The Fight Over the Greenhouse Gas Reduction Fund

The $27 billion Greenhouse Gas Reduction Fund has become a focal point of the Trump administration’s efforts to roll back federal clean energy policy. The program was designed to finance clean energy and emissions-reducing projects by channeling public funds through nonprofit financial institutions to attract private investment, including investments that support community resilience.

After taking office in 2025, the administration moved to freeze funding and sought to terminate grant agreements that had already been awarded, citing concerns about oversight, conflicts of interest, and program design. Supporters argue the funds were lawfully appropriated and that the administration is attempting to unwind commitments based on claims that have not been substantiated in court. Roughly $20 billion of that funding now remains in limbo, with projects on hold.

Senator Sheldon Whitehouse of Rhode Island, ranking member of the Senate Environment and Public Works Committee, discusses how the program was designed to work, the administration’s stated rationale for shutting it down, and what the dispute could mean for clean energy investment and congressional authority over federal spending.

Full Transcript

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone. The Trump Administration’s second term has brought a series of challenges to federal clean energy policy. One of the most consequential centers on the Greenhouse Gas Reduction Fund or GGRF. Created by Congress through the Inflation Reduction Act, the GGRF was designed to channel tens of billions of dollars into clean energy projects, particularly in low-income and disadvantaged communities, using public funds to unlock much larger flows of private capital.

After taking office in 2025, the Trump Administration moved to freeze those funds and sought to terminate major grant agreements that had already been awarded, raising concerns about oversight, waste, fraud, and conflicts of interest. Supporters of the GGRF see something very different. They argue the funds were lawfully appropriated and are now being withheld based on claims that haven’t been substantiated in court. The dispute is ongoing and much of the funding remains frozen, including roughly $20 billion that now sits in limbo, leaving projects across the country on hold. A federal appeals court ruling last September allowed the administration to move forward on procedural grounds, but left the broader legal questions unresolved.

My guest today, Senator Sheldon Whitehouse of Rhode Island, has been at the forefront of the congressional response to this dispute. As ranking member of the Senate Environment and Public Works Committee, he has led oversight efforts and framed the issue as both a climate policy fight and a broader test of congressional authority. We’ll discuss what the GGRF was designed to do, why the administration moved to shut it down, and what the outcome could mean for clean energy investment and the federal government’s ability to follow through on its commitments. Senator Whitehouse, welcome to the Penn campus and welcome back to the podcast.

Sen. Sheldon Whitehouse: Good to be back. It’s been two or three years.

Stone: So a very different topic today, the GGRF. So I want to start out by asking you the following. For listeners who may not be familiar with the program, what was the problem that the Greenhouse Gas Reduction Fund was designed to solve? And how was it intended to work in practice, particularly this idea of using public funds to mobilize private capital?

Sen. Whitehouse: The GGRF was designed to be a vehicle for protecting local communities from risks associated with climate change. And that was intended to get to actual, on-the-ground people who are facing these problems in real time.

Stone: So this is implementation of projects, not research funding kind of stuff.

Sen. Whitehouse: Correct. Correct. Things like funding to build a resilience shelter so that when massive storms come through, there’s a place where people can go for safety, electricity, running water, recharge their phones, have a central place where emergency operations can work out of. Something as simple as that.

One of the grim ones was that one of them was flood control for a Native American village up in Alaska. And a big storm came through and the flood control funds had been blocked, and they flooded. And people lost their lives. And I believe the tribe just voted to abandon its ancestral village because it’s irrecoverable at this point. But a thousand people have been taken out of their homes and forced to live in hotels and places.

Stone: So this is private capital that would have mobilized, partially private capital?

Sen. Whitehouse: Public capital would begin, and then part of what made it work was that the applicants had to show that their project would attract some private capital so that there’d be additional leverage.

Stone: So the EPA is capitalizing intermediaries in this process rather than selecting the individual projects?

Sen. Whitehouse: It’s a little bit of both. You can show that it came in. But the way the money flows is through intermediaries. It began with an appropriation by Congress, then the money got obligated by the agency, then the money got distributed to a private commercial bank as the fiscal agent. And in the meantime, they were approving individual grants through that program, some of which went through a second intermediary organization that could do things like manage the paperwork. And that way, a smaller community that didn’t have grant writing and federal engagement specialists, all that kind of stuff, if they could pitch that they needed something, then the umbrella group would say, “Okay, we got this. We’ll handle the paperwork for you. We’ll be your—” Basically like a fiscal agent, dealing with the bank. So it made it easy for smaller groups, smaller communities, individual tribes to participate without having to have a big grant making and grant reporting operation.

