State budget follows the roadmap to climate progress

Michigan lawmakers last month passed a Fiscal Year (FY) 2024 budget focused on growing the economy, lowering costs for families, delivering on kitchen-table issues, and helping anyone make it in Michigan – all goals that intersect with the MI Healthy Climate Plan. Governor Gretchen Whitmer commissioned the Plan in 2020 to chart a path to a prosperous, healthy, equitable, carbon-neutral Michigan by 2050.

Michigan Capitol Building

 

The governor is expected to quickly sign the budget into law. The new fiscal year begins Oct. 1.

The Plan’s goal of carbon neutrality by 2050 includes an interim target of 52% greenhouse gas (GHG) emissions reductions by 2030, from baseline 2005 levels as part of a “Roadmap to 2030” outlining immediate actions needed to meet our climate goals. These goals require reducing annual GHG emissions by approximately 92.95 million metric tons (mmt) of carbon dioxide equivalent (CO2e) based on 2019 emissions levels.

The budget closely followed the Roadmap to 2030, covering several economic sectors and action areas: energy production, transportation and mobility, and the built environment – the three sectors that present the greatest opportunities for greenhouse gas reduction – along with natural and working lands, Environmental Justice, and more.

Clean the Electric Grid

In energy production, Michigan emitted 76.55 mmt of CO2e emissions in the baseline year of 2005, mainly from coal-fired power plants. By 2019, power sector emissions were down by 24%. The Roadmap sets a goal of generating 60% of the state’s electricity from renewable resources, as well as limiting the consumer cost of powering and heating homes to not more than 6% of annual income for low-income households. The FY 2024 budget includes the following approximately $265 million related to the energy sector:

• $150 million to restart the Palisades Nuclear Facility, a plant that provides 800 megawatts of clean energy.
• $43 million to the Michigan Department of Environment, Great Lakes, and Energy (EGLE) to enhance the electric grid and reduce power outages.
• $30 million to EGLE to launch Renewable-Ready Communities, a program that will incentivize communities to host utility-scale renewables.
• $21.3 million to help nonprofits, communities, and businesses expand clean energy infrastructure. 
• $10.5 million to provide community energy upgrades, including a community solar array and undergrounding of power lines.
• $8.4 million to EGLE to expand energy efficiency programming.
• $1.8 million to increase opportunities for low-income residents to participate in energy rate cases.

Electrify Vehicles and Increase Public Transit

In transportation and mobility, where most emissions come from light-duty passenger vehicles and heavy-duty freight trucks, better fuel efficiency and vehicle electrification have reduced emissions by 10% from 2005-19. The Roadmap calls for the infrastructure necessary to support 2 million electric vehicles on Michigan roads by 2030, along with increasing access to clean transportation options – including public transit – by 15% a year. The budget includes about $261 million for mobility upgrades:

• $125 million to EGLE and the Michigan Department of Education (MDE) to help school districts buy clean school buses.
• $70 million to expand clean transportation options, such as transit and high-speed rail. 
• $45 million to expand operating budgets for transit agencies. 
• $7 million to test and deploy new mobility technologies and fill mobility gaps. 
• $5 million to build out the Lake Michigan Electric Vehicle (EV) Circuit, an electric vehicle road trip around Lake Michigan. 
• $5 million to support proving, testing, and demonstration efforts in the mobility industry. 
• $3.5 million to make streets shared and safe for all users, including cyclists. 
• $1 million to study the needs associated with transitioning 100% of the state’s fleet to electric power.

Repair and Decarbonize Homes and Businesses

The built environment, mainly homes and businesses, accounted for 33.39 mmt of CO2e in 2005, mostly from the use of natural gas, fuel oil, and propane for heating and appliances. Driven by increased emissions from commercial buildings, emissions in this sector increased slightly by 2019, to 35.61 mmt. The Roadmap includes reducing emissions from heating Michigan homes and businesses by 17%, along with increasing investments in building repair and improvement to lower costs for working families and small businesses. The budget directs about $312 million to this sector:

• $212 million to EGLE to provide rebates for energy efficient home upgrades.
• $50 million to EGLE and MDE to upgrade school water systems and energy, including building on-site renewables.
• $25 million to repair and weatherize homes to enable clean energy upgrades. 
• $20 million to conduct energy audits to enable clean energy in schools. 
• $5 million to the Michigan Saves green bank to fund clean energy in homes and businesses.

Protect Michigan’s Land and Water

Agricultural soil management is a major source of emissions from working lands, primarily from large-scale farm operations in southern Michigan, while forests in the north are the state’s major carbon sink. This sector’s net GHG emissions remained almost unchanged from 2005-19. In 2019, agriculture and waste sources emitted 17.37 mmt CO2e, and natural lands sequestered 41.41 mmt. Key strategies in the Roadmap include protecting 30% of Michigan’s land and water to naturally capture GHG emissions; supporting farmers’ best management practices to improve soil health, store carbon, utilize other GHG emissions, and protect water quality; and funding programs to encourage the purchase of Michigan-grown and -raised products, address food insecurity challenges, and counter supply chain issues. The budget for natural and working lands includes about $14.4 million:

• $13 million to research and implement climate-smart farming practices. 
• $1.4 million to expand capacity around climate and natural lands programs within the Michigan Department of Natural Resources (DNR).  

Commit to Environmental Justice and Pursue a Just Transition

The Plan prioritizes Environmental Justice (EJ) as necessary to drive better health outcomes, good jobs, and economic prosperity for all Michiganders. The Roadmap includes goals to ensure that at least 40% of state funding for climate-related and water infrastructure initiatives benefit disadvantaged communities and that Michigan fosters a just transition for all workers through proactive engagement, job training, and workforce development. The budget includes about $21 million for EJ climate initiatives:

• $20 million to EGLE to improve air quality and clean up contamination in EJ communities.
• $1 million to EGLE to expand activities that reduce environmental impacts in EJ communities.

Cross-sector investments

In other climate-related investments, the budget also includes:

• $286.8 million to start the Make it in Michigan Match Competitiveness Fund to leverage federal funding.
• $14 million to EGLE to implement the MI Healthy Climate Plan, including planning, staffing, and new programs.
• $10.3 million to EGLE to address all of Michigan’s orphan wells.
• $5 million to EGLE to support the Kent County Sustainable Business Park.
• $2.6 million to EGLE to expand the MI Healthy Climate Corps, helping communities take climate action.
• $1.7 million to pilot new carbon tracking software and metrics for EGLE operations.