Economic Impacts of the Green New Deal for Cities Act

By Matt Mazewski and Adewale Maye

The Inflation Reduction Act of 2022 constituted a major milestone in the federal government’s response to the climate crisis, authorizing around $400 billion for a wide variety of programs to bolster domestic clean energy production, encourage adoption of zero-emission vehicles, promote energy efficiency, and otherwise reduce greenhouse gas emissions. In addition, the law leverages hundreds of billions more through tax credits and incentives, loan guarantees, and public-private or intergovernmental partnerships to advance these same objectives.

Yet despite the fact that the IRA represents the biggest climate-related investment in U.S. history, the scale of the environmental crisis and the threats that it poses to the health, safety, and livelihoods of American communities demand that policymakers go even further in taking action to transition from the use of fossil fuels and toward sustainable and renewable energy sources. As progressives look toward new policy proposals that can serve to rally popular support for even bolder climate action, one measure that deserves a fresh look is the Green New Deal for Cities Act.

In this memo, we employ the Data for Progress Jobs Model to provide projections of the impact that an updated Green New Deal for Cities Act would have on economic output and employment across the country. Assuming that a new iteration of the bill were introduced that featured the same funding authorizations and allocation mechanisms as the original House version from 2021 (H.R. 2644), and that its spending provisions were to take effect in Fiscal Year 2024, we estimate that a Green New Deal for Cities Act would be responsible for an average of around 1.9 million jobs created or preserved over the period 2024 to 2027, and would contribute around $1.2 trillion to U.S. GDP over the same.