Today, the first-ever California Landscape of Climate Finance was released. This new assessment was produced by Climate Policy Initiative in partnership with the California Strategic Growth Council and the California Infrastructure and Economic Development Bank.
“While California has invested historic resources to meet the climate crisis, we need partners in this fight. That means help from the private sector in California, the fifth largest economy in the world. Investment in climate action is not just good for our communities, it’s good for business too.”California Governor Gavin Newsom
California’s 2024-2025 Budget proposes $48.3 billion over seven years and delivers on California’s Climate Commitment – a bold climate agenda that fully integrates climate solutions with equity and economic opportunity. With critical investments in health, education, and jobs, California’s climate agenda is simultaneously confronting the crisis while building a more resilient, just, and equitable future for all Californians.
The California Landscape of Climate Finance highlights the substantial progress California has made in increasing climate finance to achieve these goals, with a 26% annual growth rate from 2019 to 2022. Given relatively tight state budgets, however, it is imperative that California now focus on using its public dollars to catalyze private and federal investment, including through pre-development and matching funding, reducing regulatory barriers, and prioritizing investment in the communities most vulnerable to climate change.
“This first-of-its kind analysis of climate finance in California reveals important information about progress to date and the scale of the challenge ahead,” said Bella Tonkonogy, US Director at Climate Policy Initiative. “To meet California’s goals of becoming net zero by 2045 and responding to the increasing impacts of climate change, California will need investment of more than $60 billion dollars annually. CPI’s analysis shows that annual investment levels are at $39 billion. Mobilizing the private sector and leveraging federal dollars are critical to closing that gap. Especially in light of budget constraints, California will need to strategically deploy public funds—state and federal—in ways that scale up private sector investment from its current levels.”
“The California Landscape of Climate Finance will be an important tool for those working to ensure California meets its climate goals. As we prepare to bring together over 300 experts and practitioners this week for the 2024 SGC Catalyst Conference, the report highlights the crucial importance of working across the public and private sectors to deliver equitable climate results,” said Lynn von-Koch Liebert, Executive Director of the California Strategic Growth Council. “Through the Transformative Climate Communities and Affordable Housing Sustainable Communities Programs, SGC has demonstrated how State dollars can effectively and equitably leverage private finance, and we are excited to see solutions like these taken to scale.”
“The Milken Institute is pleased to support the efforts of Climate Policy Initiative in building the critical data tracking toolset that can help accelerate decarbonization markets and innovative public-private partnerships and partner with the Strategic Growth Council’s 2nd annual Catalyst event to ensure that climate equity and clean economy benefits are front and center outcomes as these markets grow,” said Senior Director Dan Carol and Senior Advisor Matt Horton.
“CPI’s innovative research demonstrates the real progress California has made mobilizing finance, both public and private, for climate solutions. But we must do more,” said IBank Executive Director Scott Wu. “In the critical decade ahead, we must leverage and incentivize even greater amounts of private capital for every dollar spent in order to keep our world-leading climate goals in sight.”
Efforts to expand the reach and impact of California’s public climate investments are well underway. The 2024 SGC Catalyst Conference, hosted in partnership with the Milken Institute, will bring together frontline leaders, researchers, funders, the private sector and government partners to identify cross-sectoral and collaborative solutions to address the state’s climate finance gap. Sessions will reflect both the urgency to make place-based investments that center and support disinvested communities and the speed at which federal and state funds are being deployed. The plenary sessions will be livestreamed.
The California Landscape of Climate Finance aims to fill a gap in comprehensive data on climate finance and climate investment needs in the state. This analysis will help policymakers and private sector actors identify opportunities, establish priorities, measure progress, and develop coordinated plans to meet the scale of the climate challenge, including for budgets, regulations, tapping into federal funding, and investment plans.
The full California Landscape on Climate Finance report is available online.