Accelerated action on climate key in Governor’s executive budget recommendation

Lowering costs, keeping Michigan healthy, building a more fair and equitable state, and more — all goals that intersect with the MI Healthy Climate Plan (MHCP) — are key planks in Governor Gretchen Whitmer’s proposed state budget for Fiscal Year (FY) 2025.

On Earth Day 2021, Gov. Whitmer announced renewable energy goals for state-owned facilities. 

The proposal includes a supplemental budget bill focusing on the MHCP, the state’s climate action roadmap that charts a path to a prosperous, healthy, equitable, carbon-neutral Michigan by 2050. The Climate 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 intermediate actions needed to meet Michigan’s climate goals.

The budget recommendation closely follows the Roadmap, covering nearly each focus area of the MHCP: a just transition, energy, transportation, the built environment, natural and working lands, and other climate-related investments.

Here’s a snapshot of new investments, which does not necessarily cover all state programs that have climate action benefits. Michigan is committed to a sustainable future and working to implement the strategies and initiatives proposed in the MHCP:

Cleaning the Electric Grid

Michigan’s energy production sector emitted 76.55 million metric tons of carbon dioxide equivalent (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 set 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 budget recommendation proposes the following state investments related to the energy sector:

• $150 million to the Department of Labor and Economic Development (LEO) to support the restart of a critical clean energy asset that provides 800 megawatts of clean energy.
• $6.7 million to Licensing and Regulatory Affairs (LARA) and the Department of Attorney General to support the implementation the recently signed landmark clean energy laws.
• $5.02 million to the Department of Environment, Great Lakes, and Energy (EGLE) to plug wells and reduce methane emissions.
• $1.93 million to EGLE to support the state’s efforts of pursuing Class VI primacy for carbon capture and storage.
• $1.3 million to LARA to increase funding for the Utility Consumer Participation Board, as directed by the recently signed clean energy laws.
• $363,000 to EGLE to help small agricultural businesses improve energy efficiency or power their facilities with clean energy.

Electrifying Vehicles and Increasing 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 recommendation proposes the following for the transportation sector:

• $74.8 million to the Michigan Department of Transportation (MDOT) for transit and rail programs across the state.
• $30 million to MDOT for local transit innovation grants to improve access to clean transit and intermodal options.
• $25 million to the Department of Treasury for the “MI Vehicle Rebate,” an incentive to purchase clean and electric vehicles.*
• $25 million to EGLE for the deployment of electric vehicle charging infrastructure.
• $22.3 million to EGLE for the deployment of hydrogen stations for heavy-duty vehicles.
• $20 million to EGLE for the “MI Clean Fleet” program to transition fleets to clean and electric vehicles.
• $11 million to LEO to develop a real-world prototype “Truck Stop of the Future” mobility hub enabling companies to transition their fleets to electric and future-proof their businesses.
• $2 million to the Department of Technology, Management, and Budget (DTMB) to support the transition of the state’s fleet to electric vehicles, as directed by Executive Directive 2023-5.
• $693,000 to EGLE’s Michigan Clean Diesel Program to support the transition of vehicles and equipment that currently utilize diesel to clean and electric power.

Repairing and Decarbonizing Homes and Businesses

The built environment, mainly homes and businesses, accounted for 33.39 million metric tons 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. 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 recommendation proposes the following for the built environment:

• $5 million to the Michigan Department of Health and Human Services (MDHHS) for a match to draw down federal weatherization dollars to improve comfort and home efficiency.
• $1.35 million to MDHHS to expand state weatherization offerings.

Protecting Michigan’s Land and Water

In 2019, agriculture and waste sources emitted 17.37 million metric tons of CO2e, and natural lands sequestered 41.41 million metric tons. Key strategies in the Roadmap include protecting 30% of Michigan’s land and water to naturally capture GHG emissions; and supporting farmers’ best management practices to improve soil health, store carbon, utilize other GHG emissions, and protect water quality. It also calls for funding programs to encourage the purchase of Michigan-grown and -raised products, address food insecurity challenges, and counter supply chain issues. The budget recommendation proposes $4 million for the “Farm to Families” initiative to support regenerative agriculture practices and other critical agriculture initiatives.

Committing to Environmental Justice and Pursuing a Just Transition

The Climate 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 foster a just transition for all workers through proactive engagement, job training, and workforce development. The budget recommendation proposes $15 million for LEO’s Community and Worker Economic Transition Office to ensure that communities, workers, and employers impacted by transitions have the support they need to proactively prepare for, benefit from, and shape Michigan's future economy. This investment is a key part of implementing the recently signed clean energy laws.

Making Communities More Resilient to Climate Impacts

The MHCP is a climate mitigation and greenhouse gas reduction plan, not a comprehensive plan to adapt and become resilient to the effects of climate change. That said, the state continues to support residents and communities in adapting to climate impacts we already face, especially in historically disadvantaged and underserved communities. The budget recommendation proposes $15.3 million to EGLE to deploy climate-resilient infrastructure and green infrastructure to mitigate the impacts of climate change on communities.

Drawing Down Federal Climate Dollars

At the same time as the Governor proposed these critical investments, the administration continues efforts to bring home every federal tax dollar possible from the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law to accelerate the implementation of the MI Healthy Climate Plan. Michigan is currently No. 2 in the nation at leveraging federal funding related to climate and energy and the No. 1 state for IRA-funded projects. To date, the state has secured nearly $1.3 billion to help lower energy costs, reduce power outages, create thousands of jobs, and more. Recent announcements include:

• $70 million to support the transition to electric vehicles with investments in Southfield, Van Buren Township, Plymouth, and Ann Arbor.
• $8 million to expand charging infrastructure in the greater Lansing area, and $1.8 million to improve reliability of electric vehicle charging stations.

The budget recommendation proposes $25 million to DTMB for the Make it in Michigan Competitiveness Fund to leverage federal funding, including for climate and energy projects.*

* Proposed investments may not entirely align with or fund priorities of the MI Healthy Climate Plan alone.