator would help SELF greatly expand existing 
LMI lending programs and would enable us to provide longer-term 
financing options (e.g., 10-20 years) to further advance the 
affordability of projects like rooftop solar PV plus battery storage. 
The longer-term loans would stretch out the repayment term and 
therefore lower monthly loan payments. Energy and insurance savings 
derived from these projects also help pay for the loans over time.
    SELF and other green banks across the nation specialize in filling 
financing gaps and have decades of experience underwriting energy 
savings, climate risk, and energy efficiency. Green banks are 
innovative and nimble and exist to find financing solutions to climate 
issues that have been left out of the traditional financing system. 
Green banks have successful track records, manage funds prudently with 
triple bottom line returns: financial, social and environmental.
    Funding for an independent Accelerator would have a much larger 
real-world impact than its initial capitalization from Congress because 
it would fund green banks that leverage private capital, recycle their 
own capital for repeat investment of the same dollars, and can borrow 
private capital. An Accelerator has a multiplier effect on total real-
world investment in sustainability and resilience. For example, with 
$100 billion of funding, the Accelerator would generate $880 billion of 
total investment and would create 5.5 million jobs in its first five 
years of operations. \9\ You can learn more about the impact of the 
Accelerator in the document referenced in the footnote \10\ below.
---------------------------------------------------------------------------
    \9\ https://coalitionforgreencapital.com/wp-content/uploads/
Accelerator-Impact-Vivid-Economics-11.22.20.pdf
    \10\ https://
---------------------------------------------------------------------------
docs.google.com/presentation/d/
1E8Cxgfm2dw1eigDkyQnnwzGwqG19xEIXTRBdZGUYmVA/edit#slide=id.
    SELF believes that capitalizing Green Banks will greatly help 
respond to these needs and that is why we need to have a federally 
funded Accelerator. In particular, I'd like to call your attention to a 
few of the key benefits of having the Accelerator funded as an 
independent nonprofit (as envisioned in Rep. Dingell's bill) which 
could not be achieved if the Accelerator is a federal government 
program:

      Speed: An independent nonprofit Accelerator would be able 
to move with alacrity, funding projects within weeks of establishment 
rather than a lengthy rulemaking process.
      Alignment: An independent nonprofit would allow for the 
measuring and direction necessary to achieve specific policy goals set 
forward in legislation, most notably ensuring that 40% of Accelerator 
investment is directed to disadvantaged communities.
      Impact: Only an independent nonprofit would be able to 
maximize the impact of public funding by leveraging its balance sheet 
to access additional private sector capital; an independent, nonprofit 
Accelerator could also recycle its capital as principal and interest 
from loans are repaid to the organization.
      Standardization: An independent nonprofit Accelerator 
would allow for standardization of critical metrics and lending 
documents, which would eventually allow for securitization of state and 
local green bank loans, providing further liquidity into clean energy 
financing markets.
      Savings: An independent nonprofit Accelerator would be 
able to reduce operating expenses by offering centralized services such 
as underwriting or marketing to state and local green banks like ours.
      Cost reduction: According to a recent study by the NRDC 
and the Medical Society Consortium on Climate and Health, the total 
economic cost of the health impact of climate change and continued and 
fossil fuel air pollution exceeds $820 billion each year in 
America.\11\
---------------------------------------------------------------------------
    \11\ https://morningconsult.com/opinions/before-another-deadly-
summer-congress-must-act-to-address-the-rising-costs-of-climate-change/

    There is enormous demand for the type of capital offered through 
the Accelerator. At SELF we get weekly inquiries from other states, 
cities and organizations asking us to take our services to their 
communities seeking to replicate our inclusive green financing model to 
help LMI homeowners. SELF is currently actively working with groups in 
South Carolina, North Carolina, Alabama, Georgia, Tennessee, Texas and 
Louisiana to try and take existing loan programs for LMI and create new 
customized loan programs to address specific locational needs.
    Funding from the Accelerator would enable SELF to make energy 
efficiency and clean energy upgrades that would help improve the lives 
of LMI households across the country. A report from the U.S. Department 
of Energy's National Renewable Energy Laboratory (NREL) states:

        ``Pairing solar photovoltaics with rooftops of low and 
        moderate-income housing represents an opportunity to help 
        modernize the U.S. electric grid and improve energy 
        affordability in low-income communities. Understanding the 
        potential size of the LMI market in detail offers new insights 
        and opportunities to serve these communities,'' Mooney said. 
        ``The potential electric bill savings from the adoption of 
        rooftop solar would have a greater material impact on low-
        income households compared to their high-income counterparts.'' 
        \12\
---------------------------------------------------------------------------
    \12\ NREL, ``Low- and Moderate-Income Residences Can Help Modernize 
the U.S. Electric Grid,'' April 25, 2018, see https://www.nrel.gov/
news/program/2018/lmi-residences-can-help-modernize-us-electric-
grid.html

    In conclusion, in order to fully realize the economic, resilience, 
and climate benefits that the services SELF and other state entities 
offer to people in need, the Accelerator will be crucial.
    Thank you for the opportunity to testify today before this 
committee, and I look forward to answering your questions and 
discussing this policy.

                                Appendix

Client Testimonials:
Marine Combat Engineer Joe Hill: High Efficiency Air Conditioner
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Pamela Turner: Roof Loan (Resilience)
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Pamela Turner is a U.S. veteran, single-mother of four small 
children, and cancer-survivor, who works three jobs to try and make 
ends meet! Unfortunately, a large portion of her roof collapsed and she 
did not have the savings to pay for a new roof or have the credit score 
needed to qualify for a traditional loan. Pamela and her family were 
forced to suffer the consequences and she resorted to using dozens of 
buckets throughout her two-bedroom home to collect water seeping 
through the roof. Her home was deteriorating rapidly before her eyes 
and it was now unsafe and unhealthy for her and her children. She had a 
``major problem'' on her hands and she said she ``felt defeated''. 
Pamela learned of SELF and applied for a loan based on ability to 
repay. She was approved for SELF's lowest interest rate (5%), which is 
available to veterans and women with poor credit. She now has a solid 
metal roof on her home, and her family is safer, the home is healthier, 
and her largest asset is now protected. Pamela also qualifies for home 
insurance again, with lower premiums, and she will rebuild her credit 
as she pays off the SELF roof loan.
Alice Munster Testimonial
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    A 62-year-old with a degenerative spinal disease, Munster said 
she's almost lost her house twice due to financial hardships. She's 
been living on a fixed-income for about the past nine years while her 
husband Michael works at a local grocery store.


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
 ``They don't treat you like you're asking for a handout. They (SELF) have helped save my home.''--Alice Munster
----------------------------------------------------------------------------------------------------------------


https://www.tcpalm.com/story/news/2021/03/11/fort-pierce-nonprofit-
helping-disabled-homeowners-veterans-communities-color/4594405001/

    Ms. Castor. Thank you very much.
    Next we will go to Mr. Larsen. You are now recognized for 5 
minutes. Welcome.

                    STATEMENT OF JOHN LARSEN

    Mr. Larsen. Thank you, Chair Castor. Thank you, Ranking 
Member Graves, and members of the committee for inviting me to 
speak today.
    My name is John Larsen. I am a Director at Rhodium Group, 
an independent research firm whose research informs 
decisionmakers in the public, private, and philanthropic 
sectors. I lead Rhodium Group's U.S. energy systems research 
where we focus on analyzing clean energy policies, emerging 
clean technologies, and market trends. I am also a Nonresident 
Senior Associate in the Energy Security and Climate Change 
Program at the Center for Strategic and International Studies.
    I appreciate the opportunity to speak with you today about 
how Congress can create financial incentives and investments to 
accelerate clean energy technologies and create good-paying 
jobs. To tackle the challenge of climate change, the U.S. needs 
to rapidly deploy clean energy technologies across the energy 
system and quickly cut carbon pollution.
    There are a variety of policies that can accelerate this 
transition. Recent Rhodium research shows that updating and 
enhancing clean energy tax credits have the potential to 
increase the average annual rate of wind and solar 
installations on the grid by more than double last year's 
record of 30 gigawatts.
    An enhanced clean energy tax credit framework can drive 
electric power CO2 emissions down as much as 73 
percent compared to 2005 levels and save or create up to 
600,000 jobs on an annual average basis. All of this can be 
done with little impact on national average electric bills 
while also cutting harmful SO2 and nox pollution in 
half from today's levels in just 5 years.
    While electric power CO2 emissions have dropped 
in the U.S. by 40 percent since 2005, our research shows that 
under current policy, including the current tax credit regime, 
this progress will stall out in the next few years. At best, 
the electric power sector maintains emissions in the range of 
46 to 50 percent below 2005 levels in 2030 without new Federal 
action.
    Modernizing clean energy tax credits a decade ahead can cut 
U.S. electric power CO2 emissions to 64 to 73 
percent below 2005 levels by 2031. This is up to eight times 
more emission reductions than simply extending the current 
clean energy tax credit framework.
    To achieve these outcomes, Rhodium Group identified five 
critical improvements to the current tax credit framework. They 
are as follows: Number one, first extend the investment tax 
credit, the ITC, and the production tax credit, the PTC, over a 
long term period, such as 10 years.
    Two, increase the value of the tax credits back to their 
initial levels, 30 percent of project costs for the ITC and $25 
a megawatt hour for the PTC. While these first two points are 
essential, alone they cut U.S. electric power emissions down to 
as low as 55 percent below 2005 levels in 2031. Adding more 
enhancements can amplify these productions.
    Number three, if you provide flexibility to allow 
developers of any clean generating technology to claim the ITC 
or PTC, whichever makes sense for them, that will also 
accelerate deployment of clean technologies.
    And, number four, providing a direct pay provision or 
refundability provision to prevent financing bottlenecks will 
be important to avoid constraining clean energy deployment.
    All four of these enhancements together can drive emissions 
down to as low as 61 percent below 2005 levels in 2031. But the 
U.S. can double these gains again by including a fifth 
enhancement, incentivizing existing clean energy resources to 
stay on the grid. Retaining economically distressed existing 
clean generation, such as nuclear plants, helps to make sure 
that all new clean energy additions to the U.S. grid, such as 
wind and solar, only displace uncontrolled fossil generation 
and accelerate progress towards meeting clean energy goals.
    These five enhancements combined can slash emissions and 
save or create hundreds of thousands of jobs. Even after 
accounting for declines in fossil fuel jobs, enhanced tax 
credits can create or retain up to 600,000 jobs on an annual 
average basis from 2022 through 2031. Clean energy tax credits 
have the potential to establish renewable energy. It's the 
largest energy sector employer in America over the next decade, 
surpassing the oil industry and the natural gas industry.
    Enhanced tax credits can also serve as a foundation to 
compliment other policy actions, such as a clean electric 
standard or pollution regulations. Congress can also tailor tax 
credits to help achieve other policy goals, such as supporting 
emerging clean technologies and directing investment toward 
disadvantaged communities.
    Rhodium Group recently published research that also 
explores how tax credits can accelerate clean energy deployment 
in the transportation sector and in the industrial sectors of 
the energy system.
    Thank you again for the opportunity to testify today. I 
look forward to your questions about our research and findings.
    [The statement of Mr. Larsen follows:]

                             July 29, 2021

                        Statement of John Larsen

                        Director, Rhodium Group

       Presented to: House Select Committee on the Climate Crisis

      Hearing on ``Financing Climate Solutions and Job Creation''

    Thank you Chair Castor, Ranking Member Graves, and members of the 
Committee for inviting me to speak today.
    My name is John Larsen, and I am a director at Rhodium Group, an 
independent research firm whose research informs decision-makers in the 
public, private, and philanthropic sectors. I lead Rhodium Group's U.S. 
energy systems research, where we focus on analyzing clean energy 
policies, emerging clean technologies, and market trends. I am also a 
non-resident senior associate in the energy security and climate change 
program at the Center for Strategic and International Studies.
    I appreciate the opportunity to speak with you today about how 
Congress can create financial incentives and investments to accelerate 
clean energy technologies and create good-paying jobs. To tackle the 
challenge of climate change, the U.S. needs to rapidly deploy clean 
energy technologies across the energy system and quickly cut carbon 
pollution. There are a variety of policies that can accelerate this 
transition. Recent Rhodium research shows that updating and enhancing 
clean energy tax credits have the potential to increase the average 
annual rate of wind and solar installations on the grid by more than 
double last year's record of 30 gigawatts. An enhanced clean energy tax 
credit framework can drive electric power CO2 emissions down 
as much as 73% compared to 2005 levels and save or create up to 600,000 
jobs on an annual average basis. All this can be done with little 
impact on national average electric bills while cutting harmful 
SO2 and NOX pollution in half from today's levels 
in just five years.
    While electric power CO2 emissions have dropped in the 
U.S. by 40% since 2005, our research shows that under current policy, 
including the current tax credit regime, this progress will stall out 
in the next few years. At best, the electric power sector maintains 
emissions in the range of 46%-50% below 2005 levels in 2030 without new 
federal action.\1\
---------------------------------------------------------------------------
    \1\ (Larsen, King, Kolus, & Herndon, Pathways to Build Back Better: 
Investing in 100% Clean Electricity, 2021)
---------------------------------------------------------------------------
    Modernizing clean energy tax credits for the decade ahead can cut 
U.S. electric power sector CO2 emissions to 64-73% below 
2005 levels in 2031.\2\ This is up to eight times more emission 
reductions than simply extending the current clean energy tax credit 
framework. To achieve these outcomes, Rhodium Group identified five 
critical improvements to the current tax credit framework. They are:
---------------------------------------------------------------------------
    \2\ (Larsen, King, Kolus, Dasari, & Herndon, Pathways to Build Back 
Better: Maximizing Clean Energy Tax Credits, 2021)

      One, extend the investment tax credit (ITC) and 
production tax credit (PTC) over a long-term period, such as ten years.
      Two, increase the value of tax credits back to their 
initial levels of 30% of project costs for the ITC and $25/megawatt 
hour for the PTC.

    While these first two points are essential, alone, they cut U.S. 
electric power emissions down to as low as 55% below 2005 levels in 
2031. Adding more enhancements can amplify these reductions.

      Three, provide flexibility to allow developers of any 
clean generating technology to claim the ITC or PTC, whichever makes 
the most sense in each situation.
      Four, provide a direct pay or refundability provision to 
prevent financing bottlenecks that could constrain clean energy 
deployment.

    All four of these enhancements together can drive emissions down to 
as low as 61% below 2005 levels in 2031.

      The U.S. can double these gains by including a fifth 
enhancement: incentivizing existing clean energy resources to stay on 
the grid. Retaining economically distressed existing clean generators 
such as nuclear plants helps to make sure that all new clean energy 
additions to the U.S. grid only displace uncontrolled fossil 
generation, accelerating progress towards clean energy goals.

    These five enhancements combined can slash emissions and save or 
create hundreds of thousands of jobs. Even after accounting for 
declines in fossil fuel jobs, enhanced tax credits can create or retain 
up to 600,000 jobs on an annual average basis from 2022 through 2031. 
Clean energy tax credits have the potential to establish renewable 
energy as the largest energy sector employer in America over the next 
decade, surpassing oil and natural gas.\3\ Enhanced tax credits can 
also serve as a foundation to complement other policy actions such as a 
clean electricity standard and pollution regulations. Congress can also 
tailor tax credits to help achieve other policy goals, such as 
supporting emerging clean technologies and directing investment toward 
disadvantaged communities.
---------------------------------------------------------------------------
    \3\ (Larsen, Mohan, & Houser, Pathways to Build Back Better: Jobs 
from Investing in Clean Electricity, 2021)
---------------------------------------------------------------------------
    Rhodium Group recently published research that explores how tax 
credits can accelerate clean energy deployment in the transportation 
\4\ and industrial \5\ sectors of the energy system as well. Thank you 
again for the opportunity to testify today. I look forward to your 
questions about our research and findings.
---------------------------------------------------------------------------
    \4\ (Larsen, King, Kolus, & Wimberger, Pathways to Build Back 
Better: Investing in Transportation Decarbonization, 2021)
    \5\ (Larsen, King, Hiltbrand, & Herndon, Capturing the Moment: 
Carbon Capture in the American Jobs Plan, 2021)
---------------------------------------------------------------------------

                               References

    Larsen, J., King, B., Hiltbrand, G., & Herndon, W. (2021, April 
21). Capturing the Moment: Carbon Capture in the American Jobs Plan. 
Retrieved from Rhodium Group: https://rhg.com/research/carbon-capture-
american-jobs-plan/
    Larsen, J., King, B., Kolus, H., & Herndon, W. (2021, March 23). 
Pathways to Build Back Better: Investing in 100% Clean Electricity. 
Retrieved from Rhodium Group: https://rhg.com/research/build-back-
better-clean-electricity/
    Larsen, J., King, B., Kolus, H., & Wimberger, E. (2021, May 13). 
Pathways to Build Back Better: Investing in Transportation 
Decarbonization. Retrieved from Rhodium Group: https://rhg.com/
research/build-back-better-transportation/
    Larsen, J., King, B., Kolus, H., Dasari, N., & Herndon, W. (2021, 
July 8). Pathways to Build Back Better: Maximizing Clean Energy Tax 
Credits. Retrieved from Rhodium Group: https://rhg.com/research/build-
back-better-clean-energy-tax-credits/
    Larsen, J., Mohan, S., & Houser, T. (2021, April 20). Pathways to 
Build Back Better: Jobs from Investing in Clean Electricity. Retrieved 
from Rhodium Group: https://rhg.com/research/build-back-better-jobs-
electric-power/

    Ms. Castor. Thank you very much.
    Next up, Mr. Powell, you are recognized for 5 minutes. 
Welcome.

                    STATEMENT OF RICH POWELL

    Mr. Powell. Good morning, Chair Castor, Ranking Member 
Graves, and members of the Select Committee. My name is Rich 
Powell. I lead ClearPath.
    ClearPath advances polices that accelerate breakthrough 
innovations that reduce emissions in the energy and industrial 
sectors. An important note, we are supported by philanthropy, 
not industry.
    Climate change is real and industrial activity around the 
globe is the dominant contributor. I believe the challenge it 
poses to society merits significant action at every level of 
government and the private sector. Lawmakers and businesses 
across the country are prioritizing investments in climate 
solutions. Florida established a fund providing up to $100 
million annually for climate resiliency projects, and Louisiana 
has a $50 billion coastal master plan.
    Since 1980, the United States has spent $1.9 trillion in 
disaster recovery from 290 separate billion dollar events. If 
we don't better prepare, we will massively deepen deficit 
spending.
    As the committee looks at Federal incentives for clean 
energy, I will discuss five key points: First, a portfolio 
approach to clean energy innovation; second, the 45Q tax 
incentive for carbon capture; third, opportunities for 
enhancing 45Q; fourth, the new Energy Sector Innovation Credit; 
and, finally, building on the bipartisan clean energy 
innovation record.
    While the U.S. and a few others have reversed emissions 
trajectories, much of the rest of the world is growing their 
emissions as they grow their populations, industries, and 
quality of life. We need an American innovation-focused 
approach to solving the global climate challenge. There is no 
tax or domestic regulation that will magically halt emissions 
around the world. We must focus on strengthening the American 
economy, not ceding ground to Russia and China.
    Reducing American emissions is essential, and we have seen 
a significant decline already. But even if the U.S. somehow 
eliminated all of its carbon emissions tomorrow, just the 
growth in emissions from today through 2050 by developing Asian 
countries would exceed total U.S. emissions today.
    Why? Clean technology available today is simply not up to 
the task of global economy-wide decarbonization, which is why 
we need to focus on breakthroughs that offer both better 
performance and lower costs.
    If Congress leads with an innovation-focused agenda, we can 
guide basic and applied R&D for clean energy innovation through 
to commercialization. America will lead in creating jobs, 
reestablishing global leadership, and driving down global 
emissions.
    To do this, we will first need to drive down the cost of 
clean energy. Smart tax incentive policy has a proven record 
from natural gas to wind and solar. Carbon capture remains one 
of the most promising clean energy technologies. The 
Intergovernmental Panel on Climate Change and the International 
Energy Agency have stated that carbon capture and storage is 
essential to achieving net-zero emissions.
    The Federal carbon capture tax credit, affectionately known 
as 45Q, is viewed as the single most useful tool in spurring 
carbon capture project development. Most recently, a 2-year 
extension of 45Q was passed as part of the Energy Act of 2020.
    Recent modeling from the Rhodium Group, and I am delighted 
to be here with John today, determined a permanent extension 
generated gigatons of emissions reductions and new investments 
in both the power and industrial sectors. Their analysis found 
benefits up to 157,000 job years by 2035, 52 gigawatts of power 
sector carbon capture deployment by 2050, deployment on 
industrial facilities in more than 30 states, and 4 gigatons of 
emission reductions by 2050 across both power and industry.
    Expanding and extending 45Q is an idea that has been led on 
by Republicans, most notably in Leader McCarthy's energy 
innovation agenda launched this year, and is gaining bipartisan 
appeal due to the environmental benefits. Currently there are a 
variety of bipartisan proposals that could enable widespread 
deployment.
    A recent National Petroleum Council report highlighted the 
45Q extension and significant expansion, in line with Leader 
McCarthy's expanded bill of earlier this year, could 
incentivize an additional 350 to 400 million tons per year of 
carbon capture capacity, bringing the total U.S. capacity to 
500 million tons per year.
    One reason 45Q is so effective, it incentivizes emissions 
reductions in both the power sector and heavy industrial 
processes, like cement and chemicals manufacturing, and the 
transportation fuel sectors, unlike renewable energy tax 
credits for the power sector alone.
    Going beyond carbon capture, Ways and Means members just 
this Tuesday introduced the Energy Sector Innovation Credit, or 
ESIC, a bipartisan energy tax proposal to encourage innovation 
in the clean energy sector. A companion bill was also 
introduced in the Senate. ESIC creates incentives for 
breakthrough innovation, for power generation, and storage 
technologies, a game-changing market signal for private sector 
innovators. It also includes a clean hydrogen production 
credit. ESIC will help rapidly scale and diversify clean energy 
technologies through innovation to achieve long-term emissions 
targets, create jobs, and provide safe and reliable energy.
    For each breakthrough, the incentive automatically ramps 
down as technologies commercialize, not an arbitrary date like 
traditional energy credits. The credit could incentivize 
gigawatts of new clean generation, including for advanced 
nuclear, enhanced geothermal systems, offshore wind, long-
duration storage, and next generation solar.
    As you craft this agenda--and I cannot emphasize this 
enough--partisan climate policy is not sustainable. It results 
in short-term uncertainty and does not provide the market 
signals we need to move to a clean energy economy. We can start 
by building on recent bipartisan wins. If you pair bipartisan 
efforts like the Energy Act of 2020 with tax incentive policy 
like 45Q and ESIC, Congress will send an undeniable message 
that lawmakers are serious about leading on clean, reliable 
energy breakthroughs.
    Thank you for this opportunity. We applaud the Select 
Committee for taking on this important task.
    [The statement of Mr. Powell follows:]

                     Testimony of Richard J. Powell

                   Executive Director, ClearPath Inc.

           U.S. House Select Committee on the Climate Crisis

              Financing Climate Solutions and Job Creation

                        Thursday, July 29, 2021

    Good morning Chair Castor, Ranking Member Graves and Members of the 
Select Committee. My name is Rich Powell, and I am the Executive 
Director of ClearPath.
    ClearPath is a 501(c)(3) organization whose mission is to develop 
and advance policies that accelerate breakthrough innovations that 
reduce emissions in the energy and industrial sectors. We develop 
cutting-edge policy solutions on clean energy and industrial 
innovation, and we collaborate with public and private sector 
stakeholders on innovations in nuclear energy, carbon capture, 
hydropower, natural gas, geothermal, energy storage, and heavy industry 
to enable private-sector deployment of critical technologies. An 
important note: we are supported by philanthropy, not industry.
    Climate change is real and industrial activity around the globe is 
the dominant contributor to it. I believe the challenge it poses to 
society merits significant action at every level of government and the 
private sector.
    Lawmakers and businesses across the country are prioritizing 
investments in climate change mitigation and adaptation. Governor 
DeSantis of Florida, for example, has signed legislation requiring a 
master plan for the state to deal with sea level rise and flooding, and 
established a fund providing up to $100 million annually for climate 
resiliency projects.\1\ Meanwhile, Louisiana has a $50 billion coastal 
master plan for coastal restoration in part due to rising sea 
levels.\2\
---------------------------------------------------------------------------
    \1\ https://abcnews.go.com/Politics/wireStory/legislation-fight-
sea-level-rise-florida-governor-76954829
    \2\ https://coastal.la.gov/our-plan/
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    Since 1980, the United States has spent $1.9 trillion in Disaster 
Recovery from 290 ``billion-dollar events.'' \3\ From 2014 to 2018, the 
United States has seen an annual average of 13 billion-dollar 
disasters. If we don't better prepare--both with smarter investments in 
adaptation and by mitigating the underlying problem with global clean 
energy solutions--we will massively deepen deficit spending. Federal 
incentives for clean energy innovation have already, and should 
continue to, play a major role in that effort.
---------------------------------------------------------------------------
    \3\ https://www.ncdc.noaa.gov/billions/
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    As the Committee looks at the role federal incentives play in 
climate change solutions, I will discuss five key topics today:

      A portfolio approach to clean energy innovation. An 
innovation-first agenda is the best way to solve the global climate 
challenge by scaling up clean energy technology so the developing world 
chooses clean energy as an affordable option.
      The 45Q tax incentive for carbon capture. 45Q was 
expanded in 2018 through the FUTURE Act, and was extended recently as 
part of the bipartisan Energy Act of 2020. It will play a huge role in 
carbon emissions reductions in the U.S., private sector investment, job 
creation and deployment across the United States.
      Enhancing 45Q. Republican Leader Kevin McCarthy (R-CA) 
recently launched a clean energy innovation agenda, which among other 
climate solutions, included legislation to make the 45Q incentive 
permanent, increase the credit values, extend the payout term, and 
expand the credit to a larger pool of projects. The National Petroleum 
Council has found that a carbon capture incentive at roughly this level 
could deploy carbon capture technology at scale and incentivize an 
additional 350 to 400 million tonnes per year of capacity, bringing the 
total U.S. capacity to 500 million tonnes per year.\4\
---------------------------------------------------------------------------
    \4\ https://dualchallenge.npc.org/
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      The Energy Sector Innovation Credit (ESIC). Beyond carbon 
capture, conservatives in the House and Senate are leading with broader 
bipartisan efforts on clean energy incentives which would update the 
energy portion of the tax code by allowing cutting-edge technologies to 
gain commercial viability and upend the status quo without distorting 
the free market.
      Building on the strong bipartisan clean energy innovation 
record. The last several Congresses have enacted record investments and 
authorizations to spur on clean energy innovation.
An American Innovation-Focused Approach To Solving the Global Climate 
        Challenge
    While the U.S. and a few other leaders have reversed our emissions 
trajectories, much of the rest of the world is growing their emissions 
as they grow their populations, industries, and quality of life.
    The United States can truly lead on reducing global emissions. But, 
there is no tax or domestic regulation that will magically halt 
emissions around the world. We must focus on strengthening the American 
economy--not ceding ground to China or Russia.
    That's why it is important that U.S. energy policy synchronizes 
with the global nature of the climate challenge. Reducing American 
emissions is essential, and we have seen a significant decline already. 
Since U.S. emissions peaked in 2005, power sector emissions have fallen 
by roughly 40 percent as of 2020, largely due to the abundance of 
cleaner natural gas and resulting coal to gas power switching, as well 
as an increase in renewables. But, even if the U.S. somehow eliminated 
all of its carbon emissions tomorrow, just the growth in carbon 
emissions from today through 2050 by developing Asian countries (e.g., 
China, India, and other Eastern Asian nations) would exceed total U.S. 
emissions today. Going forward, we expect power sector emissions in the 
United States to flatline if natural gas prices remain low, and more 
action is required to ensure emissions continue to decrease here at 
home.
    However, clean technology available today is simply not up to the 
task of global economy-wide decarbonization. As the chart below 
indicates, the global supply of clean energy has remained stagnant 
since 2005. We need to focus on breakthrough technologies that offer 
both better performance and lower costs than the traditional emitting 
technologies in the market today--only then should we expect to truly 
change this trajectory.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    China's Belt and Road Initiative, their commitment to global 
infrastructure finance and development to tie together a huge swath of 
the developing world, is currently hugely outpacing all U.S. export 
credit and development finance activity. Among many other things, 
including clean energy technologies, China continues to finance new 
sub-critical coal plants--an outdated, extremely high emitting, but 
very cheap, coal technology--around the developing world.
    There is hope for the United States to truly change the trajectory 
of global emissions and remain an energy leader. If Congress leads with 
an innovation-focused agenda, we can guide basic and applied R&D for 
clean energy innovation through to commercialization. America will lead 
in creating jobs in new industries, reestablishing America's global 
energy technology leadership, and driving down global emissions by 
creating clean energy options that are affordable to rapidly growing 
nations. To do all of this, we will first need to drive down the cost 
of clean energy. Smart, targeted tax incentives policy has a proven 
record on early deployment of technologies, bringing them down the 
learning curve on cost and up the S curve of global adoption.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


A Carbon Capture Credit With Huge Returns
    Carbon capture remains one of the most promising clean energy 
technologies, gaining recognition for its potential to improve the 
environmental footprint of heavy industrial processes and eventually 
draw back down atmospheric CO2. The International Energy 
Agency has stated that carbon capture and storage is:

      Essential to achieving net-zero emissions as it tackles 
emissions from existing energy infrastructure,
      A solution for some of the most hard to decarbonize 
sectors, and
      An opportunity to directly remove carbon from the 
atmosphere.\5\
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    \5\ https://iea.blob.core.windows.net/assets/181b48b4-323f-454d-
96fb-
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0bb1889d96a9/CCUS_in_clean_energy_transitions.pdf

    The federal carbon capture tax credit (affectionately known as 
``45Q'') has such broad support in Congress as well as energy 
stakeholders because it brings robust energy security, skilled labor 
and environmental benefits. The 45Q tax credit is viewed as the single 
most useful tool in spurring the development of carbon capture, 
utilization, and storage projects. Most recently, a two-year extension 
of 45Q was passed as part of the Energy Act of 2020. Developers now 
have until the end of 2025 to commence construction on projects to be 
eligible for the credit.
    Carbon capture projects are often billion-dollar investments that 
require long-term certainty to pencil out and attract investment. 
Recent modeling from the Rhodium Group, a leading research firm, 
determined that this extension could enable an additional 53 to 113 
million tons of capture capacity that would not have happened if not 
for this legislation.\6\ That is a significant impact as the U.S. 
captures only 25 million tonnes per year currently.
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    \6\ https://rhg.com/research/climate-progress-in-the-year-end-
stimulus/

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    Expanding and extending the 45Q credit is an idea that has been led 
by Republicans, and is now gaining bipartisan appeal due to the 
potential benefits. While the existing 45Q credit is expected to have a 
significant impact at reducing emissions from certain industrial 
facilities, additional value is needed to motivate carbon capture at 
scale. Currently, there are a variety of proposals, many of them 
bipartisan, that have been introduced to do just that. These proposals 
address a number of issues, that if implemented, could enable 
widespread deployment of carbon capture:
---------------------------------------------------------------------------
    \7\ Ibid

      A higher credit level would help make carbon capture 
relevant to a wider portfolio of emissions sources, help cover costs 
associated with transportation and storage infrastructure, and 
incentivize carbon capture at scale. According to the National 
Petroleum Council's 2019 report entitled Meeting the Dual Challenge: A 
Roadmap to At-Scale Deployment of Carbon Capture, Use, and Storage, 
extending and expanding current policies to achieve a combined level of 
$90/tonne could incentivize an additional 75 to 85 million tonnes per 
year of capture capacity, bringing the total U.S. capacity to 150 
million tonnes per year. And to achieve carbon capture deployment at 
scale, policies that support financial incentives of $110/tonne are 
needed and could enable an additional 350 to 400 million tonnes per 
year of capacity, bringing the total U.S. capacity to 500 million 
tonnes per year.\8\
---------------------------------------------------------------------------
    \8\ https://dualchallenge.npc.org/

      Increasing the maximum credit payment period from 12 
years to 20 years would better align the incentive with the expected 
---------------------------------------------------------------------------
lifetime of facilities and improve certainty for project developers.

      Reducing or eliminating the minimum capture eligibility 
thresholds would remove the arbitrary requirements limiting the pool of 
potential capture sources and enable smaller capture technologies to 
claim the credit.

      Implementing a direct pay elective would enable the pool 
of investors to increase since the ability to claim the credit would 
not be restricted to those who have a tax liability.

      Extending the date for projects to begin construction 
would provide project developers much-needed security that projects can 
meet the deadline to claim the credit, as well as enable even more 
projects to be developed within this timeframe.

    A permanent extension (effectively a removal of the commence 
construction date, aligned with a bill introduced by Representatives 
Schweikert, Wenstrup, and Miller in April 2021 as part of Leader 
McCarthy's energy and climate package) generated gigatons of emissions 
reductions and new investments in both the power and industrial 
sectors.
    Here are five key points from their analysis:\9\
---------------------------------------------------------------------------
    \9\ https://rhg.com/research/opportunities-for-advancing-electric-
power-sector-carbon-capture/

      Up to 157,000 job-years by 2035. Deployment could 
encourage new construction and operations jobs at existing 
manufacturing facilities and new power plants.
      Up to 52 GW of power sector carbon capture deployment by 
2050. The 45Q credit could incentivize the build out of ultra-efficient 
fossil power plants with carbon capture, more than half the size of our 
current U.S. nuclear fleet. For a sense of scale, that'd be more than 
170 zero-emission NET Power Allam cycle natural gas plants.
      Deployment in 30+ states.\10\ The 45Q credit could 
facilitate new carbon capture projects in a host of new states. For 
reference, a plant that captures 0.1 million metric tons is a large 
facility by the Global CCS Institute's standards and is eligible for 
claiming the credit.
---------------------------------------------------------------------------
    \10\ https://rhg.com/research/industrial-carbon-capture/
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      Up to 4 gigatons of emission reductions by 2050 
collectively from the power and industrial sectors. That's equivalent 
to the emissions produced by 29 million cars for 30 years, or more than 
all the emissions produced from all U.S. coal and natural gas power 
plants produced over the last two years.
      $42 per MWh. Advanced carbon capture is cost-competitive 
with many other clean energy sources in the power sector. Unlike 
variable renewable energy sources, it also does not require additional 
batteries or other investments to provide around-the-clock electricity.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    One reason 45Q is so effective: it can incentivize emissions 
reductions in both the power sector and the industrial sector, such as 
heavy industrial processes like cement and chemicals manufacturing, and 
the transportation fuel sectors--unlike renewable energy tax credits.
    Expected deployment could catalyze emissions reductions totalling 
more than one-tenth of all U.S. industrial sector emissions.
    Support for carbon capture is diverse. Many states have recently 
implemented enabling carbon capture policies--from Wyoming to 
California. A recent National Petroleum Council carbon capture report--
led by companies like Shell, Valero, and Southern Company--highlighted 
the 45Q extension as one of its top policy recommendations.\11\
---------------------------------------------------------------------------
    \11\ https://dualchallenge.npc.org/
---------------------------------------------------------------------------
    Carbon capture technology is on the cusp of a step change. And as 
you can see from the Rhodium analyses--building on 45Q can help make 
that goal a reality.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


