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Showcasing local demand for funding and financing through the Inflation Reduction Act
Note: this snapshot is a supplement to the 2023 Global Infrastructure Snapshot which was delivered in partnership with the Global Covenant of Mayors at COP28. It reflects data disclosed by local governments in 2023 through CDP-ICLEI Track. Underlying data is available on our Open Data Portal and is governed by CDP’s Terms of Use.
Through the Inflation Reduction Act (IRA), local and state governments have a once-in-a-generation opportunity to act on their climate goals.
In response to the rapid emergence of new funding and financing mechanisms, technical assistance providers and financial institutions are seeking insight into pending climate projects, and exploring how federal dollars can benefit people and planet.
CDP’s annual disclosure process for local and state governments has led to the creation of a compendium of projects that is updating and expanding every year. Through a standardized and comparable questionnaire, cities, states and public authorities disclose their climate finance needs, alongside details on the local impacts of climate change and their current adaptation and mitigation actions.
In 2023, 160+ US cities and six US states – representing over 25% of the US population – reported climate risks, climate action plans and projects at all stages of development. Data reported by governments through CDP questionnaires is an invaluable resource to guide investment in clean energy, transportation, buildings and natural infrastructure.
This snapshot demonstrates the kinds of projects that US cities are seeking to advance for climate action and key areas for public and private investment. It seeks to highlight regional needs and disparities, and the potential for project aggregation. Ultimately, CDP’s US City Climate Project Pipeline is a tool to connect projects for further project preparation support under the Inflation Reduction Act and create opportunities for green job creation while achieving local environmental justice goals.
Key takeaways
Demand for climate finance in cities is increasing year-on-year. Through CDP-ICLEI Track in 2023, 130 US cities reported 436 projects seeking US$27.5 billion in investment – a more than 30% increase since 2021.
- In 2023, buildings & energy efficiency was the leading sector reported in the US with a total of 121 projects valued at US$4.7 billion; transport was the second largest (88 projects valued at US$12.9 billion), followed by renewable energy (61 projects valued at US$696 million).
- 47% of reported projects by US local governments were in the early stages of development, underscoring the importance of technical assistance and capacity building for project preparation, financing and implementation.
- Over 20% of projects were small-scale (< US$500,000), but over 80% were disclosed by a small and medium-size cities (< 500,000 inhabitants) demonstrating a need to mainstream financial aggregation strategies and instruments.
Hover over the map to see a state-by-state breakdown of cities’ projects:
One of the largest programs under the Inflation Reduction Act is the United States Environmental Protection Agency (US EPA) implementation of the US$27 billion Greenhouse Gas Reduction Fund (GGRF). The GGRF explicitly prioritizes energy generation and storage, building decarbonization and transportation, which are all leading sources of emissions. City and local governments are key partners in achieving the full potential of Greenhouse Gas Reduction Funds on the ground.
In 2023, cities disclosed 270 projects across there priority sectors, including:
- 121 projects in buildings and energy efficiency from 80 cities valued at US$4.7 billion;
- 88 projects in transport from 60 cities valued at US$12.9 billion; and
- 61 projects in renewable energy from 47 cities valued at US$696 million.
Collectively, these 270 projects reported a need for US$18.3 billion in financing and funding in buildings, transportation and renewable energy. As the Greenhouse Gas Reduction Fund programs are fully implemented, the City Climate Project Pipeline and disclosure through CDP-ICLEI Track can serve as an indispensable guide for where and how to best leverage investments.
CDP data also highlights significant demand for climate finance beyond buildings, energy and transport.
In 2023, US cities reported:
- 43 projects in water management from 33 cities;
- 25 projects in waste management from 22 cities; and
- 45 projects in sectors related to nature, land use and green space from 30 cities.
These projects are necessary components of ambitious climate action and often deliver co-benefits for environmental justice and biodiversity. It is essential that these projects are considered across IRA programs, not only those explicitly for adaptation.
The Austin Transit Partnership, a local government corporation created pursuant to a successful voter initiative, is working in collaboration with the City of Austin and CapMetro to expand and improve Austin’s public transportation network, including the city’s first light rail network, enhanced MetroRapid and local bus service, and an all-electric fleet. Named “Project Connect”, this multi-billion-dollar investment is expected to create co-benefits for public health, education, employment, and climate resilience and equity.
The City of Miami is seeking funding to expand an ongoing program that provides funding to low- and middle-income homeowners to retrofit their homes. The program provides qualifying homeowners with up to $70,000 for retrofits that harden homes against extreme weather events and support energy efficiency. The program is currently oversubscribed.
The City of Baltimore is seeking funding for its Community Resiliency Hub Program. Community Resiliency Hub partners are designated sites owned and operated by service-based non-profits that provide essential resources during times of crisis and emergency – particularly during natural hazard events. The City is seeking funding to enable Resiliency Hub partners to expand their community service capacity during emergency events, including receiving energy efficiency upgrades to their building, high quality emergency preparedness and response supplies/equipment, back-up power, enhanced digital connectivity and operational support.
The Village of Hastings-on-Hudson is seeking to replace up to 26 miles of aging storm sewers. The municipality estimates that the project will cost approximately US$1 million per mile of sewer. The municipality has begun the process of mapping existing stormwater infrastructure and identifying relevant grants.
The County of Santa Fe will receive $3.3 million to build an EV charging network of 33 fast chargers and Level 2 charging stations at 13 sites encompassing underserved communities, multi-family affordable housing and county transportation hubs.
How CDP can help bridge the project funding gap
Given the scale of investment needed to reach climate and development goals, urgent and robust action is required from cities, states, financial institutions and the federal government.
As the global platform for standardized and comparable climate data, CDP plays a central role in connecting stakeholders and accelerating the implementation of subnational climate action. Beyond project data, CDP drives investment by providing information on jurisdictions’ social, political and economic environment, allowing stakeholders to place projects into the local context and assess a jurisdiction’s ability to receive and implement funding.
CDP encourages all local and state governments to measure and highlight projects seeking financing by disclosing and to learn more at CDP Matchmaker. Financial institutions are encouraged to support local government disclosure through CDP’s Capital Market Signatories program and Municipal Disclosure campaign. For a full list of all global and US projects seeking financing, please visit the Open Data Portal.
To learn more, please contact [email protected].
