California as a Justice 40 Leader: The Transformative Potential of Place-Based, Community-Led Investment

Lynn von Koch-Liebert, Executive Director, California Strategic Growth Council

Matt Horton, Director, Milken Institute

With $1.6 trillion in funding for our country to meet the climate crisis head-on, California has an unprecedented opportunity to build a safer, more sustainable future for all communities. California’s historic $54 billion multi-year Climate Commitment is further bolstered by $400 billion in energy security and climate investments under President Biden’s landmark Inflation Reduction Act, as well as $1.2 trillion in new funding from the Infrastructure Investment and Jobs Act.

We must move swiftly and smartly to put these dollars to work into strategies and solutions that make an immediate impact where we need it most. To this end, ensuring available resources are deployed in an equitable way, expanding opportunities for transformative change in communities that too often have been left behind is of critical importance.

Decades of disinvestment have left some communities, predominantly those of color, with high pollution burden, climate vulnerability, and weakened civic infrastructure. Recovery following the great recession has been uneven and the COVID-19 pandemic further exposed critical social and economic weaknesses and inequities throughout the United States. Over the last few years California has experienced unprecedented climate impacts, with these same communities hit first and worst. It is increasingly clear that inequities and climate impacts are linked, a reality that requires everyone to be at the table.

Through the state’s Cap-and-Trade system, California has put billions of dollars to work in innovative projects across California, with $5.4 billion — almost half of all these California Climate Investments — provided to disadvantaged and low-income communities and households.

Accounting for this historic inequity, the Biden/Harris Administration’s Justice 40 Initiative has set a goal that 40 percent of certain federal investments flow to disadvantaged communities. One challenge in implementing this vision is that deploying funds leans on existing public systems and private capital models in place, meaning the capacity to absorb these funds may work well for some communities, but less so for communities without the capacity in place to develop and absorb funding.

So, what do we do?

The Strategic Growth Council’s (SGC) bottom-up investments challenge longstanding top-down approaches to community development and may help answer key question regarding the equitable investment of climate infrastructure funding committed through the Federal Justice 40 Initiative: how should discretionary money directed to states be spent, in which communities, towards what outcomes- and defined by whom?

There are key elements of SGC’s grant programs that have resulted in over $2 billion place-based, community-led investments that can be deployed nation-wide. These include:

· A collaborative governance structure to ensure community oversight of investment;

· Meaningful and flexible grants to ensure community priorities are funded;

· Bolstering advocacy of key community priorities through research partnerships; and

· Capacity building to ensure communities have access to resources and can meaningfully participate in the public process.

Identifying communities and getting them ready for investment are first — and vital steps- in the implementation of climate infrastructure funds.

SGC’s community readiness models are proving to build community-wide resilience, ensure harm in communities is reversed and health outcomes are improved, and catalyze private investment to deepen investment in the communities that need it most. Excitingly, these models are proliferating across other funding programs too.

A critical step is to standardize and scale these types of approaches as federal and state grant funding is being programmed over the next year. Part of this is defining what comprises a more contemporary community development framework — one that accounts for dual climate and equity priorities in preparing communities for investment. Additionally, public dollars can only go so far, making efforts to unlock and streamline financing for infrastructure projects through increased capital coordination, as well as establishing climate equity standards for financing projects key next steps. Lastly, by aligning incentives for place-based investments on a regional basis, finance support can be bundled for projects across jurisdictional bounds, bringing infrastructure up to grade in communities where infrastructure improvements have been long-sought.

With a fast-closing window for programming funds to deliver equitable outcomes, Strategic Growth Council, in partnership with the Milken Institute, will convene leaders from the community, government, academia and private and philanthropic sectors to discuss how to achieve broader adoption of these approaches and identify critical next steps during the Catalyst Conference February 1–2, 2023. SGC’s Catalyst Conference will feature panels, peer-to-peer conversations, and workshops covering “Getting to Project Readiness Through Tested Community Models” and “Catalyzing Project Implementation Through Public-Private Finance”. The purpose of the conference is to increase adoption of models within public and private funding frameworks and identify critical policy levers to ensure effective and equitable implementation of Justice 40 and California’s climate funding.

Over the coming months, SGC and Milken Institute will bring together leaders from diverse backgrounds and with a variety of perspectives, across California as part of a steering committee to thoughtfully design the process and the deliverables of the Catalyst Conference.

Amber Pairis, Climate Science Alliance

Christian Torres, Comite Civico del Valle

Colleen Callahan, UCLA Luskin Center for Innovation

Emi Wang, Greenlining Institute

Erica Manuel, Institute for Local Government

Felipe Escobar, Pacoima Beautiful

Heather Vaikona, Lift to Rise

James Corless, Sacramento Area Council of Governments

Judi Larsen, The California Endowment

Karthik Ramakrishnan and Louise Bedsworth, California100

Monica Guerra, National Community Renaissance

Randall Winston and Christina Angelides, Elemental Excelerator

Ron Milam, Smart Growth California, The Funders Network

Eddie Hartman, Simon-Kucher & Partners

For more information about the Catalyst Conference, read SGC’s press release or visit SGCCatalyst.org

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California Strategic Growth Council (SGC)

SGC coordinates and works collaboratively with public agencies, communities, and stakeholders to support healthy, thriving, and resilient communities for all.