Energy Sector Innovation Credit (ESIC) Is a Game Changer
    This week, Members of the U.S. House Ways and Means Committee, 
including Reps. Tom Reed (R-NY), Jimmy Panetta (D-CA), David Schweikert 
(R-AZ), Josh Gottheimer (D-NY), Darin LaHood (R-IL), and Tom Suozzi (D-
NY) are expected to introduce the Energy Sector Innovation Credit 
(ESIC) Act, a bipartisan energy tax proposal to encourage innovation in 
the clean energy sector. A companion bill in the U.S. Senate is also 
expected to be introduced by Finance Committee Ranking Member Mike 
Crapo (R-ID) and Finance Committee member Sheldon Whitehouse (D-RI), 
among others.
---------------------------------------------------------------------------
    \12\ Rhodium Group modeling commissioned by ClearPath
    \13\ Ibid
---------------------------------------------------------------------------
    The bipartisan Energy Sector Innovation Credit creates incentives 
for breakthrough innovation for power generation and storage 
technologies across the clean energy spectrum--a game-changing market 
signal for private sector innovators.
    ESIC is motivated by the need to rapidly scale and diversify 
American clean energy technologies through innovation as a means to 
achieve long-term emissions targets, create jobs, and provide safe and 
reliable energy. The credit is designed to help nascent technologies 
overcome the incumbency advantages of established technologies, 
including suboptimal resource location relative to existing grid 
infrastructure, lack of economies of scale, and the absence of existing 
constituencies.
    The bill would establish a production incentive system for 
promising new power sector clean energy technologies needed to tackle 
climate change. For each breakthrough technology, the incentive 
automatically ramps down as individual technologies scale up in the 
commercial marketplace, not an arbitrary date like traditional energy 
credits. This credit could incentivize gigawatts of new clean energy 
generation needed to accelerate the U.S. power grid towards deep 
emissions reductions, including advanced nuclear, carbon capture, 
enhanced geothermal systems, offshore wind, long-duration storage and 
next-generation solar energy.
    By making the credit proportional to how much a project earns from 
market sales, the credit eliminates the unintended `negative pricing' 
distortions other credits have had on power markets.
    The policy also would bolster the initial deployment of industrial 
carbon capture and direct air capture technologies, identified as an 
essential piece of the net-zero strategy of multiple U.S. utilities and 
corporate entities like Xcel Energy, U.S. Steel and Microsoft.
Strong Bipartisan Clean Energy Record
    Finally, I cannot underscore this enough, partisan only climate 
policy is not sustainable. It results in short-term uncertainty and 
does not provide the market signals we need to move to a clean energy 
economy. We must work to have sustainable climate policy that includes 
the buy-in from both political parties in Congress.
    In addition to the bipartisan authorizations in the Energy Act of 
2020, the most recent FY20 & 21 appropriations bills are great 
successes to build on. They included critical programmatic direction 
and eagle-eyed investments in enhanced geothermal, advanced nuclear, 
carbon capture, grid-scale storage and other clean energy technologies 
included.
    If you pair bipartisan efforts like the Energy Act of 2020 with 
incentive policy, like 45Q and ESIC, Congress will send an undeniable 
message that lawmakers are serious about keeping the U.S. in the top 
tier of countries pursuing clean and reliable energy breakthroughs.
    Again, we must think globally when approaching this challenge. 
Partisan regulations will not pass the political sustainability test 
needed for climate solutions. Likewise, halting pipelines or placing 
moratoriums on oil and gas drilling on federal lands also has little to 
no impact on actual carbon dioxide emissions reductions in the U.S., 
let alone the rest of the world--particularly if we are simultaneously 
pushing OPEC+ for expanded oil and gas production globally. And none of 
that will make us more competitive with China. We agree, the cost of 
inaction on climate is high, and finding bipartisan common ground on 
clean energy innovation policy is priceless.
    Thank you again for the opportunity to provide remarks. ClearPath 
is eager to assist the Select Committee in developing policies that 
help innovation reach the market place in the service of a stable 
global climate.

    Ms. Castor. Terrific. Thanks so much.
    Next up, Ms. Lipman, you are recognized for 5 minutes.
    Welcome.

                    STATEMENT OF ZOE LIPMAN

    Ms. Lipman. Thank you, Chair Castor, Ranking Member Graves, 
and members of the committee. I am Zoe Lipman, Director of 
Manufacturing and Advanced Transportation at the BlueGreen 
Alliance, which brings together labor unions and environmental 
organizations to build a clean, thriving, and equitable 
economy.
    America is a good investment. Working people across the 
country are counting on Congress to see that. Investments to 
rebuild and retool American manufacturing, modernize our 
infrastructure systems, invest in our care economy, and create 
high-quality clean energy jobs are needed now and are needed at 
scale. They will be essential to addressing the climate crisis 
and to ensuring a real and equitable recovery.
    We cannot build back better if we fall behind the rest of 
the world in manufacturing the technology of the future here in 
the United States or if the workers and communities that need 
it most fail to see the benefits of innovation or a clean air 
economy.
    That means investing not only in deploying climate 
solutions but making equally central investments in 
manufacturing, good jobs, and revitalizing communities.
    Nowhere is this more true than in the coming shift to 
electric vehicles. EVs are coming. The actions and investments 
the policymakers make now will determine whether the U.S. 
economy, workers, and communities see the gains from the 
transformation of the transportation sector.
    If done right, the shift to EVs will not only play a 
critical role in addressing climate change, but it can 
strengthen domestic manufacturing and supply chains, secure and 
grow good jobs, and help reverse decades' long declines in job 
quality and access to middle class careers for manufacturing 
workers and workers of color.
    However, if policymakers fail to act, we risk being left 
behind in the next generation of automotive manufacturing and 
ceding future industries to global competitors. So what does 
this mean for Congress? We need to invest now to make the U.S. 
a leading market for EVs and do so with conditions that support 
working people.
    In addition to globally competitive clean vehicle standards 
that give companies the certainty to invest here, we need 
deployment--we need incentives for deployment to ensure faster, 
broader, and fairer consumer and fleet adoption of domestically 
manufactured electric vehicles, from cars and trucks to school 
buses, and to expand EV charging infrastructure to all of those 
who will need it. And all of our public investments, regardless 
of how financed, must come with strong labor standards and 
incentivize domestic manufacturing throughout the supply chain.
    For example, it is vital to update the section 30D Plug-In 
Electric Drive Vehicle Credit, the consumer EV credit, or a 
similar rebate to require vehicles and key components to be 
built here in order to receive the incentive and to support the 
retention and growth of good-paying jobs. The updated bill 
should also--updated credit should also facilitate purchase of 
EVs by those who would not otherwise be able to.
    And it is absolutely critical that we invest to make the 
United States a leading manufacturer of EVs and the technology 
that goes into them. That means taking action to expand, 
retool, and convert U.S. automotive and component manufacturing 
through the Advanced Technology Vehicles Manufacturing Loan 
Program, manufacturing conversion grants, and the 48C 
Manufacturing Investment Tax Credit, which applies to a wide 
range of manufacturing clean energy technologies, as well as to 
the automotive sector.
    We need to onshore critical supply chains, such as 
batteries, cells, and the materials that go into them, 
including through a new manufacturing investment tax credit and 
production tax credit.
    We need to modernize and cut emissions from our energy-
intensive industrial base, as I have heard other speakers 
mention, and target investment to revitalize manufacturing 
communities and build new pathways into family-supporting 
careers.
    Auto and components manufacturing employs around a million 
workers directly and millions more indirectly, from mining and 
steelmaking, to engines and batteries, to final assembly, to 
auto dealerships, and a multitude of local jobs supported in 
manufacturing communities.
    We are already fighting against decades of shortsighted 
policy and investment decisions that have spurred offshoring 
and outsourcing, and cost manufacturing jobs. Those choices 
have driven down the living and working standards of 
manufacturing workers, often hitting Black workers first and 
hardest, and cost access to family-supporting careers in too 
many communities.
    At the same time, the United States is already lagging far 
behind our competitors in investments to capture EV 
manufacturing and jobs and to ensure that good advanced engine 
and transmission, powertrain jobs of today become the good EV 
propulsion jobs of tomorrow.
    But we can and must reverse these trends and take a better 
path. Whether or not working people across America see the 
gains from the coming clean economy depends on what Congress 
does now.
    Thanks so much.
    [The statement of Ms. Lipman follows:]

                        Testimony of Zoe Lipman

         Director of Advanced Manufacturing and Transportation

                           BlueGreen Alliance

                     U.S. House of Representatives

                 Select Committee on the Climate Crisis

              Financing Climate Solutions and Job Creation

                             July 29, 2021

    Thank you Chairwoman Castor, Ranking Member Graves, and members of 
the committee.
    I am Zoe Lipman, Director of Manufacturing and Advanced 
Transportation at the BlueGreen Alliance. The BlueGreen Alliance brings 
together labor unions and environmental organizations to solve today's 
environmental challenges in ways that create and maintain quality jobs 
and build a clean, thriving, and equitable economy.
    America is a good investment. Working people across the country are 
counting on Congress to see that. We need to rebuild and retool 
American manufacturing, repair and modernize our infrastructure 
systems, invest in our care economy, and create high-quality clean 
energy jobs. Making these investments at scale, and doing them right, 
will be essential to addressing the climate crisis, and ensuring a real 
and equitable recovery.
    But we cannot build back better if we fall behind the rest of the 
world in manufacturing the technology of the future here in the United 
States, or if the workers and communities that need it most fail to see 
the benefits from innovation or a cleaner economy. That means investing 
not only in deploying climate solutions, but in the equally central 
investments we need to ensure workers, working families, and 
communities see the benefit of this transition.
    Nowhere is this more true than in the global shift to electric 
vehicles (EVs).
    EVs are coming. The actions and investments made by policymakers 
now will determine whether the U.S. economy, workers, and communities 
see the gains from the transformation of the transportation sector.
    It is critical that we take action now to position the United 
States as a leading market for the most advanced vehicles, while at the 
same time making serious investments to strengthen advanced vehicle 
manufacturing, to bring electric vehicle technology and components 
manufacturing here and into today's factories and to build good jobs in 
industries that are clean and safe for workers and communities alike.
    If done right, the shift to EVs will not only play a critical role 
in addressing climate change, but it can strengthen domestic 
manufacturing and supply chains, secure and grow good jobs, and help 
reverse decades-long declines in jobs quality and access to middle-
class careers for manufacturing workers and workers of color.
    By contrast, however, if policymakers fail to act, the United 
States risks being left behind in the global shift to using and 
manufacturing the next generation of automotive technology, which will 
cost good manufacturing jobs in communities across the nation, cede 
future industries to our competitors, leave many rural and urban 
communities behind, and aggravate inequality.
    Auto and components manufacturing makes up the single largest 
sector of U.S. manufacturing, employing around 1 million workers 
directly, and millions more indirectly--from mining and steelmaking to 
engines and batteries to final assembly, to auto dealerships and the 
multitude of local jobs supported in manufacturing communities.
    Over the past decade, auto sector companies and workers have 
demonstrated that they can build good union jobs making advanced clean 
and efficient vehicle technology. But now, our global economic 
competitors, including in Europe and Asia, are rushing to capture the 
jobs and economic benefits from the global transition to electric 
vehicles. The United States is lagging far behind in investments to 
capture these gains, and to ensure that good advanced engine and 
transmission jobs--what we know as the ``powertrain''--jobs of today 
become the good EV propulsion jobs of tomorrow.
    At the same time, decades of shortsighted policy and investment 
decisions have spurred offshoring and outsourcing, cost manufacturing 
jobs, driven down the living and working standards of manufacturing 
workers, and cost access to family-supporting careers in too many 
communities.
    Now is the time to act to reverse these trends and eliminate these 
risks. Critical decisions and investments that will shape the industry, 
domestic jobs, and the impacts on climate and our economy for decades 
will be made over the next few years.
    An effective and equitable transition means we must lead in 
advanced clean vehicle deployment and manufacturing. This means 
sufficient investment in the cleanest and most advanced vehicle 
technology, and in ensuring we build the next generation of vehicle 
technology in America and build good jobs throughout the transportation 
supply chain.

    We need to invest to make the U.S. a leading market for EVs--and do 
so with conditions that support working people.

    In conjunction with globally competitive fuel economy and vehicle 
greenhouse gas (GHG) standards that give companies the certainty to 
invest and invest here, we need to adopt incentives to ensure faster, 
broader, and fairer consumer and fleet adoption of domestically 
manufactured electric vehicles--whether that's cars, trucks, buses, 
school buses or the U.S. Postal Service--and to extend EV charging 
infrastructure to all those who will need it.
    At the same time, all our public investments--through traditional 
or novel infrastructure finance or through the tax code--must come with 
strong labor standards and incentivize domestic manufacturing 
throughout the supply chain.
    For example, the Section 30D (now 36C) Plug-In Electric Drive 
Vehicle Credit for consumers or a similar rebate plays an important 
role in building a domestic EV market, and it is critical to update it 
to require that vehicles and key components to be built here to receive 
the incentive, to support the retention and growth of good paying U.S. 
manufacturing jobs, and to spur automakers to further invest in 
building their most advanced vehicles here. The updated bill should 
also facilitate purchase of EVs by those who would not otherwise be 
able to purchase an EV.

    We need to invest to make the United States a leading manufacturer 
of EVs and the technology that goes into them.

    Catching up in the deployment race alone does not guarantee that 
working people and communities see the gains from the shift to EVs. We 
also need to make a globally competitive manufacturing investment 
through a robust set of manufacturing tax credits, grants, and loans, 
to:

      Expand, retool and convert U.S. automotive and component 
manufacturing to build the technology of the future;
      Onshore critical supply chains, such as batteries, cells 
and the materials that go into them; and
      Rebuild manufacturing communities and jobs.

    Notably, this includes:

      Restoring, updating and expanding the scope--and 
increasing the loan authority--of the Advanced Technology Vehicles 
Manufacturing (ATVM) loan program;
      Robustly funding a domestic manufacturing conversion 
grant program to retool existing facilities--especially those at risk 
of closure--to build EV and related advanced technology;
      Creating new manufacturing investment and production tax 
credits specifically focused on filling critical gaps in the EV supply 
chain (as well as in other clean technologies such as solar and 
offshore wind) and bringing new production to scale (again in 
conjunction with related grants or loans);
      Funding the 48C Advanced Energy Manufacturing Tax Credit 
(including direct pay) and/or a complementary grant program to 
establish, expand or retool manufacturing to build a wide range of 
clean and efficient technology including for advanced and electric 
vehicles, and to focus that investment on targeted communities. This 
program should be expanded to fund investments to reduce emissions at 
industrial facilities as well; and
      Making manufacturing and community investments that work 
together to build a new generation of clean manufacturing, revitalize 
communities, and create good jobs.

    In addition, reaching beyond the automotive sector, though critical 
to it, we need to reinvest in our energy-intensive industrial base, to 
modernize and cut emissions from production of key materials such as 
steel and aluminum that are as critical to the future economy as they 
are to the economy today. We have the opportunity to make these 
facilities the cleanest and most competitive in the world, while 
safeguarding jobs and helping to cut emissions and drive up labor 
standards worldwide.

    Manufacturing as a whole matters, and reinvesting in manufacturing 
will be critical to meeting our climate, economic, and equity goals.

    As is vividly demonstrated in the transportation sector, investing 
in transforming manufacturing will play a fundamental role in ensuring 
we move quickly to produce and adopt the clean technologies of the 
future. The energy-intensive industrial sector also represents a major, 
and one of the fastest growing, sources of U.S. emissions, and 
investing to modernize and decarbonize this sector will be critical to 
meeting our climate goals while securing jobs and building momentum for 
ongoing sustainable economic change. In the United States, the 
manufacturing sector contributes $2 trillion a year to GDP, and with 
its purchases of goods and services, comprises approximately one-third 
of our total economic output, nearly two-thirds of private sector R&D, 
and one in 11 jobs.i Manufacturing has a proven ability to 
provide high-wage, high-skill jobs, and a reliable pathway into the 
middle class for millions of Americans. It has not always lived up to 
that promise, however, and these pathways are unavailable to too many 
workers today.
    As decades of damaging trade, tax, and labor policy have weakened 
U.S. manufacturing relative to our global competitors and hollowed out 
manufacturing communities, this critical pathway to the middle class 
has narrowed. For example: from 2000 to 2016, the U.S. lost over 5 
million manufacturing jobs (1.5 million in the Midwest alone), 
exacerbating inequality, as high-skill jobs--many of which do not 
require a college degree--dissolved in the midst of the financial 
crisis and only partially recovered in the aftermath.ii
    For communities of color--especially Black workers--the impact of 
poor policy has been even more grave. Ongoing declines in U.S. 
manufacturing--particularly in sectors such as auto manufacturing where 
Black workers are comparatively strongly represented--have hit Black 
workers first and hardest.
    Most recently, the COVID-19 pandemic demonstrated the power of 
advanced manufacturing to meet critical needs, including PPE and other 
medical equipment. But it also underscored dangerous gaps in critical 
supply chains, and the grave shortfalls in working conditions and 
safety for too many workers.
    But there is nothing inevitable about this outcome. Instead 
policymakers have a clear opportunity now to learn from the past and 
take a new approach to rebuilding a U.S. manufacturing sector that once 
again plays a defining role in a strong, equitable, and resilient 
economy.

    Finally, just as manufacturing as a whole matters, so too does a 
broader transportation agenda.

    Our urgent transportation needs include not only EV deployment and 
infrastructure commitments, but also major investments in transformed 
transportation systems, such as sorely-needed funding for public 
transit, support for clean, efficient, and equitable freight and 
commercial transportation, and much more.
    We are at a crossroads. The global economy is changing; and the 
climate, economic and justice challenges we face are urgent and 
intertwined. Now is the time to invest at the scale necessary to lead 
in the clean transportation and technology of the future, lift up 
workers and communities across the country, and restore U.S. 
manufacturing and good jobs in a more prosperous, equitable--and 
clean--economy.

