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The American Jobs Plan announced 31
March by President Joe Biden in Pittsburgh would invest more than
$2 trillion over eight years in a range of projects to repair
existing transportation infrastructure, expand and fix the power
grid, and retrofit homes for energy efficiency — all with an
eye to creating jobs, reducing carbon emissions, and improving
public health.
Calling for "transformational progress" to tackle climate
change, Biden described his plan as "big, yes, it's bold, and yes
we can get it done."
"It's not a plan that tinkers around the edges. It's a
once-in-a-generation investment ... unlike everything we have seen
or done since we built the interstate highway system and the space
race decades ago. In fact, the largest American jobs investment
since World War II," Biden added, as he proceeded to spell out the
plan's details.
While the bill would invest in infrastructure from highways and
bridges to high-speed internet to water systems, the White House
explained in a 31 March statement that the bill would both generate
jobs in the short run and improve economic output in the long run.
"The American Jobs Plan is an investment in America that will
create millions of good jobs, rebuild our country's infrastructure,
and position the United States to out-compete China," the White
House said in the statement.
At the same time, the plan puts climate change and environmental
justice front and center.
"It will invest in Americans and deliver the jobs and
opportunities they deserve. But unlike past major investments, the
plan prioritizes addressing long-standing and persistent racial
injustice. The plan targets 40% of the benefits of climate and
clean infrastructure investments to disadvantaged communities. And,
the plan invests in rural communities and communities impacted by
the market-based transition to clean energy," the White House
added.
The challenge for Biden now is to get Congress on board.
Energy impacts of the plan
According to the White House, the plan would include the
following elements that are directly related to the energy
transition and future demand for fossil fuels and renewable
power:
Power grid: Hiring of workers for "laying
thousands of miles of high-voltage capacity transmission lines" to
add at least 20 GW of capacity.
Clean energy: 10-year extension of the
investment tax credit and production tax credit for clean energy
and storage projects.
Clean Energy Standard: This would mandate
reductions in US energy sector emissions, similar to the plan in
the CLEAN Future Act introduced by
Democrats in the House of Representatives in March.
Electric vehicles (EVs): Invest $174 billion
in rebates and tax incentives to buy US-made EVs, install 500,000 EV
chargers by 2030, and replace 50,000 diesel buses.
Climate science: Investment of $35 billion to
"position America as the global leader in clean energy technology
and clean energy jobs." This includes research on "utility-scale
energy storage, carbon capture and storage,
hydrogen, advanced nuclear, rare earth element separations,
floating offshore wind, biofuel/bioproducts, quantum computing, and
electric vehicles."
Buildings: Retrofitting more than 2 million
homes and commercial buildings for energy efficiency, resiliency,
and safety, at a cost of $213 billion.
Roads: Spending $115 billion on modernization
of 20,000 miles of highways, roads, and main streets. Fixing the
"10 most economically significant bridges in the country in need of
reconstruction," and repairing 10,000 smaller bridges.
Public transport: Double congressional
spending to support transit systems to $85 billion.
The investments also would "revitalize manufacturing, secure US
supply chains, invest in [research and development], and train
Americans for the jobs of the future," the White House said. And
those hired would be paid prevailing wages and "be given a free and
fair choice" to unionize.
Other parts of the package would invest in safe drinking water
supplies (such as replacing all lead pipes), high-speed broadband,
and repairs to and upgrades of public schools and Veterans
Administration facilities.
Can it pass?
After information on the plan was released, discussions began
about whether it prioritizes the right issues, whether it's too big
or too small, whether parts can be implemented without
congressional approval, and whether it will have sufficient
political support to pass both chambers of Congress.
Most of the infrastructure plan will require congressional
approval, though already proposed federal legislation could target
some of the goals of the bill, observed Lisa Frank, executive
director for Environment America's Washington, DC legislative
office.
The bill is similar in size to the $1.9-trillion COVID-19 relief
package that Biden signed on 11 March, though the American Jobs
Plan's spending would be spread out over eight years instead of
dedicated immediately. But the COVID package passed Congress
without a single Republican vote, in part due to Republicans'
objections to its cost.
