Portland, Oregon, has quietly become a model for locally driven climate action. Since voters approved a city measure in 2018, the Portland Clean Energy Fund has raised roughly $1 billion so far and is on track to reach about $1.6 billion by mid-2029. The money comes from a 1% surcharge levied on large retailers operating inside the city — a charge paid by the companies, not directly by shoppers — and it is being used to support climate and resilience projects that prioritize communities most affected by environmental harm.
The fund was born from grassroots conversations nearly a decade ago, when leaders of community-based nonprofits, particularly organizations led by people of color, decided they needed a new revenue source to address growing threats like heat waves and wildfire smoke. Those front-line communities shaped both the fund’s purpose and its priorities: investments that reduce greenhouse gas emissions while also delivering direct benefits to vulnerable residents.
What the fund has delivered so far is tangible. Grants and programs have supported a community solar array in the Cully neighborhood that includes more than 2,200 panels to benefit about 150 low-income households. The fund has paid for more than 20,000 free portable air conditioners distributed to heat-vulnerable homes, financed energy-efficiency retrofits for over 3,000 houses, and helped train roughly 2,000 people for jobs in renewable energy and construction. Urban greening projects include planting 15,000 trees in heat-island neighborhoods and converting six large concrete parking lots into community gardens and green spaces — an area equivalent to about eight NBA courts.
Since 2021, four rounds of nonprofit grants have totaled about $262 million, with awards ranging from small seed grants to multimillion-dollar investments. Portland’s City Budget Office estimates early projects from the first three grant rounds have cut roughly 25,500 metric tons of carbon emissions — the equivalent of taking about 6,000 gasoline-powered cars off the road for a year. As new projects come online, those savings are expected to grow.
The success has not been without debate. Because the fund has generated more revenue than initially projected, elected officials, business groups and community members have disagreed about what constitutes appropriate spending. Proposals have ranged from renovating the city’s arena with green technologies to a police union suggestion to divert a quarter of the fund’s annual income to hire more officers. Supporters of such shifts argue for broader civic investments, while critics warn against straying from the fund’s original focus on climate justice and benefits for vulnerable people. Some proposals may end up before voters.
Portland’s approach has inspired other cities, but it is not a one-size-fits-all template. Denver, for example, created a climate protection fund through a voter-approved 0.25% sales tax after concluding a Portland-style retailer surcharge wouldn’t fit its legal framework; that first year generated about $41 million. Ann Arbor took a different route by increasing property taxes. Observers say the key lesson is tailoring the funding mechanism to local political and economic realities while centering community participation from the start.
Advocates point to the fund’s distinctiveness: community-led design, an emphasis on racial and social equity, and a predictable revenue stream that allows longer-term planning. That combination has enabled projects that both reduce emissions and build resilience where it’s most needed. For cities thinking about similar funds, the Portland experience suggests two essentials: secure reliable local revenue and put those most impacted by climate harms at the center of decision-making.