                               References

    i. Economic Policy Institute, The Manufacturing Footprint and the 
Importance of U.S. Manufacturing Jobs, January 2015. Available online:
https://www.epi.org/publication/the-manufacturing-footprint-and-the-
importance-of-u-s-manufacturing-jobs/

    ii. Center for American Progress, The Midwestern Great Recession of 
2001 and the Destruction of Good Jobs, June 2017. Available online:
https://www.americanprogress.org/issues/economy/reports/2017/06/07/
429492/midwestern-great-recession-2001-destruction-good-jobs/

    Ms. Castor. Well, thank you all so much. All of your 
testimony was insightful and very constructive, and we 
appreciate it.
    So now we will move on to questions. I will recognize 
myself first for 5 minutes for questions.
    Ms. Andrade, thank you so much for all of your work in the 
State of Florida and the Southeast. It is great news that you 
are targeting expansion. There--I mean, neighbors back home 
they are hungry to lower their electric bills and to weatherize 
their homes, and it is a bear to try to find the capital, the 
little bit of a loan to help them get there, but we know it has 
such incredible benefits of lowering their costs and lowering 
pollution for everyone.
    So we are headed into a big bipartisan agreement here where 
we are going to be able to target a number of different 
initiatives to lower costs and ramp up renewables. You 
recommended to us kind of a green bank model that has worked 
well in other regions of the country.
    How can this--go through how an accelerator should be 
structured and how do we ensure that we are really getting help 
to folks who truly need it, working class communities, 
communities of color that have long carried a disproportionate 
burden of pollution and often have trouble getting those loan 
dollars?
    Ms. Andrade. Yes. Thank you very much, Representative 
Castor. That is a very good question, and I am happy to try and 
address it as best I can.
    Green banks, there are 23 green banks across the nation 
right now. They take different forms and shapes, depending on 
each state and the needs. One of the advantages of green banks 
is that they can adapt to the needs of each state and 
community. We are very flexible, nimble, and because typically 
they are independent nonprofits--we happen to be the only CDFI, 
but other structures are quasi state funded, they have a 
combination of capital, they really can address the specific 
issues in each state.
    So currently there are efforts across the nation to start 
up more new green banks because what green banks do is really 
facilitate and channel funding from the private, public, and 
philanthropic sector into communities for these different 
purposes, whether it is EVs, whether it is resilience and 
solar, or a combination of all of those.
    We are proposing, and what we find, is that there is a huge 
demand, of course, as we are all talking about here, but 
especially the low- and moderate-income communities with the 
working class Americans are being left behind and can't access 
the benefits of the clean energy economy. It has always been 
kind of the--you know, something that the wealthy can access. 
The tax credits are typically something that low-income 
communities can't access, even the solar tax credits.
    So we find that funding a clean energy accelerator would 
allow green banks across the nation to proliferate, to also 
capitalize our existing funds so that we can create more 
programs, and in that creation there is a provision to earmark 
40 percent of the funding for LMI communities to ensure 
equitable deployment of capital.
    And one of the last comments would be that importantly 
green banks, because they are independent and nonprofit, which 
is the way that we are recommending that the clean energy 
accelerator be structured, as an independent non-profit, that 
allows us to crowd in more capital, to leverage the balance 
sheet and not be tied to Federal funds that are not flexible.
    Green banks across the nation are leveraging these public 
funding 8 to 1. SELF started with a Department of Energy grant 
from the previous American Reinvestment and Recovery Act, and 
here we are 10 years later, and we have leveraged public 
private funding eight times, and we continue to expand.
    So that is our recommendation is invest in these green 
banks that can multiply the effects that capital and the job 
creation throughout.
    Ms. Castor. Thank you very much.
    And just back home in the Tampa Bay area, I keep meeting 
all of these new small business owners and startups that are 
getting into this business, and I know that, again, there is a 
hunger out there among neighbors across all communities to 
lower their electric bills, and I love the win-win-win 
proposition of it all.
    So, Ms. Lipman, I loved checking out the new Ford F-150 
Lightning the other day. It is--I know they have already over a 
hundred thousand on order, and these are good American-made 
vehicles. We have got to win the global competition. I have all 
the faith in the world in our auto workers and all along the 
supply chain, so we are working on the blend of tax credits.
    Highlight for us quickly again the priorities here to make 
sure that consumers can access these vehicles and we can build 
them ASAP.
    Ms. Lipman. Thanks very much for that question.
    I think we are really excited by products like you 
mentioned as well. It is exactly what we want to see the future 
look like in the automotive sector. And I think we are rightly 
recognizing that worldwide our competitors in Europe and Asia 
are rushing ahead to take advantage of this coming industry 
globally.
    And if we are going to ensure we capture this opportunity, 
we need both to spur--make U.S. a leading market and to spur 
deployment and to ensure that we do that in both the electric 
vehicle, you know, for cars, for trucks, and through fleets, as 
well as in charging and to ensure that for across those 
incentives we are supporting both high labor standards so we 
are ensuring--we are building as good or better jobs in the 
clean technologies of the future as we are in the jobs today 
and----
    Ms. Castor. Unfortunately, Zoe, Ms. Lipman, my time is 
short.
    Ms. Lipman. Oh, sorry.
    Ms. Castor. We have other members, and we are going to talk 
more and get----
    Ms. Lipman. Manufacturing incentives.
    Ms. Castor [continuing]. Other questions from members, so I 
am going to go now and recognize Mrs. Miller. You are 
recognized for 5 minutes. Thank you.
    Mrs. Miller. Thank you, Chair Castor and Ranking Member 
Graves, and thank you all for being here today.
    I do want to say that I strongly support 45Q and carbon 
capture and all of the progress we have made scientifically 
moving forward. If we on this committee are really serious 
about addressing climate change and ensuring that the Americans 
and the rest of us all around the globe can access affordable 
and reliable energy, we must embrace carbon capture.
    Some of my colleagues across the aisle need to broaden 
their view on how carbon capture can impact everybody around 
the world. Utilization of carbon capture will allow us to 
continue to use cheap baseload energy, which would also include 
coal. Specifically exporting this technology abroad will help 
the developing nations power up as they are behind us in so 
many ways, while we will also be reducing global emissions. It 
is a win-win situation.
    That is why keeping incentives in place to help fine-tune 
the technology is key. Making carbon capture accessible and 
affordable is really a critical first step.
    Mr. Powell, what steps are needed to make carbon capture 
available worldwide?
    Mr. Powell. Well, thank you so much, Congresswoman Miller, 
and thank you for your leadership on this very important issue.
    The recent legislation that you introduced as part of 
Leader McCarthy's energy innovation package I think is a 
terrific first step to make this more accessible. So amongst 
other things, just to summarize, your legislation effectively 
made the credit [inaudible] in the tax code. It effectively 
doubled the value of the credit from its current state up to 
something more--it is $85 a ton and then paying out for more 
years which would effectively double its value.
    And, very importantly, it radically increased the number of 
facilities, including even very small facilities, that would be 
able to take advantage of and capture that credit. So, 
collectively, that hugely expands the number of facilities that 
could take on something like this.
    What we have learned in the experience of both radically 
reducing the cost of natural gas-fired power, and in wind and 
solar, is that deployment is key to bring down costs. We learn 
by doing the more of these things we install. So if we can use 
a significantly enhanced credit like that to hugely increase 
the uptake of this across more and more facilities and start 
building out the infrastructure across the country that could 
move that captured CO2 either to permanent 
sequestration sites or to places where it can be utilized for 
other means as a commodity, that would be a terrific first 
step.
    And then we need to think about strengthening our export 
authorities in this space so that we can get that technology 
out to more of the rapidly developing world, and there are a 
number of things we can do there as well.
    Mrs. Miller. That is part of it because of the worldwide 
need. How would this utilization of technologies like the 
carbon capture reduce energy poverty?
    Mr. Powell. Absolutely. So across the world, there are 
enormous remaining fossil fuel assets. In many places they are 
an extremely affordable way to both generate electricity and to 
power heavy industry or to heat cities. If there is some way 
that we can continue using these resources in a low emissions 
future, that is a terrific tool to keep available for the 
rapidly developing world.
    If you look at countries like China and Indonesia, they are 
continuing to build coal-fired power plants and coal-fired 
power technology because they have tremendous coal reserves. 
Many other countries have tremendous gas reserves.
    Frankly, if we don't find some way to allow those countries 
to retrofit a lot of what they have built with carbon capture 
technology, I don't see any path to solving the global 
emissions challenge and actually reducing the risks of climate 
change.
    There is just so much steel in the ground now that is using 
these assets, literally a terawatt of coal in China, the size 
of the entire U.S. power grid alone, and still rapidly 
developing in a number of other countries.
    Mrs. Miller. Don't you think the utilization of this 
technology would also create jobs in the developing nations as 
well?
    Mr. Powell. Absolutely. I mean, if you look at China alone, 
there are--you know, for better or for worse, there are 10 
million people employed in the coal value chain in China alone 
and hundreds of thousands and millions in many other rapidly 
developing countries. And to preserve those jobs in many of 
those places or even to expand the jobs in this industry, but 
to do so in a more responsible way going forward to capture the 
emissions, that is a win-win for development and for global 
clean energy.
    Mrs. Miller. Because they are going to keep doing it.
    Thank you so much. I yield back my time.
    Ms. Castor. Okay. Next up, Rep. Bonamici, you are 
recognized for 5 minutes.
    Ms. Bonamici. Thank you so much, Chair Castor and Ranking 
Member Graves, and thank you to our witnesses.
    So this is a hearing about financing climate solutions and 
job creation, and I serve on the Education and Labor Committee, 
and I do a lot of work in the workforce area, so I am going to 
focus on the job creation part of this hearing.
    And to follow up on Representative Miller's questioning, my 
grandfather was a coal miner. I am the granddaughter of a coal 
miner, and I know that what is important to transition to a 
clean energy economy while making workers a priority. We have 
the opportunity to create millions of good-paying, high-quality 
union jobs as we make this transition. But it can't be a race 
to the bottom in terms of wages, and that is what I am 
concerned that there is this fear across the country that 
people won't get good jobs, they will get low-paying jobs, and 
that is a concern.
    We need to make worker protections and workforce 
development a priority, and our Climate Action Plan integrates 
Buy American requirements, Davis-Bacon prevailing wage 
requirements, and the use of Community Benefit Agreements and 
Project Labor Agreements into Federal clean energy and 
resilience investments, and that is important.
    Our transition to a clean energy economy also offers an 
opportunity to connect people who are unemployed or 
underemployed with the training they need to access those jobs. 
And earlier this year, I reintroduced my bipartisan, bicameral 
BUILDS Act, and that bill supports people who have historically 
faced barriers to employment, particularly women and people of 
color. It gives them access to register for apprenticeships and 
the support services they need to secure those good-paying, 
high-quality jobs in transportation, clean energy, 
construction, and infrastructure.
    So, Ms. Lipman, the BlueGreen Alliance's manufacturing 
agenda does highlight the importance of high-quality jobs with 
labor standards and creating pathways for more people to access 
those jobs. So how can tools like keeping the Benefit 
Agreements and investments, and registered apprenticeships help 
improve those economic opportunities particularly for frontline 
communities and increase access to good-paying manufacturing 
jobs?
    Ms. Lipman. Thanks so much.
    You have already laid out some of the key priorities here. 
We need to ensure, as I started to mention previously, that as 
we deploy, as we have incentives of any kind, public funding of 
any kind that deploys this technology, that it comes with high 
labor standards, with incentives to utilize the kinds of 
community benefit and Community Workforce Agreements that you 
mentioned, that we invest in sufficient scale to ensure that we 
can reach--can rebuild the manufacturing communities, both to 
the communities and the workers who need it most, and that we 
target this investment to a whole range of communities who have 
seen this investment.
    And where we can ensure that we are bringing back good-
paying industrial jobs to industrial communities that have lost 
them and energy communities that have lost them, as you 
mentioned, as well as to ensure that we are providing 
investment in communities that have historically been excluded 
from that investment and that, as someone else mentioned 
earlier, that the benefits from this clean energy transition 
reach every community, that we see EV charging in rural and 
low-income communities, not just where the market price is 
provided.
    Ms. Bonamici. Absolutely. And also, Ms. Lipman, what 
Federal investments would help scale up our nation's 
manufacturing supply chain to meet the current needs of 
transitioning to a clean energy economy?
    And how can Congress support efforts to retool existing 
factories or facilities or incentivize new businesses to 
manufacture EVs and clean energy technologies? What would we 
need to do?
    Ms. Lipman. Absolutely. We have a host of tools at our 
disposal that we have the opportunity to more robustly fund and 
use more aggressively. Those include the Advanced Technology 
Vehicles Manufacturing Loan Program that could be expanded and 
used more broadly.
    We need to fund a Manufacturing Conversion Grants Program 
that would help ensure that we retool facilities that may be at 
risk of closure to build the technology for the future, and we 
need to, in addition to, as we mentioned the domestic 
manufacturing conditions on the deployment incentives, look at 
a new manufacturing investment and production tax credits to 
fill the supply chain gaps that we have seen so vividly missing 
here and that are so important to bring battery and cell and 
other production here, not to mention things like 
semiconductors.
    Ms. Bonamici. Right.
    Ms. Lipman. So, for all of these things, it will be 
critical, not to mention targeting these investments.
    Ms. Bonamici. Tremendous amount of potential.
    Madam Chair, as I yield back, I just want to take a moment 
to thank Maxine Sugarman of my staff, who has been with me for 
6 years, and has staffed me on not only the Select Committee on 
Climate Crisis but also on many of the labor and education 
issues, and science committee issues. Maxine is heading off to 
law school soon, but I just want to thank her for her exemplary 
work over the years, particularly on this committee.
    Ms. Castor. Well, thank you, Rep. Bonamici. And Maxine has 
been a wonderful staff member part of the Climate Crisis family 
here, and she hasn't just helped you out, but she has helped 
out the entire committee.
    So good luck in law school, Maxine. I think you are just 
getting started out there in the world.
    Ms. Bonamici. Thank you, Madam Chair. I yield back.
    Ms. Castor. Thank you.
    Next we will go to Congressman Gonzalez. Good morning. You 
are recognized for 5 minutes.
    Mr. Gonzalez. Good morning, and thank you for holding this 
hearing.
    I have to start, unfortunately, I deeply respect the Chair 
and everybody on this committee and everyone across Congress. I 
have to respectfully disagree with the idea that we are having 
a remote hearing today. From what I can tell, there is no 
guidance whatsoever that suggests that we cannot meet in person 
safely. I think over 85 percent of Members are vaccinated. I 
don't know what percent of this committee. I have been 
vaccinated from day one. I urged all of my constituents to do 
it. I know there is still hesitancy out there.
    But there is nothing anywhere that suggests that we can't 
figure out a way to meet safely in person, and I think it is 
important that we show the country that we can go back to 
normal and stay normal and meet in person.
    Also, I think it is worth noting this is a global virus, 
much like climate change. This is a global virus, and there 
will be variants for the rest of our lives. There is 
effectively zero chance that we are going to eradicate COVID 
from Planet Earth, and if we run and hide every time there is a 
variant, we will never, ever get back to normal.
    I don't know, I am a parent of young kids. My wife and I, 
we are not wild about locking ourselves up for another year if 
that is the way that this is going to happen, and I know that 
my constituents feel the exact same way.
    Ms. Castor. Well, I want to thank you, Rep. Gonzalez, 
because I--this was my call, and I thought, well, since all of 
our witnesses were remote and it was a 9:00 a.m. early morning 
hearing that just for convenience sake, we would do it. If we 
were in the committee room, we would be masked, and this is a 
little more comfortable way to do it. But I prefer the in-
person hearings, and we will be doing those on a more regular 
basis.
    But, please, everybody, if you are not vaccinated, get 
vaccinated so that we can crush COVID.
    Mr. Gonzalez. Yes, ma'am.
    Ms. Castor. And I won't ding you on your time here. You 
will get some extra time. So please go ahead.
    Mr. Gonzalez. Well, yes, ma'am, and that is good to hear, 
so I appreciate that explanation.
    So, as I said, it is good to see everyone, and I thank the 
witnesses for joining us. As I have said, no doubt climate 
change is a challenge that warrants our attention, but like any 
issue, we do need a policy approach that is realistic and cost 
effective.
    It requires we balance a broad array of interests and 
commitments, such as energy security, economic growth, 
competitiveness with Russia and China, and human rights.
    The good news is there is quite a bit of common ground on 
these policies, particularly on innovation, a competitive 
advantage that the U.S. can tap that exists nowhere else in the 
world. In my view, policy proposals should be focused on 
stimulating an innovation ecosystem here in the U.S. that have 
the potential to drive real technological breakthroughs that 
are affordable and reduce our carbon footprint.
    To that end, I recently introduced the Steel Upgrading 
Partnerships and Emissions Reduction Act, which passed out of 
the Science Committee, or the SUPER Act, legislation that would 
establish a program at DOE to further the research, 
development, demonstration, and commercial application of 
breakthrough technologies for low-emissions steel 
manufacturing.
    By developing and commercializing these technologies, we 
can ensure U.S. industry remains competitive in global markets 
while reducing emissions in the steelmaking process, again 
balancing economic growth with emissions reduction.
    I have also introduced the Coordinated Action to Capture 
Harmful Emissions Act, a bill that would expand the values of 
45Q tax credit for carbon capture technology and eliminate the 
arbitrary thresholds on facilities that limit deployment.
    Mr. Powell, I appreciated your testimony because you are 
absolutely right that carbon capture has to be the central 
focus of our effort to decarbonize the power and industrial 
sectors. I don't know how we can do it without carbon capture. 
Innovation, public-private partnerships, and incentive-based 
actions have proven to work, and each of these bills relies on 
these proven abilities, and I encourage my colleagues to 
consider each bill as we debate policy solutions.
    So, Mr. Powell, I want to start my questions with you. And, 
first off, it is good to see you. Reasonable estimates of the 
Green New Deal suggest the electricity portion alone costs 
around $500 billion per year, or about $4,000 annually per 
American household. I want to highlight this because I, again, 
think it is important we recognize that massive reductions in 
greenhouse gas emissions do have a cost associated with them, 
and it is going to force us to deal with various trade-offs. 
There is a great deal of interest, investment, and talent going 
into various technologies, but which are you most excited 
about? And how can Congress accelerate their development?
    Mr. Powell. Well, first, again, thank you, Representative 
Gonzalez, for your terrific leadership on this. I think that 
between the terrifically named SUPER Act and CATCH Act, I think 
that starts to set up really a comprehensive regime to think 
about radically reducing the cost of steel and other 
commodities in the industrial sector.
    Just to reiterate, industrial emissions actually in the 
United States last year for the first time were about equal to 
power sector emissions, and most estimates have them going to 
being the predominant source of emissions for the United States 
by 2030. So finding ways through innovation and incentives to 
start bringing those down, alongside all the success we have 
had in power and increasingly in transportation I think is very 
important.
    Unfortunately, there is no silver bullet technology. We 
need a portfolio of approaches to do this. Carbon capture is 
extremely important, and for many parts of the industrial 
sector, that is the most available technology today, literally 
just kind of putting a cap on top of a facility and capturing 
those emissions. Over time we should also be looking, 
particularly in the industrial sector, at ways to do things 
differently within those facilities. A huge source of those 
emissions are heat in the industrial sector. Today, in many 
blast furnace steel plants, for example, a lot of that heat 
comes from either natural gas or coke and coal, part of the 
process.
    If we could find some alternative way to produce that heat 
in a fully clean way, either with clean hydrogen or high-
temperature nuclear reactors or heat-generating units with 
carbon capture on them themselves, that will be a huge step 
forward.
    And then, lastly, we can think about entirely new ways to 
run those processes. There are now electric chemical approaches 
well under development and heavily underfinanced in the venture 
capital sector, but entirely new ways to reduce the iron--or 
reducing the oxygen out of iron oxide, the first part of the 
steelmaking process. We should be deeply investing in basic and 