One top House Republican, Sam Graves of Missouri, the ranking
member on the Transportation and Infrastructure Committee that
would have to pass the bill, commented that "only 25% of this
package is dedicated to our roads, bridges, transit, rail,
airports, ports and other traditional transportation infrastructure
that the committee is charged with overseeing," and that the bill
demonstrates "fiscal recklessness."
The other difference between the infrastructure and COVID
spending packages is on the tax side. The COVID plan simply added
to US debt. The American Jobs Plan would be paid for by raising the
corporate tax rate from 21% to 28% and upping taxes on Americans
making $400,000 or more per year, through additional legislation,
known as the Made in America Tax Plan. Also announced on 31 March,
the tax plan would reverse much of the Tax Cuts and Jobs Act signed
by President Donald Trump in December 2017.
Republicans said they oppose raising taxes. "The plan is a
Trojan horse for more liberal spending and higher taxes," said
Wyoming Senator John Barrasso on Fox News on 30 March.
"I don't think there's going to be any enthusiasm on our side
for a tax increase," Senate Minority Leader Mitch McConnell,
Republican-Kentucky, said on 25 March in discussing Biden's
possible plan.
The US Chamber of Commerce made the same point in a statement on
31 March. "We need a big and bold program to modernize our nation's
crumbling infrastructure and we applaud the Biden administration
for making infrastructure a top priority. However, we believe the
proposal is dangerously misguided when it comes to how to pay for
infrastructure," CEO Neil Bradley said. "Properly done, a major
investment in infrastructure today is an investment in the future,
and like a new home, should be paid for over time -- say 30 years
-- by the users who benefit from the investment."
Senate Majority Leader Chuck Schumer, Democrat-New York, said he
supports the bill. "Addressing infrastructure, climate, &
environmental justice together to create millions of good paying
jobs is the right combination to meet America's challenges. I'll
work with POTUS to pass a big, bold bill to drive America forward
for decades to come," he tweeted.
The Speaker of the House Nancy Pelosi, Democrat-California, has
yet to issue a statement about the plan. But Frank Pallone, Jr.,
Democrat-New Jersey, and chair of the House Energy and Commerce
Committee said he's onboard with the plan. "I commend the President
for including a national Clean Electricity Standard in his plan
that meets the same aggressive targets of the CLEAN Future Act and
the investments necessary to make it a reality," Pallone said.
Pallone and 31 other Democrats had introduced the LIFT Act in March to direct
$312 billion to clean energy, efficiency, and drinking water
projects that are incorporated in Biden's plan.
However, progressives in the Democratic Party said the
$2-trillion plan is too modest, given the scale of the climate
change problem. "Needs to be way bigger," tweeted Representative
Alexandra Ocasio-Cortez, Democrat-New York.
Knowing the Biden plan was coming, Senator Ed Markey,
Democrat-Massachusetts, and Representative Debbie Dingell,
Democrat-Michigan, in February sponsored legislation to spend $10
trillion over a decade on infrastructure, carbon reduction, and
health initiatives. The Transform, Heal and Renew by
Investing in a Vibrant Economy (THRIVE) Act would mandate
reducing US GHG emissions by 50% by 2030 and establish net-zero
goals for new buildings by 2025 and the electricity sector by
2035.
Full or partial?
Renewable energy trade associations announced their support. The
Energy Storage Association (ESA) said the tax policies, such as
making the investment tax credit for renewables apply to battery
storage, "will level the playing field with other clean energy
technologies and accelerate storage deployments."
By 2030, the US needs to have 100 GW of energy storage, compared
with the 3 GW in operation today, said ESA Interim CEO Jason
Burwen, and that bipartisan legislation in Congress aims for that
goal already. "To build back better, the United States must deploy
energy storage at an unprecedented scale. President Biden's
American Jobs Plan would put us on that path," Burwen said.
The American Council on Renewable Energy (ACORE) praised the
bill for including a federal Clean Electricity Standard, which it
called "vital to ensure we stay on track with the critical
emissions reductions needed to make progress addressing climate
change." ACORE also supports the creation of a Grid Deployment
Authority to facilitate infrastructure upgrades and better linkage
across regions.
The American Petroleum Institute (API) said it supports
modernizing nation's infrastructure and it "welcome[s] the
administration's efforts to address the risks of climate change by
incentivizing innovation for hydrogen and CCUS as part of this
infrastructure package."
