The U.S. Treasury Department would be authorized to float up to $1 billion of bonds exempt from state and local taxes to fund climate resiliency projects under a measure introduced Wednesday by Sen. Dick Durbin, D-Ill.
The bill would allow Treasury to issue “climate bonds” for purchase by “any American” to finance projects undertaken by cities, states, transit agencies, nonprofits and other groups that address the challenges of climate change.
Treasury would be authorized to issue $200 million to start, climbing to $1 billion if demand is high. The debt would not be exempt from federal tax, according to a Durbin spokesperson.
“The legislation would mirror the national war bond program during World War II to rally the nation around efforts to prepare for the deeply harmful impacts of climate change,” Durbin, the Senate’s second highest ranking Democrat, said in a press release. The measure would fund “resiliency projects in front-line and environmental justice communities that experience disproportionate impacts from this crisis.”
It’s the second go-round for the measure, which Durbin first introduced in 2021. The current bill has been assigned to the Senate Finance Committee.
Under the measure, bond proceeds would be used to create a “Climate Change Resiliency Fund,” overseen by the U.S. Department of Commerce, which will allocate grants to states and cities, utilities, tribes, governmental entities and other groups that are funding climate-related projects.
It would also establish an 11-member commission to select projects, with at least 40% going to environmental justice communities, low-income communities or communities of color. Congress would appropriate $10 million annually for five years to promote the marketing of the bonds.