applied research and demonstrations of those advanced 
technologies as well.
    Mr. Gonzalez. Thank you.
    I see my time is almost up, but I think it is helpful to 
think about it that way is, you know, how far along on the R&D 
curve are we when it comes to decarbonizing the industrial 
sector. I think from an R&D standpoint, we have developed a lot 
of technologies in the power sector, we need to make them more 
efficient, bring the costs down, et cetera, but looking at the 
industrial sector, where are we and how can we make 
improvements going forward I think should be a central focus 
for this committee and much of Congress.
    With that, I yield back.
    Ms. Castor. Thank you.
    Next we will go to Congresswoman Brownley. You are 
recognized for 5 minutes.
    Ms. Brownley. Thank you, Madam Chair. Thank you for having 
this hearing.
    My first question is to Ms. Andrade. Hopefully I am 
pronouncing your name somewhat correctly. You know, today, we 
are talking a lot about green banks, which you did, and clean 
energy tax credits, and I just wanted to ask you if you could 
talk a little bit how these two things can really sort of 
compliment each other. And so if you could speak to that.
    Ms. Andrade. Thank you.
    Yes. So I think Mr. Powell said something that I just want 
to start with, which is there is no silver bullet to address 
these issues, and we have to work in multilayer and multilane 
programs to address these issues.
    Green banks can bring capital into communities to solve a 
series of issues, specifically to finance everything from R&D 
that has been talked about here to EV financing for low- and 
moderate-income or not. And the financing the green banks can 
deploy is flexible and can leverage additional capital.
    So, for example, one of the things that we have been 
hearing more and more is that developers that are building 
affordable housing don't really go that extra mile to build the 
climate resilient, maximum energy efficient and even solar or, 
you know, wind powered buildings because of the cost.
    So that is where tax credits come in, for example, where if 
there were tax credits that incentivize and motivated 
resilience investment, solar investment--there is a Federal tax 
credit for solar, but the capture of that tax credit remains at 
a very high level for the developers. It doesn't go down to the 
tenants, for example. Typically it is used to fill those 
capital stacks and to make the financing work.
    So what we are finding is that there is a need for more 
flexible, low-cost capital to complete these capital stacks so 
we can invest in better buildings that are resilient, that are 
efficient, that are not only affordable to get into and to rent 
or to own but actually to operate over time.
    So that is the gap that a combination of low-cost flexible 
capital deployed through green banks and a policy of tax 
credits that motivates energy efficiency and climate resilience 
can bring together, can really unleash and catalyze a whole new 
standard of building in a way that works for everybody. For 
developers that want to make profits, for people that live in 
those homes, and for communities that are trying to stabilize 
and revitalize.
    Ms. Brownley. Thank you very much.
    Mr. Larsen, I am working on a bill on sustainable aviation 
fuel and, you know, I think we are moving forward certainly 
with a production incentive tax. And my question is, you know, 
this is sort of a new emerging area. We haven't had a tax 
incentive federally for aviation in this particular area.
    So I am wondering, you know--I believe, and I want to just 
hear what your opinion is, is that to really get this industry 
going, we need both. We need both the investment and the 
Production Tax Credit. Can you give your opinion on that?
    Mr. Larsen. Yes. No, thank you for the question.
    I think the most important thing to keep in mind in policy 
design for all of this is something Rich Powell said, which is 
the way that we get all of these technologies to get down in 
cost is through deployment. Right? And so--and that goes for 
everything, from an electric vehicle, to the next generation of 
wind farms, to sustainable aviation fuel. And I think there is 
lots of different combinations of incentives and tax credits 
that can meet that general goal of accelerating deployment and 
getting costs down.
    I don't think any investor is going to go big on major 
production of clean fuels without knowing that there is going 
to be a market for it, and one way to do that is through a 
production incentive. At the same time, these are very large 
facilities that have a lot of capital involved, and so finding 
ways to get over that first hurdle of just building the 
facility is going to be important.
    I think a combination of PTC and ITC is one way to do that. 
I think, you know, it could also be through deployment grants 
out of DOE or something like that. Right? There is lots of 
different--back to the no silver bullet point. Right?
    But I would say, you know, thinking through how different 
levers can fit together here to make--get those new 
technologies to scale is going to be very important.
    Ms. Brownley. Thank you so much.
    And thank you, Madam Chair. I yield back.
    Ms. Castor. Great.
    Next was Mr. Armstrong. Is he there? If not, let's see, Mr. 
Crenshaw, are you ready?
    So next we will to--we will recognize Mr. Crenshaw for 5 
minutes.
    Mr. Crenshaw. All right. I can be ready. We will do this.
    And thank you all for being here. I appreciate it.
    I do have to start out with echoing some of my colleagues' 
statements. We should be in person. This hearing is about 
science. Our decisions here in the Capitol should be about 
science, and I could go into a long tirade about where the CDC 
got their guidance and where our own House doctor got their 
guidance. We have all been vaccinated. It is safe. We need to 
show some leadership.
    I would also say I don't know how we are supposed to keep 
engaging in bipartisanship when the majority is threatening the 
minority with fines and jail time for not wearing a mask. This 
has gone too far. It has gone way too far. You are demeaning 
us, making us walk through metal detectors to get onto the 
House floor, if that makes any security sense whatsoever. We 
have to stop this so that we can get to the real work, which is 
policy. Okay?
    So now I will transition to policy. And I want to start 
with asking a question. When we are talking about tax 
incentives and ways to decrease global emissions, that is a 
common goal. I can't emphasize that enough. But is it about 
reducing carbon emissions or is it about promoting wind and 
solar? And are wind and solar just getting preferential 
treatment? And they are, of course.
    You know, for instance, why is there a pushback on moving 
from a PTC and ITC to a tech neutral tax credit? That seems 
like a common sense thing to do. Because the reality is that 
solar and wind can't possibly power the economy. It is a total 
fallacy to believe that that can happen.
    But I can tell you just with a few statistics, it takes 3 
to 4 more times more land to power the same amount of energy 
for solar than it would for nuclear. Just, for instance, from a 
capacity standpoint, solar and wind operate at about 30 
percent. Nuclear, gas, coal operate above 90 percent. This 
matters. And you also can't change this fact. It is just a 
basic law of physics, and it matters quite a bit.
    We talk about environmental justice all the time but what 
about energy justice? What about the right of people to have 
power when they need it? So dedicating incentives and 
regulatory changes only towards solar and wind, I just--I am 
not sure it will be successful. I am not sure it makes any 
sense. And it certainly won't create jobs the way that many of 
my colleagues have proposed.
    So, you know, why are we against the carbon capture credit 
is what--you know, we say it is too harmful because, well, you 
are still pulling fossil fuels out of the ground. But, again, 
is the goal to reduce carbon emissions globally or is the goal 
just to push a very specific industry in the United States?
    And now the argument has been made that that industry 
creates jobs, like these tax incentives will create jobs, but 
here is the thing--and, by the way, the Washington Post had to 
fact-check John Kerry for making this claim, that solar and 
wind jobs were the fastest--some of the fastest growing in 
America. Well, by a percentage growth, yes, but by absolute 
value, almost no growth whatsoever. We would be losing hundreds 
of thousands of jobs. We lost 800,000 jobs in the past year in 
the oil and gas sector just because there was a dip in demand, 
and that is how sensitive this job market is.
    So, you know, it is also worth noting on average solar and 
wind jobs pay $20,000 less than an oil and gas job. So if you 
wanted to create a lot more jobs, and especially manufacturing 
jobs and good-paying ones, we would build more nuclear plants. 
We would build more nuclear plants, and we would build more 
carbon capture stations. We have private companies that are 
really willing to invest in that.
    I get briefs on it all the time, especially in the Houston 
area. You could have massive effects on carbon reduction with 
this. You can have massive effects on carbon reduction with 
exporting more of our natural gas because we burn it cleaner 
and we produce it cleaner than any other country in the world. 
But if we give that up and global demand for energy keeps going 
up, as it will, well, Saudi Arabia, Iran, and Russia will meet 
that demand, and they will do it with much dirtier energy.
    Let me see how much time I have left here. Very little.
    Okay. Mr. Powell, can I ask you a quick question? Depending 
on the other climate solutions proposed, could jobs gained 
through a tax incentive just be lost through additional 
regulatory actions?
    Mr. Powell. Well, first, thanks, Congressman Crenshaw, for 
your leadership across these issues, your support of the Energy 
Act last year, your leadership on carbon capture and geothermal 
and regulatory reform. I do think we should remember, to your 
point, that the incentives we put into the system are also 
dependent on having a permitting and regulatory system such 
that those incentives will actually allow us to build in a 
timely fashion all of the things that we want to build.
    And so it is very, very sensitive on the other end to 
having, for example, NEPA processes that actually allow timely 
environmental impact statements and yes-or-no answers to 
actually cite and permit things on an expeditious timeline. Or 
regulations to safely store and site carbon capture permits and 
facilities and pipelines.
    And so we can't leave out the really important process of 
reforming and streamlining our regulatory processes so that we 
are not kind of pushing on a string. Right? We are not putting 
more incentives in and spending more but actually not getting a 
lot of projects actually out of the back end as a result of 
those incentives.
    Mr. Crenshaw. Thank you. I am out of time. I yield back.
    Ms. Castor. Thank you.
    And, Mr. Crenshaw, I know you joined the committee this 
Congress. I recommend to you you go back and read the section 
of our Solving the Climate Crisis Action Plan where we have a 
significant section on carbon capture and storage with a lot of 
good recommendations that I think can provide some bipartisan 
ways forward.
    And we highlight the fact that, especially in the steel, 
cement, other industrial processes, we do not have the answers 
on how we are going to capture carbon and how we need to invest 
in R&D there, and I think that this could be an area of 
bipartisan agreement moving forward. So I recommend that to 
you.
    And next we will go to--before we go to Representative 
Casten, if you all haven't seen his rifs on the House floor on 
social media on Hot FERC Summer, I recommend those to you as 
well.
    So next, Rep. Casten, you are recognized for 5 minutes.
    Mr. Casten. Thank you, Madam Chair. I will not being 
rapping today, much to your displeasure I am sure. I really 
appreciate you all having this hearing.
    As you have heard me say many times before, getting to a 
clean energy economy is synonymous with getting to a cheap 
energy economy. And with the exception of carbon capture and 
storage, which is a total economic boondoggle, we are going to 
get to that. Every clean energy technology we have has a lower 
operating cost than the technology it displaces, and I wish 
that wasn't partisan.
    My goodness. I am getting exhausted hearing my friends 
across the aisle say that what we need to do is to subsidize 
energy sources that are slashing their prices and losing market 
share.
    I don't know what that is, but it isn't capitalism, so 
let's talk about markets. Let's talk about the challenges of 
deploying low-cost technologies, getting them through that 
valley of death, and we did that with Title XVII of the Loan 
Programs Office in the ARA and was actually hugely successful, 
deployed over $30 billion. You know, there is a lot of hype 
around some of their losses, but I think they have generated $3 
billion in interest revenue and only had a billion dollars in 
losses. We need to be expanding that program.
    In my prior life I actually participated in that program, 
and one of the challenges that we still never fixed is that 
when that program was set up, Congress in their wisdom, lack 
thereof, said that the credit subsidy would have to be paid 
essentially as an added fee so that what happened was that 
while we set this out to say let's provide lower cost 
guaranteed debt to help these companies come forward, what we 
effectively did was increase the equity participation in those 
programs.
    I wasn't sure who I was going to ask my next question to, 
but, Ms. Lipman, I see you nodding your head. And briefly, 
because I want to get to a couple of things, but would you 
confirm that that is a problem, or would you disagree because 
it looks like you have got some experience there as well?
    Ms. Lipman. Yes, I agree, and I think there is a huge 
opportunity to address that particular issue, but also to more 
broadly utilize the loan programs, the manufacturing loan 
programs, and the grant authority of DOE to get at exactly what 
many folks have been talking about here, moving these 
technologies through commercialization into full deployment and 
particularly in the industrial sector where we have a 
tremendous opportunity to reinvest and transform----
    Mr. Casten. Okay.
    Ms. Lipman [continuing]. As well as across clean energy and 
clean energy manufacturing.
    Mr. Casten. I am sorry.
    I totally agree, and I was pleased we actually voted on the 
floor last night, we had an amendment that myself and 
Representative McEachin put in to start the process of 
eliminating that credit subsidy so that we can actually use the 
program, as I think Congress intended, to provide a lower cost 
source of capital to these technologies.
    Ms. Andrade, one of the ideas that we have been kicking 
around is that the U.S. buys about $8 billion of appliances 
every month, and I think LMI communities are about half of that 
number. If we could fix the credit subsidy problem, is there 
any reason we couldn't use that program to essentially provide 
low-interest financing to help LMI communities accelerate their 
acquisition of energy-efficient appliances that are going to 
leave more money in their pocket every time their rent comes 
due because they don't have to pay for energy? Structurally can 
we do that?
    Ms. Andrade. Thank you, Representative.
    I think that you could definitely do that, and, again, it 
is one more layer that would benefit this transition to clean 
energy economy. We need all of the tools in the toolbox, and 
you are talking about appliances. One of the things that is 
interesting to note is that in LMI communities, a lot of times 
there is this, like, sharing of old appliances, where, you 
know, when an old appliance doesn't work well anymore, they 
pass it on to a neighbor, and this really creates tremendous 
inefficiencies, and it is a huge cost for community members, 
households, but also they are high carbon-emitting appliances.
    So, yes, we should work at this level where tax credits can 
incentivize the switch out of these old inefficient appliances 
with new technologies that are low carbon emitting and more 
efficient. So that is one layer, but that still doesn't solve 
the whole problem.
    Mr. Casten. I am sorry because we are tight on time, but I 
would love to do that, and I would love to work with this 
committee to do it because I think we need to expand the actual 
authority on the renewable and efficiency part of this 
ultimately do that, but I think that there is an opportunity.
    Just lastly, I want to close on CCS. Mr. Powell, should we 
be using the 45Q program to accelerate the release of carbon 
dioxide into the atmosphere?
    Mr. Powell. We should be--can you repeat the end of that 
question?
    Mr. Casten. Should we be using the 45Q program to 
accelerate the release of carbon dioxide into the atmosphere?
    Mr. Powell. No. And the 45Q credit obviously does the 
opposite.
    Mr. Casten. Then let's--for goodness sake, let's stop 
subsidizing enhanced oil recovery. Pumping low density gases 
underground to accelerate the release of high density sources 
of carbon does not release CO2 into the atmosphere. 
It is a boondoggle. We need to stop pretending that 45Q doesn't 
need massive restorations.
    I am out of time. Thank you. Yield back.
    Ms. Castor. All right. Next up, Ranking Member Graves. You 
are recognized for 5 minutes.
    Mr. Graves. All right. Thank you, Madam Chair.
    Madam Chair, I would like to start and yield 30 seconds to 
Mr. Crenshaw.
    Mr. Crenshaw. I thank the gentleman from Louisiana, and I 
thank the Chairwoman for expressing the bipartisanship that can 
exist on carbon capture and utilization; but I have to point 
out that all of the environmental justice literature is 
completely against carbon capture, and Representative Casten 
just spent his entire time calling it a boondoggle. Okay.
    So this is why I express that there is actually 
disagreement, and to the Chairwoman's point, I think there can 
be agreements, and I would like us to get there.
    I yield back.
    Mr. Graves. Thank you.
    Madam Chair, I wasn't planning on doing this, but I do 
think that Mr. Crenshaw's earlier line of comments are 
appropriate.
    We are talking about science, and we are being asked to 
follow the science. Yet as we are witnessing right now, we are 
being asked to wear masks again, but then the same leadership 
or the folks that built a plexiglass chamber on the House floor 
to actually allow for COVID positive people to come into the 
House chamber, and as we know, there is no pathway you can walk 
without walking through the Capitol and sharing your germs with 
everyone, and that was done solely for a political purpose of 
electing Pelosi Speaker. It is the same party that without any 
threat assessment, without any threat assessment at all, is 
diverting 12 or 15 officers, as long as we are in session, to 
the House floor whenever U.S. Capitol Police is actually 
understaffed, and the threat is truly on the outside.
    And so I think Mr. Crenshaw's line was exactly right, and 
that it is really hard in some cases to think that folks are 
operating in good faith and truly on science whenever they just 
use it when it is convenient.
    Now, I want to pivot back to the topic of this hearing.
    Mr. Larsen, I want to understand something. You responded 
to a question a minute ago where you said that the best way--
and I think you were referencing Mr. Powell's comments as well, 
the best way to bring down costs is through deployment. I said 
in my opening, we have had solar and wind for decades now. I 
have heard Mr. Casten and others talk about how it is the most 
affordable source of electricity. But then in your testimony 
you said we need to extend and expand the ITC and PTC.
    Can you help me understand that quickly, please?
    Mr. Larsen. I will be happy to, and it is a great question.
    Essentially, in the absence of any other deployment policy 
to decarbonize the electric power sector, tax credits can do a 
lot to meet that same goal. Right? So if you don't have either 
some sort of EPA regulations or clean electric standard or some 
other policy driving decarbonization, then tax credits are a 
tool----
    Mr. Graves. But why do you need them if it is already the 
most affordable? I mean, shouldn't the market drive you to that 
solution if it is the most affordable? What am I not 
understanding about?
    Mr. Larsen. I mean, one key nuance there is the most 
affordable new generation, there is a lot of existing natural 
gas with no carbon capture on it that is just as competitive as 
the new renewables, and it is already built and it can run. 
Right?
    Mr. Graves. So when you say or when folks say it is the 
least expensive, they are talking about just operating? They 
are not talking about the actual Capex and everything else that 
goes into it? Is that----
    Mr. Larsen. No. I think what they are saying is when you 
build something new, renewables are the cheapest option; but 
than doesn't mean when you are dispatching the grid, it is 
always the cheapest thing to go. In fact, there is 400 
gigawatts of gas combined cycle units that can run quite 
cheaply on very low variable [inaudible] fuel cost. Right?
    And so--and all of that emits. And so that is the other key 
challenge here that when it is----
    Mr. Graves. Thank you.
    Mr. Powell.
    Mr. Larsen. Yes.
    Mr. Graves. The United States being able to take advantage 
of clean energy technologies to utilize our resources is 
important. Can you talk about the global importance of 
development of technologies, including more important 
affordable technologies that allow the developing world to have 
reliable low emissions?
    Doesn't it make sense that we develop the technology in the 
United States and then export it to India and other developing 
nations?
    Mr. Powell. Absolutely, Congressman Graves. And, again, 
thank you for your leadership across these issues and 
particularly your focus on permitting reform to get clean 
energy built faster.
    I think this global picture has two fundamental pieces. 
One, very quickly in response to Congressman Casten's last 
point, we have to remember we are in a global market for 
commodities like oil. So if we use enhanced oil--
CO2-based advanced oil recovery here in the United 
States, that is offsetting another barrel of much dirtier oil 
produced somewhere else in the world, for example, in the 
Russian arctic.
    So we are actually lowering global carbon dioxide emissions 
even though we are using it to produce another barrel of oil 
here in the United States. Very, very important point, it is a 
little sophisticated point, about how global oil markets work, 
but a really important one to remember.
    Similarly, on the global technology market, we need to 
remember we are in a race with a number of other very 
aggressive countries globally to supply the rapidly developing 
world with the power plants and the industrial equipment that 
they are going to use to develop and modernize.
    A lot of the other players in that race, China in 
particular, talks a good game about climate change but doesn't 
necessarily prioritize selling clean energy technologies to 
those developing markets. In fact, through the Belt and Road 
Initiative, they have been very happy to heavily subsidize, 
finance, build, and supply even really inefficient subcritical 
coal technologies, things we wouldn't allow to be built in the 
United States today because they are so inefficient and so 
polluting on so many dimensions.
    So we have got to remember that we are up against really 
tough competitors globally. We need better solutions. We need 
cheaper, higher performing solutions, and we need packages of 
incentives like the support of the Export Import Bank or the 
Development Finance Corporation so we can actually go head to 
head with what China is offering to the developing world and 
change their emissions trajectory.
    Mr. Graves. Great. Thank you, Madam Chair. Thank you for 
