As a judge considers a challenge to the Environmental Protection Agency’s attempt to claw back $20 billion allocated for climate action, company and community leaders are speaking out about the real-world effects of the funding freeze.
City mayors, business executives and nonprofit leaders across the country shared examples of projects and jobs put in limbo when EPA Administrator Lee Zeldin ordered a freeze last month on bank accounts holding money Congress had approved for the Greenhouse Gas Reduction Fund.
The GGRF was established by the Inflation Reduction Act of 2022 to encourage private investment in clean energy, pollution reduction and energy savings, with an emphasis on disadvantaged communities. Achieving that wide goal involves numerous partnerships among home builders, solar panel installers, appliance experts and many more businesses and organizations involved in contracts funded in part by the GGRF. When the EPA froze the bank accounts, the effects rippled across many of those companies that had planned projects or started work based on the government’s contractual funding agreements.
“It leaves an enormous hole,” energy technology entrepreneur Marshall Cox told Newsweek. “It’s an entire ecosystem of companies and business that’s frozen, and many of them are going to go out of business.”
Photo Illustration by Newsweek/Getty Images
Cox is the co-founder and CEO of Kelvin, a company that specializes in sustainability improvements to heating and cooling systems. Cox said his company is not relying on GGRF funds, but he is seeing effects of the freeze among many of his peer companies and clients.
“And you know the real losers here are the low-income communities for which this money was earmarked,” Cox said.
One of the GGRF recipient groups, Opportunity Finance Network, estimated that the EPA’s freeze undermined the planned announcement of $228 million in initial awards to 26 organizations. Opportunity Finance said those projects include housing, distributed energy and transportation infrastructure in 30 states, supporting an estimated 5,000 jobs.
“However, the EPA has arbitrarily sought to cancel obligated funds—awarded through a rigorous, competitive and transparent process—based on inaccurate and politicized claims,” an Opportunity Finance spokesperson said in an email to Newsweek.
In New Mexico, nonprofit community development finance institution Homewise works to make homeownership affordable for more people. Homewise had arranged to work with GGRF recipient Climate United Fund to make possible homeowner loans for solar panels or the replacement of old gas furnaces with more efficient electric heat pumps.
“These projects are often too expensive or feel like a luxury for regular New Mexicans,” Homewise CEO Michael Loftin said in a statement. “GGRF funding can make these upgrades affordable while decreasing energy bills.”
Without GGRF funding, he explained, the home improvement loans will have higher rates and reach only about a quarter of the homeowners they might have with the funding.
In Texas, affordable housing developer O-SDA Industries shared a similar story about a project planned in Fort Worth. The company was going to use $4 million in GGRF financing to leverage an additional $30 million in private capital to build 116 affordable units.
“The freeze on these funds has put the entire development at risk,” O-SDA President Megan Lasch said in a statement.
Ride-hailing company Lyft said it had plans to partner with GGRF recipient Climate United to help qualifying drivers finance the purchase of electric vehicles.
“Keeping these federal funds flowing will ensure drivers can save an estimated 40 percent to 65 percent in fuel costs and $300 per year in maintenance costs,” Lyft said in a statement.
Mayors who had organized to better address climate impacts on their cities said the GGRF freeze, coupled with the EPA’s freeze on other climate-related funding, made it hard for them to continue with projects.
“It’s created a lot of confusion and a lot of uncertainty,” Cleveland Mayor Justin Bibb said during a press call last week to highlight climate action in cities. He said work supported by the GGRF and other EPA funding included home energy-efficiency improvements, solar installations on vacant lots and neighborhood tree-planting programs.
“Some of that’s been paused,” Bibb said. “Mayors in this moment have to protect and defend these investments and keep making the case on why these are important.”
Rochester, New York, Mayor Malik Evans, who was also on the call, said the sudden reversal of funding already approved by Congress undercut the fundamental relationship between local and federal government.
“You have to have an honest and consistent partner in the federal government,” Evans said. “I think the jury is still out on whether or not that will be the case.”
On Saturday, Climate United filed a lawsuit challenging the EPA’s order to freeze the group’s accounts at Citibank, the federally assigned financial agent for GGRF funds. Before a court hearing could take place, however, EPA Administrator Zeldin announced Tuesday that he was terminating the grant agreements altogether.
“The well-documented incidents of misconduct, conflicts of interest and potential fraud raise significant concerns and pose unacceptable risk,” Zeldin said in a video statement. “I have taken action to terminate these grants riddled with self-dealing and wasteful spending.”
The recipient groups deny Zeldin’s charge and say he has produced no evidence of fraud or waste in the GGRF programs.
“These claims are baseless and undermine a critical effort to drive American energy independence, local resilience, and job creation in communities,” Opportunity Finance said in its statement.
At a Capitol Hill press event on Wednesday, Rhode Island Democratic Senator Sheldon Whitehouse accused Zeldin of “going full gaslight” on the American public. Whitehouse, the ranking Democratic member of the Senate committee that oversees the EPA, characterized the Trump administration’s actions as “gangster government.”
“Without a shred of evidence, Administrator Zeldin is escalating his unfounded attempts to unilaterally terminate congressionally authorized and contractually obligated funding,” Whitehouse said. “This is not how the Constitution, the appropriations process or contract law works.”
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