Stone: So that was all going to be taken care of through the program, obviously. That administrative portion of it.

Sen. Whitehouse: Yeah.

Stone: Okay. So the current administration, the Trump Administration, has described the GGRF as a kind of scandal, raising concerns about oversight, conflicts of interest and even fraud. When you look at those claims, where do you think they hold up, if at all?

Sen. Whitehouse: None of them hold up. I think to the extent they hold up, they hold up under the Trumpian article of faith that climate change is a hoax. And therefore, any money that’s spent to invest in resilience to protect against climate change is necessarily wasteful and fraudulent.

Stone: So, no problem. So why spend money on it?

Sen. Whitehouse: Exactly. But once you get beyond that, it’s really hard to show that there’s anything resembling fraud. The inspector general took a look at it at one point and didn’t find any problems. You’ve got groups who are at the receiving end like Habitat for Humanity, which is kind of a credible organization.

Part of the problem here — this goes to my U.S. attorney days in the Department of Justice. In order to stop the distribution of the money held by the bank, this little weasel of a U.S. attorney in the District of Columbia called Ed Martin tried to cook up a fake criminal case so that they could go to the bank and say, “While we are pursuing our criminal case, you need to freeze up all the money.”

Stone: That being Citibank, that was holding the funds.

Sen. Whitehouse: Correct. Correct.

Stone: That is holding the funds.

Sen. Whitehouse: Yeah. So the problem with that was they couldn’t articulate any fraud or any crime. So the criminal chief of the U.S. attorney’s office for the District of Columbia ended up sort of quitting, being driven out, because she would not do the fake criminal investigation. Then Ed Martin himself went into court to try to get an order. First of all, it’s very rare for a U.S. attorney to go in person into court. Usually you’d do that through your U.S. attorneys. When you do, you almost always have a career U.S. attorney with you. You might get pulled away for something. You need to have a career person who can handle the case at all times. So anyway, him going in alone was weird. Really weird.

And then the judge threw it out. Didn’t give him the order. You know, you do not go into federal court as a United States attorney and not get the order. If you don’t think you’re going to get it, you go back and do more homework until you’re totally backstopped, triple checked, and good to go. So the fact that a U.S. attorney went into federal court and got shot down was a real flare in the night about the mischief that is going on.

Stone: So these allegations of fraud have not been put up in court?

Sen. Whitehouse: No. In fact, in a civil proceeding, a related civil proceeding, the Department of Justice lawyers said, “No, we’re not asserting any fraud here. We are definitely not asserting any fraud.” So they can’t even keep their own story straight between the fake criminal proceeding that never was allowed to go forward, and the civil proceeding where they had to be under oath and say, “Yeah, no fraud.”

Stone: Fraud allegations aside, the administration also raised concerns about the structure itself, particularly the use of the financial intermediaries and the financial agent, which is Citibank, rather than the treasury, one of the arguments being that we can’t claw back. We can’t control it. There’s not oversight if that happens. Do you see any validity in those concerns?

Sen. Whitehouse: No, because there’s all the oversight in the world. In fact, the last thing Citibank wants is to have a federal government inquiry into whether it has done something wrong with the funds. What Citibank can do is run very good due diligence, get the money out. They can do the blocking and tackling of the grant distribution pretty effortlessly. It’s what they do with their accounts. So that makes a lot of sense.

And then these intermediary groups, we already talked about the purpose for them. The purpose for them is to let smaller groups have a shot at this funding because the intermediary can take on some of the scut work of dealing with the grant apparatus.

Stone: Okay, so all this funding has been appropriated by Congress, as you said. Goes through the EPA and awarded by the EPA. When an administration moves to freeze or terminate funding at the stage that we’re looking at right now, how do you see that in terms of Congress’s authority and the role of the executive branch?

Sen. Whitehouse: In my view, it far exceeds the proper role of the executive branch. This money was appropriated by Congress, obligated by the agency, distributed to the private bank, and dedicated to a perfectly legitimate purpose that Congress had approved. So to go back later and try to undo all that, it’s a little bit like a presidential veto, except that if you go to the Constitution and look at a presidential veto, there’s a time limit on that. You’ve got to do that after the bill has passed. When the time runs, if you haven’t vetoed the bill, then it goes into law automatically. You can sign it or not, but it’s law. And then there’s no longer an executive branch role. They’re basically trying to create an extra unconstitutional executive branch veto for funding that Trump’s big donors don’t like.

