OPINION: NM leaders defended clean energy from DOGE budget cuts

This month, the Trump administration announced it had abruptly terminated $20 billion in funding for the nation’s green banks — nonprofit financial organizations designed to make clean energy more affordable. This decision could have serious consequences for New Mexico, where a newly established green bank is actively providing low-interest loans for energy efficiency and rooftop solar projects targeting low- and middle-income households as well as small businesses and nonprofits. Our state’s green bank also works with the private sector to support community solar initiatives and clean energy innovations like geothermal energy.

Thankfully, Gov. Michelle Lujan Grisham and New Mexico’s state legislators have just approved a $10 million investment for the New Mexico Climate Investment Center (NMCIC) through House Bill 2, securing the future of the state’s green bank. This proactive commitment defends the NMCIC from federal setbacks, enabling it to begin making crucial clean energy investments in 2025.

The stakes for New Mexico are high. Cutting congressionally approved and already allocated funding for green banks would mean families lose crucial access to energy cost-saving programs, leaving less income available for essential needs like food and childcare. Municipalities would lose vital support for energy-efficiency upgrades, negatively impacting their budgets. Critically, our state would lose opportunities to apply its extensive oil and gas expertise toward geothermal energy — a promising new energy frontier. And we would forfeit funding for local resilience projects that help mitigate wildfire risks and miss out on opportunities to train workers for good-paying clean-energy jobs.

In 2022, a coalition of business, government and nonprofit leaders launched the NMCIC. Unlike traditional banks, the state’s green bank doesn’t take deposits; instead, it leverages modest public funding to attract substantial private investment. This strategy accelerates the adoption of clean technologies, significantly reducing costs for residents. Operating as an independent organization, the NMCIC combines a nonprofit mission with the agility of a private enterprise, offering financing rather than grants. As loans are repaid, capital is reinvested into new projects that further goals of clean air, clean water and affordability.

National research shows green banks attract roughly $7 in private lending for every dollar of federal investment, potentially unlocking up to $150 billion nationwide to reduce carbon emissions and lower energy bills.

Green banks are especially appealing from a business and free-market perspective because they use limited government funds strategically to stimulate significant private-sector growth. By mobilizing private capital and fostering market-driven solutions, the NMCIC helps reduce barriers to innovation and competitiveness, creating a stronger business environments across New Mexico. Supporting this initiative enhances market efficiency, encourages private-sector participation in new energy solutions, and demonstrates a responsible and cost-effective approach to innovation for the public good.

With electricity rates rising and recession risks looming, federal cuts to green banks could not come at a worse time. Rising carbon emissions and climate-related disasters — such as wildfires — demand immediate action. Washington officials should recognize that green banks directly support the objectives they publicly endorse — a strong, independent, globally competitive U.S. economy and the promotion of healthy food, water and communities. Leveraging modest public investments to attract significant private capital for improving Americans’ quality of life should be celebrated as the very essence of “government efficiency.” Lujan Grisham and New Mexico legislators clearly do.