Financing Tools for an Equitable Transition to a Clean Economy

This briefing by RMI proposes the creation of a Clean Transition Financing Program via the Department of Energy’s Loan Programs Office (LPO) to mitigate the financial burdens on ratepayers and frontline energy communities during the United States' transition to a clean economy.

• To meet the United States' NDC target of reducing emissions by 50–52 percent below 2005 levels by 2030, the country must accelerate the retirement or low-carbon transition of long-lived fossil fuel assets across sectors including electricity generation, industrial equipment, buildings, and vehicles.
• Regulated electric utilities in the US hold nearly $160 billion in fossil generation assets. RMI estimates that transitioning these assets could leave customers paying $20 billion to $25 billion in annual capital costs for retired or repurposed plants.
• Ratepayer-backed bond securitization is a tool that can replace utility capital with low-cost debt to potentially halve ongoing fossil capital costs, but it currently requires state-level policy changes and has only been authorized in nine states with significant fossil capacity.
• RMI proposes amending Title XVII of the Energy Policy Act of 2005 to establish a Clean Transition Financing Program under the LPO. This program would use tools such as low-cost direct loans, outcome-based impact bonds, environmental risk insurance, and financing for repurposing transportation infrastructure.
• A federal credit subsidy appropriation of $3 billion to $4 billion for the proposed Clean Transition Financing Program could save electricity ratepayers over $10 billion annually in costs related to the accelerated transition of utility generation assets.

APA

RMI (2021). Financing Tools for an Equitable Transition to a Clean Economy. https://rmi.org/resources/financing-tools-for-an-equitable-transition-to-a-clean-economy/

Chicago

RMI. Financing Tools for an Equitable Transition to a Clean Economy. 2021. https://rmi.org/resources/financing-tools-for-an-equitable-transition-to-a-clean-economy/.

Wikipedia

{{cite report |author=RMI |title=Financing Tools for an Equitable Transition to a Clean Economy |date=5 July 2021 |url=https://rmi.org/resources/financing-tools-for-an-equitable-transition-to-a-clean-economy/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2021financing, author = {{RMI}}, title = {{Financing Tools for an Equitable Transition to a Clean Economy}}, institution = {RMI}, year = {2021}, month = jul, url = {https://rmi.org/resources/financing-tools-for-an-equitable-transition-to-a-clean-economy/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }