Key Questions for Local Govts Pursuing Inflation Reduction Act Funds

The Inflation Reduction Action (IRA) – the largest US federal investment in climate solutions – offers billions for sustainable projects and green jobs. Since 2022, states and cities have pursued IRA funding for initiatives that contribute to environmental and social equity.

For over two decades, the CDP has partnered with cities and companies to promote environmental action and resilience through disclosure.

The IRA can drive social equity, providing economic and health benefits for marginalized communities impacted by climate change. This demands collaboration between local government leaders, investors, private sector businesses, and community development finance institutions.

1. How are you tracking and communicating potential projects in your city to achieve your climate action and resilience goals?

CDP supports financial institutions and potential project partners by identifying investable projects. Its project mapping and annual disclosure can guide investment opportunities and showcase local progress in IRA-related grants. To learn more, see how CDP resources can be leveraged for IRA implementation.

2. How is your city aligning your economic development and procurement teams with these projects seeking financing?

Energy Research & Social Science published findings showing that combined public and private decarbonization efforts are more effective. Thousands of companies are keen to exploit local and state policies and incentives. CDP’s Business Scan helps local governments identify businesses for collaborative climate action. An example of successful implementation is seen in the City of Dallas‘s Business Climate Leadership group.

3. How are you ensuring that projects not only achieve your local government’s climate goals, but also align with racial and social equity goals?

Investors now prioritize projects that measure social and racial equity outcomes. The Justice 40 initiative also requires that 40 percent of federal climate and other investments benefit disadvantaged communities. CDP has developed a racial and social equity toolkit and an overview of financial instruments for local governments to help them prepare their projects.