allowing a little extra time there, and I do--I just want to 
say I think Mr. Crenshaw's comments about, look, the only way 
we are going to get anywhere is us working together, and I 
think that there is some--some, as you and I have discussed, 
plenty of areas where we do agree, and it is important for us 
to get back together to work together to achieve some of these 
mutual goals.
    Over. I yield back.
    Ms. Castor. Yes. I trust we are going to have those 
opportunities shortly if some bipartisan packages come over 
from the United States Senate soon.
    So next we will go to Congresswoman Escobar. Good morning. 
Welcome. You are recognized for 5 minutes.
    Ms. Escobar. Good morning, Madam Chair, and thank you so 
much for having this hearing for us and bringing us together 
this morning. And to our panelists, thank you so much for all 
that you have shared so far and for the work that you are 
doing. I am really grateful for it.
    I want to begin with a very general question, and then I 
want to dive into some specific questions as they relate to my 
community. But, Mr. Larsen, you began your comments kind of 
laying out, you know, very clearly some specific tasks that 
Congress could accomplish, and in that spirit of what you 
shared with us, what I would like to ask our other panelists is 
a couple of quick--what is some low-hanging fruit that you 
think Congress immediately can jump on to achieve some quick 
wins? Because my belief is that having some easy, quick wins on 
climate builds momentum, and with that momentum we are able to 
then begin to tackle some of the more difficult conversations, 
which you all have witnessed here during this hearing today.
    But if I can start with Ms. Lipman, low-hanging fruit, easy 
wins that you would tell us to get to work on immediately?
    Ms. Lipman. Manufacturing conversion grants. We have such 
an opportunity to invest in companies that want to move into 
clean technologies of all kinds and may be faced with changes 
in the market they can't respond to now and ways that save jobs 
and save good jobs, and it is a great opportunity to help folks 
move into these sectors and keep jobs here in the U.S.
    Ms. Escobar. Thank you.
    Ms. Andrade.
    Ms. Andrade. Thank you.
    Yes, some low-hanging fruits would be to increase funding 
for the existing weatherization insulation programs, so-called 
WAP, LIHEAP, but also just provide funding to green banks that 
are in existence so that they can capitalize and catalyze and 
leverage those funds so that instead of just having a certain 
amount in these programs, we actually have eight or ten times 
more.
    So that, coupled with--honestly, I think that we have to 
include a climate resiliency tax credit along with the solar 
tax credit or any other tax credit so that we motivate energy 
efficiency as a first step. That is the low-hanging fruit, 
energy efficiency and resilience, and then all the other 
technologies especially for LMI communities.
    Ms. Escobar. Thank you Ms. Andrade.
    Before I head to Mr. Powell for any low-hanging fruit 
suggestions he has, you essentially identified what I was going 
to be asking you about. I represent an economically 
disadvantaged community out in the middle of the Chihuahuan 
Desert where we suffer frequently from severe drought, and then 
we sometimes swing over to extreme flooding; but many of our 
families are unable to really protect themselves against the 
extreme heat because of lack of access to weatherization for 
their own homes. So I may get back to you if we have time on 
that issue in just a sec.
    Mr. Powell, low-hanging fruit, quick ideas?
    Mr. Powell. Pass the Energy Sector Innovation Credit. It is 
bipartisan. It is bicameral. It has support from leadership in 
both Senate Finance and House Ways and Means. It is poised for 
passage. It would put all advanced clean energy generating 
technologies on an equal footing with a leg up to get those 
into the market and deployed quickly and lower the cost so we 
would have a whole portfolio of things to use here in the 
United States and export to the developing world.
    Ms. Escobar. Thank you.
    And, Mr. Larsen, anything you want to add as a footnote in 
the great list that you gave us during your remarks?
    Mr. Larsen. I think I would just reiterate a couple of key 
components. One is allowing credit flexibility so, you know, a 
technology or a developer could choose either the ITC or the 
PTC is really important to actually broadening the scope of 
opportunities for investment across America and also can really 
hyper charge deployment by doing so. And I think just that 
tweak to the existing tax credit framework would be quite 
impactful.
    Ms. Escobar. Great. Thank you.
    And I have probably only 30 seconds. Ms. Lipman, I want to 
ask you a quick question. In my community, the El Paso Chamber 
of Commerce is working with our university and our electric 
utility on a model that ensures that vehicle batteries can plug 
into the grid and sell excess energy back to the grid. They 
estimate that it could mean an additional $500 income for 
consumers who own an electric vehicle.
    How can Congress support more of these kind of vehicle-to-
grid models?
    Ms. Lipman. Sure. And in 7 seconds I would say there are 
numerous tools. It is an exciting opportunity to both use our 
tax credits and grants, but also the public sector, the 
infrastructure funding that would allow both households and 
things like schools systems and municipal bus utilities to 
create both--bring in the electric vehicles, but also create 
this vehicle-to-grid or vehicle-to-building resilience assets 
that are there in times of a disaster, but also provide the 
return to the school system, to the community through the 
utility services.
    Ms. Escobar. Thank you.
    I am so sorry, Ms. Andrade, we can't finish our 
conversation. I am out of time.
    Madam Chair, I yield back.
    Ms. Castor. Thank you very much.
    Well, I am going to make sure you all get together after 
the hearing to make that connection.
    Next up, Rep. Levin. You are recognized for 5 minutes.
    Mr. Levin. Well, thank you, Chair Castor. I am grateful 
that we are holding this hearing on such an important topic.
    You know, since I came to Congress in 2019, I have been 
fighting for the passage of a comprehensive clean energy and 
clean transportation tax package that will put our country on a 
path to a sustainable future. That package would drastically 
reduce greenhouse gas emissions so we can address the climate 
crisis that study after study tells us that we face.
    In April of 2019, I co-lead a letter signed by more than 
100 of our House colleagues calling for the inclusion of these 
sorts of policy and the always just around the corner 
infrastructure package under the prior administration. And we 
saw and continue to see these clean energy tax policies as a 
way that our country can combat the climate crisis, grow our 
economy, and create good jobs all at the same time.
    Unfortunately, the infrastructure package often discussed 
under the previous administration seemed to be more about 
scoring political points and less about actually creating jobs 
for our constituents, so it never materialized. But this 
administration, President Biden has revitalized these 
infrastructure efforts with the American Jobs Plan where he 
calls for an expanded investment tax credit and production tax 
credit for clean energy generation and storage, along with 
significant incentives to facilitate electric vehicle adoption 
and charging infrastructure.
    I share his vision. Many of our colleagues do as well. And 
earlier this month, I was really pleased that 133 other members 
signed a letter of support calling for the climate provisions 
in the American Jobs Plan. We called for the adoption 
specifically of a robust 10-year clean energy and 
transportation tax title as outlined in the President's 
proposal.
    A key part of that, making sure that the clean energy tax 
credits were made eligible for direct pay, particularly 
important as we continue the economic recovery from the 
pandemic which has made it more challenging to finance clean 
energy projects. I introduced last Congress the bipartisan 
Solar Jobs Preservation Act with Representative Schweikert to 
temporarily create a direct pay option for solar projects that 
were able to break ground by the end of 2021. They extended the 
phase down of the tax credit scheduled by 1 year. And then this 
Congress Earl Blumenauer and I built on that by introducing the 
Renewable Energy Investment Act to allow either the PTC or ITC 
to be taken as a direct payment rather than a tax credit. I 
continue to believe these policies are critical to our effort 
to build more clean energy projects.
    Mr. Larsen, I will turn to you for a couple of questions. 
Your testimony recommends that Congress provide a direct pay or 
refundability policy to prevent financing bottlenecks that 
could constrain clean energy deployment. And I know that 
Rhodium has done a lot of good work in this space. Please say 
hi to my friend, Trevor Hauser, if you get a chance.
    Mr. Larsen. I will.
    Mr. Levin. Could you elaborate on the bottlenecks that 
clean energy development could face and how direct pay 
specifically could address them?
    Mr. Larsen. Yes, absolutely.
    So essentially, you know, as you know, you need some sort 
of tax appetite to monetize the current tax credits the way 
that the current framework is set up without direct pay. It 
turns out there is a finite pool of capital available to help 
finance projects that are eligible for these tax credits.
    In 2020, in the renewable energy sector, the U.S. had 
record deployment of wind and solar and also saw basically a 
tax equity market hit its functional limits. People--you know, 
we hear multiple reports of folks either not finding financing 
or were finding very expensive financing because of those 
constraints.
    We see just in renewables alone a doubling of that 
capacity, of those capacity additions, up to 60, 65 gigawatts a 
year if we are going to get to the clean energy goals we need 
to see, and there is just no reason to believe that tax equity 
is currently set up to meet that challenge, especially if you 
would then expand to carbon capture, to EV charging, to all the 
other technologies that are going to matter here. And so 
basically a direct pay removes that constraint. It broadens the 
available capital available to monetize these tax credits and 
really connects an array of investment across all of these 
sectors and all of these technologies.
    Mr. Levin. Could you expand on--I know we all have this 
goal, 500,000 EV chargers, and there has been proposals back 
and forth, most recently $7.5 billion in the bipartisan 
infrastructure deal as announced yesterday. But do you have any 
thoughts on how direct pay could help us achieve the goal of 
500,000 EV chargers?
    Mr. Larsen. Yes. I mean, in any kind of, like, 
infrastructure investment, like EV charging, there is a long-
term game being played. Right? You are building for the demand 
you anticipate down the road. What that means is that in the 
immediate term, there is less of a revenue opportunity and less 
tax equity and tax appetite for the developers. Right? Because 
they just don't have all of the revenue they need down the 
road, and direct pay allows those same investments to happen 
absent that profitability concern in the near term and really 
can allow folks to kind of remove some of the risk of investing 
in these technologies in the near term and really build things 
out.
    That is a key part, component of this.
    Mr. Levin. Thanks, Mr. Larsen.
    I am out of time, but I hope that everybody takes a look at 
direct pay. It is good bipartisan policy.
    And, Madam Chair, I yield back.
    Ms. Castor. Thanks, Rep. Levin.
    Next up, Rep. Carter, good to see you. Good morning. You 
are recognized for 5 minutes.
    Mr. Carter. Thank you, Madam Chair, and thank all of the 
witnesses for being here. This is certainly a much needed 
discussion.
    But I really want to thank Mr. Powell for being here and 
for your comments, Mr. Powell, on what I think is the heart of 
the issue with the Select Committee, and that is global 
emissions. And, you know, when we talk about that and reducing 
global emissions, particularly while we strengthen the U.S. 
economy and not allow China and Russia to dominate energy 
development around the world, and I think there is bipartisan 
agreement that we need to invest in the innovation of clean 
technologies; but I am convinced that we can do that and still 
grow our economy at the same time.
    However, there are some of those who differ in what kind of 
innovation is acceptable, and we need to concentrate on 
innovations in the U.S. interest and that maintains our energy 
security and brings down global emissions.
    The key is global emissions. We do not live in a vacuum 
here. It is not just the United States. It is the whole world 
that is contributing to this and even more so other countries 
than it is the United States of America.
    I want to talk about carbon capture, Mr. Powell. The 
Department of Energy announced last year that they were funding 
two cost-sharing projects in Georgia with Georgia Tech and the 
Southern States Energy Board. Georgia Tech is researching 
direct air capture technology under realistic conditions for 
global deployment, while the other project by Southern States 
Energy Board in Peachtree Corners is targeting reducing the 
overall cost of direct air capture.
    Mr. Powell, are there any encouraging developments in 
direct air capture technology?
    Mr. Powell. Well, first, thanks so much, Congressman 
Carter. Great to see you, and thanks for your leadership on 
these issues, on supporting the Energy Act and your support for 
nuclear energy. It was terrific to see those grants go to the 
great State of Georgia for research into this really important 
technology. There are some extremely promising developments in 
this space.
    I think we should all remember that a lot of folks are 
setting goals around net-zero, and that means that in the 
future we might still have some parts of our economy that 
continue to emit. For example, it would be extremely expensive 
to stop the emissions in that space; but as long as we net them 
back out with some kind of carbon dioxide removal or direct air 
capture, that is just fine. Right? The climate only cares about 
the net emissions, right, not the absolute emissions. So direct 
air capture could be a really promising technology that would 
be a mechanical removal of CO2 from the atmosphere. 
Some models show that we are going to have to do that at an 
enormous scale, maybe billions of tons in the future, and so we 
need to be investing now to radically bring down the cost of 
that technology.
    There are now a number of companies that are actively 
working on it and even ready to deploy this technology in the 
United States. I think the largest project and the one that is 
probably the most promising is Carbon Engineering's proposed 
project in the Permian Basin where they are working with 
Occidental Petroleum. They are going to remove CO2 
from the atmosphere at enormous scale, up to a million tons a 
year. They are going to put that underground and use it for 
enhanced oil recovery, and that will actually----
    Mr. Carter. I think he froze. I am sorry for that.
    But if it is okay, I don't mean to interrupt you, but I am 
going to go ahead because the clock is ticking, and I really 
want to get to this, and what it is about is it is about carbon 
capture and--I am sorry, you froze there, Mr. Powell, but I 
want to get to this, so please allow me if you will.
    Georgia--and this will be the first time I have ever said 
this before this committee, but Georgia is the number one 
forestry state in the country, and certainly growing trees can 
sequester more carbon dioxide than the annual U.S. emissions 
from passenger vehicle travel, forest products, manufacturing 
facilities, forest harvest operations, and estimated wildfires.
    What can we do to further incentivize carbon capture 
through our nation's forests?
    Mr. Powell. So natural climate solutions, particularly the 
forestry space, I think are a really important part of this 
picture, and the most promising thing would be if we could find 
a way to use those to sequester that CO2 in those 
forests and forest products and then to either permanently use 
them, for example, in building materials, so that never goes 
back up into the air or use some of those forest products for 
bioenergy, and combine that with carbon capture and storage, 
that actually creates negative emissions power generation----
    Mr. Carter. Right.
    Mr. Powell [continuing]. Which would be a hugely important 
way in the future to both continue having a clean energy 
generating economy and to be pulling CO2 out of the 
air as we are doing it.
    Mr. Carter. Okay. Just a few seconds left.
    Why don't we use more biomass in this country?
    Mr. Powell. That is a great question.
    I think that there is some disagreement about the carbon 
impacts of biomass. I think there is no disagreement that if 
you combined it with carbon capture, we would actually have 
negative emission, you know, power generation, and that could 
be a really powerful tool in our clean energy arsenal.
    Mr. Carter. Great. Thank you, Mr. Powell.
    And thank you, Madam Chair.
    Ms. Castor. Thank you, Rep. Carter.
    Well, thanks to our witnesses today. You all have been 
terrific, provided very insightful constructive testimony, so 
thanks again.
    Oh, okay. Before--Gary Palmer makes it under the wire. So, 
Rep. Palmer, you are recognized for 5 minutes.
    Mr. Palmer. Thank you, Madam Chairman. I was unavoidably 
delayed.
    Mr. Powell, I think some of this has been discussed 
already, but it was noticed by a witness from our last hearing 
that studies showed that an estimated 90 percent of electric 
vehicle owners earn over $100,000 a year, yet somehow my 
Democrat colleagues think we are going to be able to provide 
every American with an electric vehicle.
    Do you think giving wealthy individuals thousands of 
dollars to buy a vehicle that they can clearly afford is a good 
use of money?
    Mr. Powell. You know, I think the thing we need to remember 
about electric vehicles is that they are only as clean as the 
power grid that supplies them with power. Our argument would be 
that the highest and best use of public funds would be making 
sure that there is a clean grid in the first place to power 
those electric vehicles, and I think at a ton per ton of carbon 
dioxide emissions reductions, in most cases it is more 
efficient to put incentives and resources into making the grid 
cleaner than to incentivizing the purchase of the EVs.
    Mr. Palmer. The cost of making the grid cleaner--and they 
are pushing for a uniform grid which would basically replace 
the existing grid--could run into the trillions of dollars, and 
that is eventually going to be passed on to everybody in the 
form of higher energy costs, perhaps even taxes and fees, and 
it will be particularly hard on low-income families. I grew up 
basically dirt poor, so I understand this. We heated our house 
with a coal heater that sat in the kitchen.
    Does that concern you?
    Mr. Powell. Well, Congressman Palmer, I think that this is 
the reason that we need to think about not radically changing 
and transforming our grid but doing everything we can to use 
the existing grid and the existing infrastructure and the 
existing assets. That is preserving our existing nuclear 
plants. That is finding ways to retrofit as much of our 
existing coal- and gas-fired power plants with carbon capture 
technologies as we possibly can. So that is finding ways we 
don't have to tremendously overbuild our grid or tremendously 
overhaul the transmission infrastructure but try to keep the 
costs low.
    Mr. Palmer. I am one of these all-of-the-above, but when 
you talk about--I am talking about they want to replace the 
grid. If we maintain the grid that we have, which is a 
patchwork grid, then we have got to come up with some kind of 
technology that can store power, energy for days, and that 
technology doesn't exist right now. And the grid requires a 
consistent baseload.
    So if we have this grid, it is going to have to be backed 
up with some other form of fuel, whether it is nuclear or 
natural gas. I literally had a Democrat witness recommend using 
natural gas to back it up, which would require the laying of 
new pipe.
    Mr. Powell. So we absolutely need flexible and baseload 
zero-emitting sources for a low-cost, low carbon power grid in 
the future.
    Completely agree with you that energy storage is also a big 
priority there. I think there has been some really interesting 
advances in those technologies. There was actually one 
announced just last week. Forum Energy believes that it has 
made a breakthrough in very long duration energy storage 
technologies that would be 90 percent cheaper than today's 
battery technology and get around a lot of the really 
problematic sourcing of critical minerals from China and some 
of our other geopolitical competitors globally by using iron, 
which we could source here domestically in the U.S., so----
    Mr. Palmer. We have got to address the whole issue of the 
minerals as well, but you have a pretty good understanding of 
what it will take to build out this grid. My Democrat 
colleagues think that we only have like 9 years left to get it 
done. Can we get it done in 9 years? Can we do everything that 
you want to do in 9 years? Are we doomed? Are we doomed?
    Mr. Powell. We----
    Mr. Palmer. I mean, is this all just an involved fantasy?
    Mr. Powell. We are not doomed. We are not doomed. We do 
have----
    Mr. Palmer. Do you all think we only have 9 years left to 
get it done?
    Mr. Powell. I do not. So climate change is, I think, best 
thought of as a chronic condition for the planet. I think that 
is the better way to think about it than an emergency. It is 
something we are going to have to deal with for decades, if not 
centuries, and we have got to marry----
    Mr. Palmer. Let me cut you off there because I have only 
got a few seconds left.
    It is something we are going to have to deal with as long 
as humankind exists because the history of climate change is in 
the geologic record, and it is not necessarily related to the 
emissions of CO2. CO2 certainly has an 
impact on it; but in the short term and the long term, in terms 
of climate change, what we have got to address is natural 
variation. We are not doing that. And with all due respect to 
all of the witnesses, this idea that we are going to stop 
climate change by building a renewable grid, clean energy grid, 
that is fantasy.
    I yield back.
    Ms. Castor. All right. Well, I want to start--I wanted to 
end where I started today, and that is the need to cut carbon 
pollution as quickly as possible. We are all witness to the 
rising harms, the escalating costs, and we have got to do 
everything in our power to avoid the catastrophic impacts of 
the climate crisis. It is not some political imperative. It is 
a scientific imperative. And it is our moral obligation to our 
kids and our grandkids. And, fortunately, we can tap American 
ingenuity to help solve the climate crisis, and that is what we 
intend to do. We have made progress, but we have the 
technologies now to go farther and help deploy them, as all of 
the witnesses said, globally.
    This is what America does best. We research, we develop, we 
deploy, we share, and we sell to the rest of the world, and 
that is what we need to do. But we need Federal policies here, 
tax credits, creative financing policies to help get us there, 
and that will benefit workers. It will benefit our neighbors 
back home. It will make the air we breathe cleaner, and it will 
lift everyone all across this country.
    So thanks again to all of our witnesses for being here 
today.
    Without objection, all members will have 10 business days 
within which to submit any opening statements and additional 
written questions for the witnesses. I ask our witnesses to 
please respond as promptly as you are able.
    Thanks again, everyone. The committee is adjourned.
    [Whereupon, at 10:53 a.m., the committee was adjourned.]

