Hot Off the Press! How We Can Fund Climate Action in Minneapolis

With only blunt and uncertain clean energy financing tools at the federal and state level… How can we quickly and justly resource Climate Action in Minneapolis? For the last decade, Community Power has been exploring this question with many partners across Minneapolis, the state, and the country.

We are pleased to announce that a newly released report outlines innovative funding mechanisms that could dramatically accelerate the city's transition to clean energy which comes at a time as Minneapolis approaches a critical juncture in its fight against climate change. The report, created by the Institute for Market Transformation exploring these very questions titled "Equitable Funding Mechanisms for Climate Action in Minneapolis," comes at a pivotal moment as the city renegotiates its franchise agreements with Xcel Energy and CenterPoint Energy.

 

 

See the full 50-page Report: "Equitable Funding Mechanisms for Climate Action in Minneapolis"

Want just the highlights? Check out the See the 4-page Fact Sheet

It's a deep dive into two specific, hyper-local mechanisms to fund just, climate action based on a "Polluter Pays" model.

IMT's report, developed in partnership with the Just Transition Fund Coalition, proposes leveraging two existing tools - to generate over $110 million annually for climate initiatives. 

These include:

1) Utility Franchise Fees and 

2) The "Pollution Control Annual Registration" Fee (PCAR)

This funding could help close the vast gap between current climate spending and the estimated $136 million needed each year to weatherize and electrify Minneapolis homes.

By tying fees to the carbon intensity of energy sources, the city could incentivize a rapid transition to renewables while generating substantial funding for climate programs. Similarly, expanding PCAR to cover greenhouse gas emissions could hold large polluters accountable while supporting emissions reduction efforts.

Please dig in, tell your friends, and share!

"Despite the mounting evidence of disparities, funding to address climate change remains insufficient across all scales of government. [...] While the Mayor's 2024 budget proposal significantly accelerated the City's investments in weatherization to $4,744,725, the gap between funding available and the estimated $136.5 million/year needed remains vast. [...] In the context of underfunding, urgent timelines, deeply entrenched racialized inequity, and public incentive apparatuses that often frustrate their purpose, Franchise Fees (FF) and Pollution Control Annual Registration (PCAR) present innovative opportunities for addressing the climate challenge swiftly and in ways that are specific to local context and needs."

- IMT Report: Equitable Funding Mechanisms for Climate Action in Minneapolis, 2024

Artwork and design by IMT along with images from Ntxoo Art

Artwork and design by IMT along with images from Ntxoo Art

 

Critically, the report emphasizes that any new fee structure must be designed with equity at the forefront. Recommendations include exemptions or discounts for low-income households, phased implementation, and prioritizing investments in historically marginalized communities. At least 40% of funds should be directed to areas like the city's designated Green Zones. 

The IMT report provides a detailed roadmap for implementing such a system, while addressing concerns about impacts on vulnerable residents. It suggests strategies like targeted exemptions, gradual phase-ins, and prioritizing investments in frontline communities to ensure an equitable transition.

"The climate crisis demands urgent and equitable action at a scale far beyond what we have accomplished or envisioned so far," the IMT report concludes. "Incrementalism for a problem that multiplies every year it is prolonged is both unaffordable and irresponsible; the time for bold action was 40 years ago. The next best time is now."


Take Action! Donate Attend an Upcoming Event