In recent years, public sentiment on climate change has made a dramatic shift. The debate has moved from whether climate change is real to determining what changes in federal policy, economic activity, and behavior can significantly reduce greenhouse gas emissions.

It is becoming increasingly clear that poor communities will experience the brunt of disruption caused by a warmer planet. Low-income communities tend to be less resilient in their ability to deal with changes in the weather, significant increases in the prices of energy and utilities, and broader shifts in the economy. Residents and businesses generally lack the capital and technical support necessary  to invest in energy-efficiency measures and other innovations. Many poor communities already experience severe local environmental degradation from resource extraction and energy-intensive farming and industrial practices.Now, they face additional uncertainty and upheaval as those enterprises grapple with new requirements to curb greenhouse gas emissions.

Community development financial institutions (CDFIs) have a special role to play in advancing solutions to climate change that also create local jobs and enhance local environmental quality. Many emerging sectors—including sustainable forestry, energy efficiency, clean energy production, and local food systems—can provide local jobs, improve local water and air quality, and can reduce or lock up dangerous greenhouse gases. Capital, technical assistance, and local market knowledge—the assets that CDFIs bring to the table, and the things that they do best— are important elements in making these businesses work. Federal climate change policy can help CDFIs create and strengthen environmentally responsible businesses and local enterprises.
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The natural resources these businesses depend on provide key sources of sustenance and economic activity—like forests and timber, clean water and recreation, healthy soils and local food systems. When these resources are healthy, they also provide important natural “sinks” that hold carbon and clean pollutants from the environment. When used sustainably, our natural resources provide critical forms of natural and economic capital that generate wealth and improve the quality of life. They form an important base on which sustainable livelihoods can be built.

This is an excerpt from The NEXT American Opportunity. The full text can be downloaded as an Adobe PDF Document.