State and local governments can benefit from the billions of dollars appropriated for climate investments with the Inflation Reduction Act of 2022 (IRA). Signed into law by President Biden on August 16, 2022, the IRA stands to be the “single largest investment in climate and energy in American history.” Over the next 10 years, the IRA will invest $369 billion in energy security and climate change programs. While the majority of the IRA’s climate-related funding comes in the form of tax credits and financing for business and individuals, approximately $37 billion is provided as grant funding for which state and local governments are eligible to apply.
A Unique Opportunity
The IRA programs offer valuable assistance to state, local, and tribal governments for improving communities in several different areas, ranging from environmental to workforce development. Direct assistance is available for projects such as reconnecting neighborhoods divided by highways, reducing air pollution in low-income communities, and buying zero-emission vehicles.
Knowing what different grants are available and what agencies are administering them are the first steps in securing some of this funding for your community. The following table provides a high-level overview of grant funds available to state and local governments through the IRA. While this is not an exhaustive list of funding opportunities, it is a good place to begin your research.
Available Grant Funds for State & Local Governments
| Fund (IRA Section) | Amount | Description | Administrating Agency |
|---|---|---|---|
| GHG Air Pollution Plans & Implementation Grants (§60114) | $5B | Offers assistance for planning ($250 million) and implementing ($4.75 billion) projects to reduce greenhouse gas (GHG) pollution | EPA |
| GHG Reduction Fund (§60103) | $27B | Funds projects, activities, and technology to assist communities to reduce/avoid GHG and air pollution; $15 billion earmarked for low-income and disadvantaged communities | EPA |
| Environmental & Climate Justice Block Grants (§60201) | $3B | Offers financial and technical assistance to address clean air and climate pollution in disadvantaged communities | EPA |
| Air Pollution Monitoring & Screening (§60105) | $280M | Funds expanding and modernizing monitoring efforts, testing for harmful emissions, research and development, and technical assistance to address air pollution | EPA |
| Grants to Reduce Air Pollution at Ports (§60102) | $3B | Funds the installation of zero-emissions port equipment and technology and the development of climate action plans to reduce air pollutants at ports | EPA |
| Neighborhood Access & Equity Grant Program (§60501) | $3B | Funds efforts to reconnect communities divided by transportation infrastructure barriers, reduce impacts of transportation and construction projects on underserved communities, and support equitable transportation planning | DOT |
| Environmental Product Declarations Assistance (§60112) | $250M | Funds support businesses developing and verifying “environmental product declarations” of construction materials | EPA |
| Assistance for Latest & Zero Building Energy Code Adoption (§50131) | $1B | Funds efforts to adopt the latest building energy or zero-energy codes for residential and commercial buildings and to implement plans to achieve full compliance | DOE |
| Urban & Community Forestry Assistance Program (§23003) | $1.5B | Funds tree-planting projects that prioritize underserved populations and areas | Forest Service |
| Investing in Coastal Communities & Climate Resilience (§40001) | $2.6B | Funds support coastal community preparation for extreme weather and restoring, protecting, and sustaining coastal and marine resources | NOAA |
| Clean Heavy-Duty Vehicles (§60101) | $1B | Funds the replacement of dirty medium and heavy-duty vehicles with zero-emitting vehicles | EPA |
| Home Energy Efficiency Contractor Training (§50123) | $200M | Funds offered to reduce the cost of the training, testing, and certification of contractors to make energy efficiency and electrification improvements | DOE |
More Details to Come
Information on most of the programs listed above has not been released yet since most of the agencies tasked with administering funds are still standing up their programs. Watch for more details in our February FORsights™ article, “Part 2: Uncovering Public Sector Grant Funds in the Inflation Reduction Act.”
In the meantime, state and local government entities shouldn’t wait to start planning for the funds they intend to pursue. Now is the time to begin your research to identify what requirements you will need to meet and start the process to set up programs and policies for using the funds.
FORVIS Can Help
By having a plan in place, state and local governments can be ready to apply for funds as soon as they are available, increasing their chances of award. Our Grants Management practice at FORVIS has extensive experience with grants and helping clients navigate the grant life cycle. If you have questions or need assistance, please reach out to our National Grants Management Team or submit the Contact Us form below.