Stone: So let me ask you this. Are you hearing concerns from colleagues in the Senate, including Republicans, about the implications for congressional authority here?

Sen. Whitehouse: Yes, somewhat. But I do think that the power of the fossil fuel industry over the Republican party is such that no Republican really wants to pop their little head up above ground on this one. You know, there’s quite a lot going on here. There’s Lee Zeldin, the EPA Administrator. During this fake criminal investigation that Ed Martin cooked up, he was running around trying to amplify that.

Stone: That criminal element.

Sen. Whitehouse: That criminal element. He was saying, “This is fraudulent. This is disgrace. There’s criminality here.” Well, one of the things about the Department of Justice is that once you have a target in mind, you shut the hell up. You speak through your pleadings. And if you’re representing another agency, you tell them the ground rules that once we’re investigating something, we shut the hell up and we speak through our pleadings. You don’t get to run around accusing people who haven’t been charged of criminal conduct. And Zeldin was running around accusing Habitat for Humanity of criminal conduct. And it just shows how much the whole thing stank.

But even that, where you have the power of government being used to lie about the criminal acts of a private entity — old days, Republicans would have gone — their heads would have exploded about that. Now, because it’s the fossil fuel industry and because it’s Trump, “Oh, go ahead. Lie through your teeth for as long as you want. Violate all the rules of the Department of Justice. We’re not going to say a thing. We’re going to keep our heads down.”

Stone: So let me ask you this. Practically, what is the next step? This is not a new issue. This all began at the beginning of the Trump Administration, which is now over a year ago. The money has been frozen. The $20 billion has been frozen at Citibank since the middle of last year or before. So what are the next steps? You’re the prosecutor, you’re the lawyer. What legally happens at this point? What gets forced?

Sen. Whitehouse: There is a civil challenge, a lawsuit that was brought against EPA saying, “You don’t have a legitimate reason for doing this.” And that lawsuit is still getting through the courts. I just filed an amicus brief to help educate the court about some of the background to all of this.

Part of the course of it was also to pretend that the EPA had done an individualized review of each and every potential grant. You’re that far along in the grant process. Then let’s say the building in question that you were going to repair with the grant money has been washed into the sea. Then let’s say that a criminal investigation has actually taken place and the entity is under indictment. There are circumstances where in the operation of just good common sense, the federal government can come back and say, “Okay, that specific grant for this specific reason, we need to call that back.” You don’t get to do it—

Stone: Not a blanket.

Sen. Whitehouse: No. You don’t get to do it because it’s climate-related or because your big donor, Harold Hamm, doesn’t like it or any of that. And they pretended that they had done that. But we’ve been able to dig in and look at Zeldin’s schedule, admissions that his lawyers have made elsewhere in court. And it’s pretty apparent that he’s been lying about having done those individualized grant reviews. So that’s another piece of it that courts are looking at.

Stone: So let me ask you a final question here. Looking ahead, if the administration succeeds and this money is withheld, what does it mean more broadly? And I’m really interested in your view on this, in the three minutes that we’ve got left here. What does it mean broadly for federal programs, not just in climate, but infrastructure or industrial policy more broadly going forward?

Sen. Whitehouse: Well, it allows the president and his administration a selective post-veto veto, as long as the final distribution of the dollar to the ultimate beneficiary and its expenditure on the project have not been performed. So that could be an account that has been set up and funded for a bridge rebuild. It could be an account that has been set for a military base rebuild. It allows the president to go in detail into very specific projects that have already been cleared by Congress, are there and done. And for no good reason — none of those specific detailed concerns like, “Oh, the building is gone,” or the group was indicted — just stop it. And what that opens up is just an enormous avenue for political manipulation. And that’s what you see Trump using it for.

Stone: And if this administration does not succeed and the money flows again, but this experience of the last year or two, however long this takes, is now in people’s memory — in your view, can the trust of investors in the future to invest in these projects be rebuilt? Or is there always going to be this specter of potential pullback?

Sen. Whitehouse: I think it’ll be dinged a bit. But a lot depends on how the court decisions come out. How clear they are, how simple they are. I suspect that we’ll have pretty clear court decisions that come out. And I think that then lays a very solid legal predicate for the future that investors will be able to rely on.

Stone: Senator Whitehouse, thank you very much for talking. Appreciate it.

Sen. Whitehouse: Good to be with you.