                 United States House of Representatives

                 Select Committee on the Climate Crisis

                        Hearing on July 29, 2021

            ``Financing Climate Solutions and Job Creation''

                        Questions for the Record

                             Duanne Andrade

                 Chief Financial and Strategic Officer

                       Solar and Energy Loan Fund

                       the honorable kathy castor
    1. Ms. Andrade, could you please describe how a Clean Energy and 
Sustainability Accelerator could help create local jobs in communities 
across the country?

    If funded with the $100 billion capitalization envisioned in Rep. 
Dingell's 
H.R. 806, the Clean Energy & Sustainability Accelerator is projected to 
deliver 440,000 jobs in its first year, and over five and a half 
million jobs within its first five years according to an independent 
analysis from Vivid Economics.\1\ The chart below shows the 
distribution of job categories projected from Accelerator investment.
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    The Coalition for Green Capital identified more than a hundred 
types of jobs directly created with an Accelerator, from aerospace and 
marine engineers to roofers and welders, and found real-world job 
postings for each category.\2\ These job types range from requiring no 
college degree to PHD, and the average salary was $73,853.
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    In terms of local job creation, my organization (the Florida Solar 
& Energy Loan Fund--SELF) has over 700 approved contractors in our 
network. They've told us that without SELF, they'd lose anywhere 
between 20 to 40 percent of business due to clients lacking access to 
financing. One of our contractors, SEA COAST a local mom-pop shop in 
Fort Pierce, Florida has financed 200 projects worth over $1 million 
with SELF.
    Another one, Westfall Roofing, in a recent interview with The 
Invading Sea, said that without SELF financing, many people would not 
be able to fix their homes. They have grown their market and increased 
business with SELF financing.

    2. Ms. Andrade, could you please describe how homeowner investments 
in energy efficiency, renewable energy, and resilience upgrades can be 
complementary and can help homeowners save money?

    As a mission-driven, non-profit green bank, the Solar and Energy 
Loan Fund (SELF) provides financial inclusion, low-cost financing, and 
project management to help low- and moderate-income (LMI) homeowners 
overcome the high upfront cost of energy efficiency, resilience, and 
renewable energy upgrades, such as: high-efficiency air conditioners; 
fortified roofs; and, rooftop solar photovoltaic (PV) systems. These 
sustainable home improvement projects go hand in hand to enhance 
benefits for homeowners that include: energy savings (high efficiency 
A/Cs and Solar PV systems; increased safety from climate impacts (storm 
resistance with fortified roofs, impact windows and doors); lower 
utility bills (with water conservation upgrades); and improved health 
and safety for aging in place (ancillary disability home adaptations). 
The array of improvements that SELF finances ultimately increases 
climate resilience which results in the preservation of generational 
wealth, the home; and the sustainability of our environment, through 
transforming our homes to low-carbon, weather resistant homes.
    SELF helps homeowners through the process of going all the way to 
net-zero when possible by encouraging a step by step approach that 
maximizes savings and benefits. For example, if a home is not 
weatherized and sealed, SELF encourages the homeowner and contractor to 
add this to the project to be financed with the new high efficiency air 
conditioner. Once the home is sealed and has reduced energy demand 
through energy efficiency upgrades, the next step is to replace the 
energy source with a clean source by going solar or using other 
renewable sources. In Florida, solar is the most appropriate source of 
clean energy and has the potential to save up to 100 percent of the 
energy cost. These benefits can be further enhanced by homeowners 
having access to solar plus battery storage which would provide 
increased safety and health benefits during climate events that cause 
power outages-which are increasingly frequent. In order to obtain 
maximum economic and social benefits, these upgrades would be paired 
with fortified roofs that have the highest wind code to withstand 
storms and protect the lives and assets of residents. With higher wind 
resistant roofs homeowners increase climate resilience and safety, and 
also significantly reduce insurance costs. In many cases homeowners are 
unable to qualify or simply can't afford insurance due to the home 
having older roofs and windows which don't meet the minimum standard 
required by insurance.
    An integrated approach to clean energy and resilience is the only 
way to ensure a sustainable path to low carbon, sustainable 
communities. Resiliency upgrades (i.e., fortified roofs, impact windows 
and doors), help our homeowners save money by lowering their insurance 
costs, reinstating them to insurance coverage, and by protecting what's 
often the only asset owned by the low-to-moderate Americans we serve. 
Energy efficiency upgrades save homeowners money by ensuring energy 
does not wastefully slip through a leaky window or cheaply built roof. 
Renewable energy saves our homeowners money by producing energy more 
cheaply than traditional energy sources and allowing for climate-
emergency response with backup storage.
    However, these higher standards of homes call for upfront 
investments that are unaffordable, especially for many vulnerable low-
and-moderate income homeowners living in older dwellings with limited 
or no access to affordable and flexible financing options.
    SELF has been working at the grass roots level in LMI communities 
for a decade now and since the beginning we listened to the needs of 
homeowners and to the challenges they faced to life in safe, healthy 
and affordable homes. We understood the benefits of pairing wind 
resistance with energy efficiency and clean energy early on when we 
observed that homeowners needed to fix their roofs before they could 
even consider solar energy- and that in order to maximize savings and 
social benefits, we needed to provide a path to transition to clean 
energy and that meant making the home solar ready by addressing the 
envelope, sealing, weatherizing, fortifying roofs, installing energy 
efficient appliances and then transitioning to solar energy. By 
addressing the home as an ecosystem and combining these upgrades, 
homeowners can unlock significant savings in insurance costs and reduce 
or eliminate energy costs altogether which frees up a significant 
proportion of their income spent on energy, utilities and insurance. 
Finally, by combining these upgrades, homeowners also increase the 
equity in their homes, maximize safety and preserve and protect 
generational wealth in their homes. That is why we created loan 
products to finance the full spectrum of home improvements to unlock 
savings with quality of life benefits.
    Climate resilience and clean energy need to go hand in hand to 
maximize economic, social and health benefits not only to residents but 
to communities as a whole. This combination reduces potential losses 
during climate events (saving tax payers dollars in emergency funds 
like FEMA), while transforming neighborhoods and communities into 
sustainable, affordable, low-carbon, safe and healthy places to thrive 
in- today, and in the future.
    In order to produce this transformation what is needed is: 
financing. We need inclusive, equitable capital to deploy in all 
communities, especially, disadvantaged communities. There is expertise 
and technology ready to be deployed.
    That is why funding for an independent, nonprofit Clean Energy & 
Sustainability Accelerator is so critical to the transition towards a 
clean energy economy and the achievement of broader national and global 
carbon emission reduction goals. The funding would allow green banks 
across the country to leverage private capital and help homeowners 
across the income spectrum participate in the benefits of a clean 
energy economy, especially low-income residents who are the most energy 
burdened.
    SELF is much more than a green bank who is fostering the clean 
energy economy. Our lending programs and complementary services also 
provide: vital health benefits and quality of life to working-class 
families, disabled homeowners, veterans, and retirees on fixed incomes; 
significantly reduce operating costs, risk, anxiety and unnecessary 
suffering; enhance operational efficiencies, property values and 
generational wealth; decrease harmful carbon-based emissions and 
related climate impacts; and, create green jobs and support local 
companies. Shifting to a more sustainable and resilient economy is not 
a sacrifice, it's an enormous missed opportunity that can promote 
widespread and complementary benefits to our communities at large, the 
economy, and particularly those individuals most-effected by climate 
change. For more details on types of improvements that SELF provides 
financing for see Appendix A.

                               APPENDIX A

Common types of home improvement projects financed by SELF.
    One of the most common types of home improvement projects that SELF 
helps LMI homeowners finance is high-efficiency air conditioners (e.g., 
16+ SEER system), which typically reduces household energy use and 
costs by 20-25%. These basic upgrades generate an annual savings of 
$500-600 per household per year and greatly improves their health and 
overall quality of life. Having a functioning A/C in Florida during the 
sweltering summer heat and humidity is not a luxury item for the 
elderly, disabled and children. The new high-efficiency A/Cs also 
enhance property equity and generational wealth, while cutting the 
carbon footprint of the household and creating local green jobs. SELF's 
#1 contractor is a family-owned A/C company in St. Lucie County, FL, 
which has completed more than $1 million of projects financed by SELF. 
SeaCoast AC employs dozens of local people, pays substantial local 
property and business taxes, and they rely exclusively on American made 
products (``supply chain'').
    Another common project SELF finances is roof repairs/replacement 
which are not only safeguarding families and homes during hurricanes 
and extreme storm events, which are on the rise, but also reducing home 
insurance premiums by $700-$1,000 per year. Roof repairs and upgrades 
also provide additional energy savings and make the homes ``solar-
ready''. Homes are also most often the largest family asset in LMI 
communities, so these fundamental repairs also provide long-term 
benefits as the home is passed on to the next generation. These 
projects also create additional work for local certified contractors 
and skilled craftsmen.
    Finally, solar PV prices have dropped by 80% over the last decade 
so it is now more cost-effective to build your own rooftop solar PV 
system than it is to buy carbon-based fuels off the grid. Homeowners 
can save $10,000 or more on their energy bills over the warrantied life 
of the solar PV system, substantially increase the market value of 
their homes, and re-direct the outflow of energy dollars from leaving 
the Sunshine State. These PV projects also dramatically reduce harmful 
carbon emissions and generate substantial work for local solar 
contractors.

                        Questions for the Record

                              John Larsen

                                Director

                             Rhodium Group

                       the honorable kathy castor
    1. Mr. Larsen, in your testimony, you highlight some critical 
improvements to clean energy tax credits, like making them available 
for direct pay, allowing developers to choose between the Production 
and Investment Tax Credits, and providing a long-term full value 
extension of the tax credits. Given that wind and solar are abundant 
and affordable, why do we need to extend and expand clean energy tax 
credits? Can we just assume we'll meet our climate goals without them?

    Wind and solar costs have come down dramatically over the past two 
decades. As a source of new electricity, they now represent the 
majority of annual capacity additions in the U.S. outpacing natural gas 
(EIA 2021). In the absence of a national climate policy that cuts 
electric power emissions, extension and expansion of clean energy tax 
credits can do more than just outcompete new fossil fuel-fired power 
plants to meet new demand. Clean energy tax credits can make new wind 
and solar competitive against existing fossil fuel-fired power plants. 
The capital expenses associated with most existing coal and natural 
gas-fired power plants are largely paid off, and these assets are fully 
depreciated. This means that all they need to compete in electric 
markets is to covering their operating costs on an annual basis. This 
is a much smaller amount of cost than recovering the operating and 
capital costs associated with new capacity. To date, wind and solar 
have largely led to avoiding emissions from new fossil fuel fired power 
plants. Enhanced and extended tax credits, combined with continued 
technology costs declines will allow the next wave of wind and solar to 
both displace new and existing power plants and lead to greater 
reductions of greenhouse gases.

    2. Mr. Larsen, we will need more than public investment to meet our 
climate goals. How do Federal tax credits help leverage private capital 
to accelerate the transition to a clean energy economy?

    Federal tax credits provide a stable, certain and familiar 
incentive for private capital to invest in renewables as opposed to 
conventional fossil alternatives. The incentive is large enough to 
entice private capital away from fossil investments and attract capital 
that might otherwise sit on the sidelines. Investors then get the 
benefit of a rate of return on the investment as well as a reduction in 
their tax liability. Meanwhile, more clean energy gets built around 
America.

    3. Mr. Larsen, we know zero-emission vehicles are cleaner and cost 
less over a vehicle's lifetime than vehicles with internal combustion 
engines. Based on your work at the Rhodium Group on EV policies, could 
you please explain how tax credits for zero-emission vehicles would 
help increase deployment?

    Long-term extensions of the 30D EV tax credit and removal of 
manufacturer sales caps cut the cost of new EVs for consumers and make 
them more competitive with conventional vehicles on an upfront cost 
basis. Previous Rhodium analysis found that a ten-year extension of the 
tax credit could drive EV sales to 40-52% of total light-duty vehicle 
sales in 2031. In a scenario, with no tax credit extension, we found 
that EVs only achieve 27-39% of total LDV sales in 2031.

    4. Mr. Larsen, many of the clean energy technologies we need to 
achieve deep decarbonization across our economy are still under 
development. The International Energy Agency estimates that 75% of the 
cumulative CO2 emissions reductions needed to shift to a 
sustainable path come from technologies that are in the demonstration 
and early deployment phase. How can Congress better support innovation 
and emerging clean energy technologies via the array of available 
financial tools, policies, and incentives?

    There are four general categories of policies that can help the 
development and deployment of emerging clean technologies.

      First, investing in research and development (R&D) of a 
diverse array of new and emerging technologies. The U.S. is a leader in 
this space. The Energy Act of 2020 constructs and revamps clean energy 
R&D and the Infrastructure package contains even more enhancements.
      Second, funding the construction of large-scale 
demonstration projects and early commercial deployment of developed 
technologies. Without government support, many emerging clean 
technologies get to initial deployment and stall because it's difficult 
to attract investors to fund new and untested technologies. Government 
direct investment and cost-share programs, as well as tax credits, can 
help get new technologies off the ground at scale and reduce financial 
risks.
      Third, long-term commercial incentives are required to 
send firm signals to the market that clean technologies need to be 
deployed to achieve emission reductions goals. There are many forms 
these signals can take. Carbon pricing, regulations, clean energy 
standards (including clean fuel or clean product standards), and tax 
credits can all play a role. The key is to make the deployment of 
emerging clean technologies more profitable than continuing the status 
quo.
      Fourth and finally, non-cost barriers to clean technology 
deployment need to be addressed or else efforts in the first three 
categories won't drive change. Non-cost barriers include but are not 
limited to permitting constraints, access to resources, public 
understanding/acceptance of new technologies, access to and siting of 
infrastructure and other issues. The federal government has a role to 
play in all of these areas to allow clean technologies to scale up in a 
safe and responsible way.

