One year after the United States introduced the Inflation Reduction Act, we explore how cities are using finance unlocked by this key legislation to phase out fossil fuels and transition to more sustainable and equitable economies.

This week marks the first anniversary of when the President of the United States, Joe Biden, signed the Inflation Reduction Act into law – a remarkable investment by the US Federal Government to direct funding to sustainable infrastructure projects across the United States. The Inflation Reduction Act was the single most significant investment in climate and energy in US history, and it came on the heels of the Bipartisan Infrastructure Bill and the American Rescue Plan Act. Together, these bills create an unprecedented opportunity for the US to further its climate ambition and contribute to phasing out fossil fuels.

As funding has begun to reach local projects, its cities are leading the way in delivering transformative sustainable projects made possible by the Inflation Reduction Act and Bipartisan Infrastructure Law. Cities are uniquely equipped to enact policies and build partnerships with communities and businesses to deliver local climate action. They are the innovative first movers, and in states that have failed to act, they are critical to reducing emissions and addressing climate breakdown.

Notably, cities are taking action to ensure that the funding incorporates the goals of creating a new green economy, which delivers well-paid green jobs in construction and includes historically marginalised communities in a more sustainable and equitable future. They are leading in retrofitting homes and buildings, installing rooftop solar, electrifying transit and personal vehicles, and adopting smart land-use policies.

The city of Philadelphia recognised that the boom in funding for sustainable infrastructure projects means a surge in demand for workers trained in green skills who can bring the projects to life. This demand spans various fields, ranging from architects and engineers to electricians and solid waste collectors. The projects brought to life by the Bipartisan Infrastructure Law and the Inflation Reduction Act are shaping a greener future and fostering a thriving community where residents are empowered to excel within the city’s emerging green economy.

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In Chicago, the city is launching a programme to decarbonise residential buildings and boost local expertise in installing energy-efficient cooling/heating systems. The initiative also aims to create opportunities in both the clean energy sector and in business ownership, specifically for Black communities, Indigenous people, and People of Colour. The programme focuses on ensuring fairness and inclusivity; low- and moderate-income homeowners will receive upgrades such as state-of-the-art insulation and heat pump heating/cooling systems, helping ensure affordable access to clean energy while reducing emissions.

Meanwhile, New Orleans is taking a proactive approach to shaping a sustainable and equitable future. Teaming up with the Deep South Center for Environmental Justice, the city is working to create an inclusive and healthy urban landscape. To ensure alignment with the Paris Agreement goals, the city convened an Advisory Group for the Climate Action Equity Project, comprising a diverse assembly of New Orleans residents and experts in energy, transportation, waste reduction, and workforce development. This collaborative effort aims to ensure equity in the city’s climate strategy implementation. With funding from the US Environmental Protection Agency, the Deep South Center for Environmental Justice will also partner with the city to establish technical assistance centres, facilitating capacity-building in navigating federal grant applications, community engagement, and language accessibility.

Thanks to the Inflation Reduction Act and Bipartisan Infrastructure Bill funding, mayors are accelerating and scaling up the roll-out of transformative strategies like these. Cities are showing the highest level of ambition and taking urgent action to phase out fossil fuels and transition to more sustainable and equitable economies.

In 2022, C40 and Climate Mayors published a guidebook – supported by Bloomberg Philanthropies – that advises US mayors and city staff on the opportunities for local governments, organisations and businesses to implement the Inflation Reduction Act and address climate breakdown.

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