Green public-service banks offer the potential for local control over public financing. Rather than conventional financing that disembeds capital from particular communities, non-profit public-service banks can provide loans to support community-based renewable energy developments and related enterprises.
Local banks can be legally obliged to provide inexpensive and accessible credit to cooperatives and other projects based on their localities. Such financing mechanisms can spur a multiplier effect, allowing financing to circulate locally and regionally.
Possibly. Displacement of traditional, profit-maximizing finance is a necessary but not sufficient condition for democratic participation in the green transition.
Risk & Drawbacks?
Financial institutions can be opaque, and models for true popular community participation or governance are rare, especially given the tendency to assume “independence” from representative political bodies is a necessary component of responsible institutional behavior.
Now viewed as a leading model in the clean energy finance and green bank movement in the US, the Connecticut Green Bank was established by the Connecticut General Assembly in 2011. As the nation’s first full-scale green bank, the bank leverages public and private funds to scale-up renewable energy development and energy efficiency projects while creating jobs across Connecticut.