    5. Mr. Larsen, according to analysis from the Rhodium Group, in 
order to be on track for 100% clean generation in 2035, emissions need 
to be 80% below 2005 levels in 2030. This means we need to both support 
rapid deployment of additional clean energy technologies and ensure we 
don't lose any of the existing sources of clean energy available to us 
today. What type of support could help existing clean energy generation 
sources stay online in the coming decades? And can we ensure new 
incentives go only towards supporting displacing fossil fuels?

    Due to competition with fossil fuels and a lack of valuing their 
clean energy attributes, some existing clean resources are at risk of 
early retirement by the end of this decade. For example, depending on 
market conditions, Rhodium estimates that nearly a third of the 
existing nuclear fleet could retire by 2030 without new policy support. 
If these plants retire, then even more new clean capacity will be 
needed to get on track for 100% clean generation in 2035, or fossil 
generation will replace it instead. A clean electric standard or clean 
electric performance program that provides a technology-neutral 
incentive to increase the amount of clean generation in the U.S. 
(regardless of whether its existing or new) can provide incentives to 
retain at-risk existing clean capacity. Targeted federal programs or 
tax credits that provide incentives to retain existing clean generation 
can also be useful tools to do the same.
    Beyond the goal of meeting 100% clean generation, retaining 
existing clean resources also helps to ensure that all new clean 
generation displaces fossil generation. This is one way to maximize the 
climate benefits of clean energy tax credits. Without existing clean 
support, there is a risk that new clean will outcompete existing clean 
generation leading to no net change in total clean generation and no 
change in emissions.

    6. Mr. Larsen, how can tax credits and a clean electricity standard 
serve as complementary policies?

    Tax credits complement a clean electricity standard (CES) in a few 
ways. First, they shift some of the costs of complying with a CES away 
from ratepayers and on to the federal government. This reduces the cost 
to consumers of decarbonizing the electric power sector. Second, tax 
credits can accelerate the deployment of grid improvements needed to 
meet high levels of clean electricity penetration, such as storage and 
transmission. They make it easier to achieve CES targets. Finally, they 
can shift CES compliance towards technologies that receive tax credits. 
This may be desirable if the CES is technology-neutral. Still, some tax 
credit eligible technologies help to meet other policy goals such as 
domestic manufacturing or increasing reliance on renewable energy 
instead of nuclear.

    7. Mr. Larsen, could you please explain how the investment tax 
credit (ITC) has driven access to, deployment of, and innovation in 
solar energy? How could a long-term extension of the ITC help build on 
this success?

    Since its inception 15 years ago, the ITC has been a critical 
incentive for the early and current commercial scale-up of utility-
scale solar generation. Initially, solar's high cost and relatively low 
capacity factors made other deployment incentives such as the 
production tax credit ineffective at driving deployment. Over the last 
decade and a half, a whole industry has arisen around the scale-up of 
utility-scale solar. All of it is thanks to the ITC.
    While a long-term extension of the ITC will help solar continue to 
thrive without more comprehensive decarbonization policies, its 
usefulness will diminish relative to other options. Since the value of 
the ITC is defined as a share of the costs of developing a solar 
project, that value has and will continue to decline as the cost of 
solar declines. In high-quality solar resource areas in the U.S. today, 
the ITC is a less valuable incentive than the PTC because of this 
dynamic. The PTC is a fixed value payment based on generation. As solar 
costs decline, the PTC's value as a share of the total cost of solar 
energy will increase, whereas the ITC's value will decrease. This is 
why Rhodium research shows that a flexible tax credit framework that 
allows solar developers to choose the PTC or ITC, whichever works best 
for them, can lead to even faster clean energy deployment compared to 
simple extensions of the current tax credit framework.

                            References Page

    Larsen, J., King, B., Hiltbrand, G., & Herndon, W. (2021, April 
21). Capturing the Moment: Carbon Capture in the American Jobs Plan. 
Retrieved from Rhodium Group: https://rhg.com/research/carbon-capture-
american-jobs-plan/

    Larsen, J., King, B., Kolus, H., & Herndon, W. (2021, March 23). 
Pathways to Build Back Better: Investing in 100% Clean Electricity. 
Retrieved from Rhodium Group: https://rhg.com/research/build-back-
better-clean-electricity/

    Larsen, J., King, B., Kolus, H., & Wimberger, E. (2021, May 13). 
Pathways to Build Back Better: Investing in Transportation 
Decarbonization. Retrieved from Rhodium Group: https://rhg.com/
research/build-back-better-transportation/

    Larsen, J., King, B., Kolus, H., Dasari, N., & Herndon, W. (2021, 
July 8). Pathways to Build Back Better: Maximizing Clean Energy Tax 
Credits. Retrieved from Rhodium Group: https://rhg.com/research/build-
back-better-clean-energy-tax-credits/

    Larsen, J., Mohan, S., & Houser, T. (2021, April 20). Pathways to 
Build Back Better: Jobs from Investing in Clean Electricity. Retrieved 
from Rhodium Group: https://rhg.com/research/build-back-better-jobs-
electric-power/

                        Questions for the Record

                               Zoe Lipman

           Director, Manufacturing & Advanced Transportation

                           BlueGreen Alliance

                       the honorable kathy castor
    1. Ms. Lipman, we know zero-emission vehicles are cleaner and cost 
less over a vehicle's lifetime than vehicles with internal combustion 
engines. Could you please explain how incentives for consumers to buy 
zero-emission vehicles and incentives for automakers to build zero-
emission vehicles in America could be helpful?

    Sufficient and targeted consumer incentives that expand and speed 
uptake of cleaner vehicles are important to transitioning the 
nationwide vehicle fleet to electric vehicles at the pace needed to 
achieve climate goals. At the same time, we must urgently support 
increased domestic manufacturing in meeting this quickening demand for 
EVs. Our competitors worldwide are also moving fast to capture the 
economic gains from this shift. If the U.S. is going to successfully 
meet our climate, jobs or economic goals, we will need both a supply- 
and demand-side approach. We will need to use a coordinated set of 
tools to support the domestic manufacture and deployment of cleaner 
vehicles, and to ensure that the shift to electric vehicles protects 
and creates good jobs in communities across America--together these 
actions are key to enabling a rapid, equitable and sustainable 
transition to clean transportation.i
    Consumer incentives stand to play a significant role in shaping the 
shift to electric vehicles, as well as the manufacturing, jobs, and 
community impacts of that transition. Specifically, the 30D consumer 
tax credit for electric vehicles should be updated (such as described 
in Sen. Stabenow's amendment to The Clean Energy for America Act (S. 
1298)) to incentivize strong manufacturing labor standards and support 
domestically manufactured EVs.
    By incentivizing vehicles assembled in the U.S. with greater 
domestic content, and vehicles built in union facilities, the consumer 
EV tax credit can help retain and grow the next generation of high-
skill, high-wage, family-supporting jobs in the United States, while 
accelerating the domestic electric vehicle production and supply chain 
investment and growth necessary to secure long-term U.S. 
competitiveness in the automotive sector. To maximize the equitable 
deployment of EVs, the credit should be made refundable, or ideally, 
available at the point of sale.
    Additionally, Congress should establish a tax credit to incentivize 
the purchase of used EVs, which could improve access to EVs for low- 
and moderate-income consumers, and Congress should ensure that such a 
credit is similarly refundable and targeted. Similar criteria for 
domestic manufacturing, labor standards, and addressing equity should 
be applied to the 30B credit for other advanced technology vehicles.
    We also support the ongoing work to expand the 30C tax credit for 
charging infrastructure, as robust proliferation of easily accessible 
charging will be essential to the success of EV adoption. Incentives 
for charging infrastructure should ensure availability for all 
communities, with a priority on filling gaps in low income, rural, and 
deindustrialized communities and communities of color, and availability 
for residents of multi-family housing, and be refundable. These 
incentives should also require certified training for installation of 
electric vehicle supply equipment (such as the Electric Vehicle 
Infrastructure Training Program, or EVITP) and the domestic manufacture 
of charging stations.
    On the manufacturing side, incentives to expand and retool the 
domestic factories building the clean vehicle fleet of the future, and 
to establish and grow the domestic EV technology supply chain in the 
U.S. are essential to secure the economic and jobs benefits 
accompanying this major sector transformation. Key incentives include:

      The 48C Advanced Manufacturing Tax Credit Program.
      New production and investment tax credits for facilities 
in the EV supply chain.
      Enhanced funding and expansion of DOE advanced automotive 
loan and grant programs, including the Advanced Technology Vehicle 
Manufacturing (ATVM) loan program and manufacturing conversion grant 
programs.

    48C Advanced Manufacturing Tax Credit Program: The always-
oversubscribed 48C tax credit program has provided funding to over 180 
facilities--predominantly in small- and medium-sized manufacturing--to 
establish or expand domestic production of a wide range of clean energy 
and industrial products, including EV components and 
materials.ii By increasing funding for the tax credits (and/
or comparable grants) Congress can provide the necessary funds to 
establish or retool facilities manufacturing batteries and battery 
materials, semiconductors, inverters, motors, and facilities that 
process and recycle critical minerals. These tax credits should 
prioritize investment in economically distressed communities, 
deindustrialized, and disadvantaged communities.
    New manufacturing production and investment tax credits: The recent 
global semiconductor technology shortage, and its impacts on the 
domestic auto sector, illustrate how our reliance on a limited number 
of foreign suppliers for critical components can threaten our economic 
security. For the growing EV market, the challenge is even greater; the 
U.S. lags behind its competitors in producing key propulsion system 
technologies. Through a new manufacturing investment tax credit (ITC) 
designed to fill economically critical supply chain gaps, Congress can 
provide key support to speed investment in establishing landmark 
production facilities, while a production tax credit (PTC) can aid in 
supporting the domestic scale-up of novel technology production. These 
investments will facilitate the national transition to EVs, protect and 
create high-quality jobs, build resilience and stability into the 
domestic EV supply chain, and ward off or reverse the offshoring of 
good jobs throughout the automotive supply chain.
    ATVM: The ATVM plays a key role in spurring major auto and 
component manufacturers to locate their advanced vehicle and technology 
facilities in the U.S., rather than abroad, reducing risk as technology 
and markets shift. The ATVM has supported the establishment, retooling 
or expansion of domestic auto manufacturing facilities in eight states 
to build clean, fuel-efficient, and electric vehicles. The policy has 
sustained or created at least 35,000 direct jobs, and 200,000 indirect 
jobs. As the market accelerates toward EVs, the ATVM can again provide 
essential support for auto and manufacturing jobs throughout the supply 
chain, while facilitating vehicle emission reductions.
    Manufacturing Conversion Grants: Conversion and retooling grants 
can play 
a key role in bringing new technology into existing facilities, and 
maintaining 
supplier networks and workforces. This allows for expansion of the 
domestic EV 
manufacturing sector and enhancement of local jobs and community 
benefits, while avoiding--and in some cases, redressing--the harms of 
poor industrial policies of the past. These grants are key to an EV 
transition that puts workers and communities first.
    We discuss these programs in more detail below.

    2. Could you please describe the types of policies and investments 
that could help expand, retool, and convert U.S. automotive and 
component manufacturing facilities to build advanced vehicles?

    There are five principal mechanisms by which Congress can support 
manufacturing and good jobs all throughout the domestic automotive 
supply chain: the Advanced Technology Vehicle Manufacturing loan 
program (ATVM); conversion & retooling grants for recently-closed or 
at-risk facilities; the 48C Advanced Manufacturing tax credit program; 
production and investment tax credits for critical components in the EV 
supply chain; and labor standards, domestic content requirements, and 
equity provisions in EV deployment incentives. These mechanisms are 
described in detail below:

Fund the Advanced Technology Vehicle Manufacturing (ATVM) loan program 
at the Department of Energy to restore rescinded funds and expand 
existing authority to additional technologies, including medium- and 
heavy-duty vehicles, electric vehicle subcomponents, charging 
infrastructure, and other economically critical materials and 
technologies.

    The ATVM plays a key role in spurring major auto and component 
manufacturers to locate their advanced vehicle and technology 
facilities in the U.S., rather than abroad, reducing risk as technology 
and markets shift. The ATVM has supported the establishment, retooling 
or expansion of domestic auto manufacturing facilities in eight states 
to build clean, fuel-efficient, and electric vehicles. The policy has 
sustained or created at least 35,000 direct jobs, and over 200,000 
indirect jobs.iii As the market accelerates toward EVs, the 
ATVM can again provide essential support for auto and manufacturing 
jobs throughout the supply chain, while facilitating vehicle emission 
reductions. Congress should at minimum replace the portion of ATVM 
funding rescinded in 2020, and increase funding to cover expanded 
program scope that includes medium and heavy duty vehicles and 
components manufacture, related electric charging and hydrogen fueling 
equipment, and other critical materials and technologies, which 
represent the key frontiers of advanced vehicle innovation. The ATVM is 
a high-impact program that, with comparatively modest additional 
federal investment, can enable tens of billions in manufacturing loans. 
The program demonstrates how centering manufacturing as an integral 
part of the nationwide vehicle transition can yield wins for jobs and 
the climate. With additional funding, the program could be utilized to 
spur investment across even more of the advanced transportation market 
and value chain. The broad impacts of past--and potentially, future--
use of the program are illustrated below.iv

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


Invest in Manufacturing Conversion & Industrial Retooling Grants to 
leverage the facilities and expertise we have today to build the clean 
vehicle fleet of the future.

    The closure of manufacturing facilities can have widespread and 
lasting economic impacts on manufacturing communities, while 
undermining valuable manufacturing capacity, networks, and workforce 
capabilities. Manufacturing conversion and industrial retooling grants 
(such as authorized in Section 132 of the 2007 Energy Independence and 
Security Act) mitigate against this community devastation and costly 
economic disruption by directing investment to refurbish and retool 
recently-closed or at-risk facilities in the auto manufacturing sector. 
Conversion and retooling grants can play a key role in bringing new 
technology into existing facilities, and maintaining supplier networks 
and workforces. This allows for expansion of the domestic EV 
manufacturing sector and enhancement of local jobs and community 
benefits, while avoiding--and in some cases, redressing--the harms of 
poor industrial policies of the past. These grants are key to an EV 
transition that puts workers and communities first.

Robustly fund the 48C Advanced Manufacturing Tax Credit Program to 
support small- and medium-sized manufacturers that largely comprise the 
automotive supply chain.

    The highly successful 48C tax credit program has a proven track 
record of enabling predominantly small- and medium-sized manufacturers 
to establish or expand domestic production of a wide range of clean 
energy and industrial products, including EV components and materials. 
With major increases in funding for these tax credits (and/or 
comparable grants) Congress can provide the necessary funds to 
establish or retool facilities manufacturing batteries, semiconductors, 
inverters, motors, and facilities that recycle critical minerals. 48C 
tax credits are also essential to spur manufacturing expansion in other 
critical clean technology sectors. These tax credits should prioritize 
distressed communities, including those that have traditionally relied 
on the fossil fuel economy for their livelihoods.

Fill domestic EV supply chain gaps through strategic manufacturing 
investment and production tax credits, among other potential measures.

    The recent global semiconductor technology shortage, and its 
impacts on the domestic auto sector, illustrate how our reliance on a 
limited number of foreign suppliers for critical components can 
threaten our economic security. For the growing EV market, the 
challenge is even greater; the U.S. lags behind its competitors in 
producing central EV propulsion system technologies. Through a new 
manufacturing investment tax credit (ITC) designed to fill economically 
critical supply chain gaps, Congress can provide key support to speed 
investment in establishing landmark production facilities, while a 
production tax credit (PTC) can aid in supporting the domestic scale-up 
of novel technology production. These investments will facilitate the 
national transition to EVs, protect and create high-quality jobs, build 
resilience and stability into the domestic EV supply chain, and ward 
off or reverse the offshoring of good jobs throughout the automotive 
supply chain.

Update and extend the 30D tax credit (as described in the Stabenow 
amendment) to incentivize strong manufacturing labor standards and 
support domestically manufactured EVs, and extend the 30B and 30C tax 
credits with labor standards and domestic manufacturing safeguards.

    Ensuring our clean energy deployment tax credits are also updated 
to include labor and domestic content standards is also key to support 
and complement the protection and growth of domestic manufacturing and 
jobs.
    By incentivizing vehicles assembled in the U.S. with greater 
domestic content, and vehicles built in union facilities, the consumer 
EV tax credit can help retain and grow the next generation of high-
skill, high-wage, family-supporting jobs in the United States, while 
accelerating the domestic electric vehicle production and supply chain 
investment and growth necessary to secure long-term U.S. 
competitiveness in the automotive sector.
    To maximize the equitable deployment of EVs, the credit should be 
made refundable, or ideally, available at the point of sale, and 
include an appropriate MSRP cap. Additionally, we should expand the 
reach of the EV tax credit to more consumers--particularly those who 
may not otherwise have been able to purchase and EV through the 
addition of a used EV credit.
    Spurring domestic demand for EVs can and should boost American 
innovation, American manufacturing, and family-supporting, union jobs. 
Congress has the power to help ensure that American communities and 
workers can access the opportunities arising from this industry 
transformation, rather than facilitating the flight of good jobs to 
Asia and Europe, where key elements of the EV value chain are currently 
concentrated, and where policymakers are taking stronger actions to 
spur the production of key technologies.v Our consumer 
incentives should reward increased investment in U.S. manufacturing and 
workers and the creation of good jobs with high labor standards in 
communities across America.

                        Endnotes/References Page

    i. BlueGreen Alliance, EVs Are Coming. Will They Be Made in the 
USA?, April 2021. Available online:
https://www.bluegreenalliance.org/resources/backgrounder-evs-are-
coming-will-they-be-made-in-the-usa/.

    ii. Department of Energy, Fact Sheet: 48C Manufacturing Tax 
Credits, February 2013. Available online:
https://www.energy.gov/downloads/fact-sheet-48c-manufacturing-tax-
credits.

    iii. BlueGreen Alliance, Advanced Technology Vehicles Manufacturing 
Loans: Employment Impacts, November 2016. Available online:
https://www.bluegreenalliance.org/wp-content/uploads/2016/11/ATVM-
employment-impacts-and-potential-FINAL.pdf

    iv. Ibid. Chart and data, BGA. From above report.

    v. Ibid. BGA, EVs Are Coming. Will They Be Made in the USA?.

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