But API said the bill should include support for modernizing the
nation's oil and gas pipeline networks as well, and said it opposes
tax hikes. "Targeting specific industries with new taxes would only
undermine the nation's economic recovery and jeopardize good-paying
jobs, including union jobs," said API on 31 March.
Environmental and public health groups said they will push hard
for passage. "We can't let Republican obstruction stand in the way
of taking the bold action that the science and the economy demand,"
Evergreen Action stated. "We cannot water down this proposal as it
winds through Congress. If anything, the package should get more
robust to meet all the critical investments we need to make.
Congress must finally address the existential crisis of our time
and get to work building our clean energy future."
But praise from the environmental community was not universal.
While the American Jobs Plan is substantial, Mindy Lubber, CEO of
Ceres, said it must be seen as part of the bigger picture. "The
administration must now set a strong national target for reducing
greenhouse gas emissions in half by 2030 and putting the country on
the path to reach net-zero emissions by 2050," she said.
Taking a harsher line, Brett Hartl, government affairs director
at the Center for Biological Diversity, deemed it far short of
what's needed. "President Biden's industry-friendly infrastructure
plan squanders one of our last, best chances to stop the climate
emergency," Hartl said. "Instead of a Marshall Plan approach that
moves our economy to renewable energy, it includes gimmicky
subsidies for carbon capture, fantastically wishes the free market
will save us, and fails to take crucial and ambitious steps toward
phasing out fossil fuels. Biden has pledged to cut carbon emissions
50% and decarbonize our electricity sector, but this proposal won't
even come close."
Finding that fine line to satisfy many parties will be a
challenge, said Michael Krancer, former Pennsylvania Department of
Environmental Protection secretary and now principal of Silent
Majority Strategies, a regulatory and permitting advisory firm.
"President Biden will get something passed, just not this bill,"
Krancer predicted. "The question is what gets changed and whether
he wants to make a real play for Republican votes. It's clear that
he is trying to coax union voters back -- particularly the building
trades -- which have been peeling off in droves in recent years
from the Democrat base. There is also a big question whether the
progressive wing of his own party will hold out for more
concessions."
Of interest to the oil and natural gas sector, the Western
Organization of Resource Councils pointed out the plan would spend
$16 billion to plug and reclaim abandoned and orphaned oil and gas
wells, which it said leak an estimated 281 kg of methane and 7
million mt of carbon dioxide annually. However, the group called
that a "one-time fix" that leaves unsolved the problem that oil and
gas companies are not issuing bonds or holding sufficient funds to
clean wells that they drill.
Environmental justice
The infrastructure plan announcement came the day after the
first meeting of the White House Environmental Justice Advisory
Committee. At the 30 March meeting, participants discussed the
Justice40 Initiative, which would require that 40% of all
investment in climate and clean energy infrastructure benefit
disadvantaged and low-income communities that have borne the burden
of toxic air pollution and climate impacts. Cecilia Martinez,
senior director for environmental justice at the White House
Council on Environmental Quality, said the administration would
"listen" to the recommendations of the committee before acting.
Reflecting that issue, Biden's plan targets 40% of the benefits
of climate and clean infrastructure investments to disadvantaged
communities. It sets aside $5 billion to remediate and rejuvenate
communities that are home to legacy pollution caused by
contaminated industrial sites; $10 billion for a new Civilian
Climate Corps; and $56 billion in grants and low-cost flexible
loans to states, Tribes, territories, and disadvantaged communities
to upgrade and modernize stormwater, wastewater, and drinking water
infrastructure.
The plan also would pair investment in 15 decarbonized hydrogen
demonstration projects in distressed communities with a new
production tax credit, and establish 10 pilot facilities that
demonstrate carbon capture retrofits for large steel, cement, and
chemical production facilities, "all while ensuring that
overburdened communities are protected from increases in cumulative
pollution."
Even while the infrastructure bill is being considered in
Congress, Jahi Wise, senior advisor on climate policy at the White
House Climate Office, said the administration will be looking for
ways to allocate authorized spending to improve environmental
justice. Also, an interagency task force has submitted an interim
report to Biden that looks at the impact of coal, oil, and gas
infrastructure on communities, especially front-line communities
and approaches to revitalizing them under a cleaner, greener
economy, Wise said.
Posted 31 March 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit and
Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit