US President Joe Biden recently announced a sizable infrastructure plan—totaling $2 trillion—designed to bring about the wholesale transformation of US infrastructure so that it supports the clean energy transition Biden is pushing for.
It is worth noting that the American Jobs Plan, as the infrastructure package is called, is not exclusively related to climate—which would have a harder time getting through the Senate. Nonetheless, the plan seeks to extend a level of government assistance towards climate change mitigation that has previously not been seen in the United States, with the plan having provisions to combat climate change interwoven into many different issues.
Some of the more explicit measures can be divided broadly into two groups, with the first including the support granted to renewable energy and the improvement of the electric grid and the second pertaining to the backing of electric vehicles and the necessary charging infrastructure.
With regards to the first focus area, the significance of improving and modernizing the electric grid so as to make it more resilient and reliable has particularly been emphasized in light of the blackouts that hit Texas.
This area can also be further detailed as one which includes the building of new transmission lines, which would take on an incredibly important role in terms of disbursing wind and solar power throughout the United States so as to replace the electricity that originates from coal and natural gas.
These transmission lines are crucial for reaching Biden’s target, as expressed in the proposed ‘clean energy standard’ mandate, wherein utilities will be producing power with net-zero greenhouse gas emissions in less than 15 years, by the year 2035. This is not the only arena in which they are critical—extra lines would also enable power sharing by various different regions in a crisis (like those caused by extreme weather events).
Given that cars and electric power plants constitute the two largest greenhouse gas sources of the United States, the reasoning behind the second specific focus area is quite clear. The expenditure on the production and purchase of electric vehicles that is proposed also pertains to the provision of incentives to companies producing batteries for electric vehicles domestically, in the US (as opposed to in China).
A related goal is that of decreasing the cost of purchasing an electric vehicle in addition to increasing charging stations for such vehicles to promote their uptake. However, it is argued by experts that the planned number of charging stations—approximately half a million—is not nearly enough to carry electric vehicles into the mainstream arena.
In addition to these two points of focus, though, there are much more subtle developments as well. These include the way in which roads, bridges, and airports are being planned to have their resilience against extreme weather events (spurred on by climate change) strengthened, the weatherization of buildings in order to increase their energy efficiency, and the directing of funds toward research and development in clean technology.
The plan earmarks over $350 billion for measures directly related to clean energy, like the $100 billion for the electric grid and clean energy, $46 billion for clean energy manufacturing, and $35 billion for climate technology. On top of this, there is also an estimated $400 billion that will contribute to this infrastructural transformation by enlarging tax credits for generating as well as storing clean energy.
These proposed tax credits are especially being received warmly by industry stakeholders. This is due to how the credits significantly boost predictability by giving a 10-year extension to the production and investment credits claimed by those generating renewable energy. This is in contrast to how, in the past, Congress had to decide to repeatedly prolong the tax credit scheme afforded to solar and wind power, with these extensions taking place either at the last minute or even after the credits had already expired.
This boost in predictability imparts upon investors the necessary confidence, in the long term, to be able to divert a higher amount of private capital into the sector. As put by Paul Bledsoe, former climate adviser to the Clinton administration, and currently at the Progressive Policy Institute, “This now puts the entire clean energy transition into hyperdrive (…) The thing it does, I think for the first time truly ever, is provide utter certainty for business investment in clean energy.”
The chief executive of the American Council on Renewable Energy, Gregory Wetstone, on a similar note, argues, “Predictability is going to make it a lot easier to get the investment we’re going to need to secure the growth necessary to be in the ballpark of addressing climate change.”
This infrastructure plan, as can be predicted, is not set to be accepted with bipartisan support. It is instead being criticized as insufficiently ambitious by more progressive Democrats and as overly spendthrift by many Republicans. Most of the backing the package is receiving appears to be from those who posit that it is a good start—despite not being the final result.
Indeed, more climate commitments are expected from the Biden administration in April, which some are calling “Earth Month.” This month, in addition to the proposed infrastructure plan, the White House will also be holding a climate summit (virtually) with a large number of heads of state and government, as well as announcing an update to the US national pledge under the Paris Agreement as to how much of a carbon emission reduction it is targeting.
At the moment, however, it might be wiser to focus on what is most likely to constitute the most significant obstacle for the climate action Biden is envisioning—namely, Congress. This is especially the case in terms of the approval that the administration needs from Congress to raise the corporate tax rate, which will contribute toward actually paying the $2 trillion attached to the ambitious infrastructure plan.
Whether or not the slim Democratic majority that is present in Congress will be enough to get Biden’s plan approved remains to be seen, but the US President does not look set to back down in order to appease Republican demands. As White House National Climate Advisor, Gina McCarthy has expressed, “We don’t want to just manage to the future, we want to win it.”