To meet the emissions targets outlined in the Paris Agreement, experts estimate the United States government will need to spend at least $1 trillion annually, or between 3 to 5 percent of GDP, for a decade. President Biden’s infrastructure plan, unveiled Wednesday amid much fanfare about its climate commitments, doesn’t come close.
The American Jobs Plan includes many good things, from money for clean energy and getting rid of lead pipes to strong labor protections, along with the usual suspects like bridges and roads. But it intends to spend roughly 1 percent of GDP per year, with much of that devoted to things that will have marginal or potentially even negative impacts on the climate considering the amount of carbon-intensive materials involved in more traditional infrastructure projects and growth. In a nod to recurring fears about a ballooning federal deficit, the administration also intends for the entire $2.3 trillion first half of the package presented today to be doled out over eight years, with corporate tax hikes over 15 years. As Biden boasted in his speech announcing the plan in Pittsburgh, it “reduces the federal debt over the long haul.”
While there are more legislative agendas yet to be released, right now it’s hard to escape a troubling conclusion: The administration’s much-hyped infrastructure plan—touted as the vehicle to pass climate policy through this Congress—reads as though it was designed to please deficit hawks more than climate hawks, with some off-topic saber-rattling at China thrown in.
To put the amounts announced Wednesday into perspective, the $787 billion Obama-era American Recovery and Reinvestment Act of 2009 spent $90 billion on a range of clean energy programs. Biden’s American Jobs Plan, which emerges over a decade later, during which the world has learned much, much more about how urgent the climate crisis actually is, would spend roughly $125 billion on a range of clean energy programs each year for eight years. American budget numbers are big, so let’s put it another way: As one climate analyst pointed out recently, Americans spent $32.6 billion on children’s toys in 2020. The Biden administration plans to invest each year roughly four times the amount of money consumers spent on children’s toys last year to tackle what it frequently refers to as an existential crisis.
That’s not to say there isn’t a lot to like, within and beyond clean energy priorities: The plan’s $500 billion of investments in clean energy and research and development would be the most ambitious in U.S. history. Funding through the Rural Utilities Service could allow rural electric cooperatives to shutter coal plants ahead of schedule, and there’s fairly modest funding ($16 billion) for union workers to start plugging the country’s estimated 3 million orphaned and abandoned wells—a subject that doesn’t get anywhere near enough attention as oil companies ditch unprofitable projects and leave the government with the mess and the bill. The plan calls on Congress to pass the PRO Act, a sweeping labor law reform that has been a major priority for both organized labor and many climate groups eager to ensure workers in a green economy have the right to organize. Among the biggest line-items is a $400 billion investment in care work, a sizable source of low-carbon jobs, and a sector whose workers would benefit considerably from beefed-up labor protections. As part of an ambitious R&D build-out, there’s a line item for $35 billion of research into hard-to-decarbonize sectors like steel and cement, for which there currently aren’t scalable climate-friendly alternatives. Forty percent of the overall “benefits” from investments are slated to flow to communities on the frontlines of the climate crisis, though the definitions for what a benefit is and who qualifies for them remain to be seen.
The plan is also a window into what the White House sees as its core climate priorities. Electric vehicle infrastructure will get more than the amount of money that will go to rail and public transit combined, to be furnished in large part via “grant and incentive programs for state and local governments and the private sector,” in addition to indirect and previously floated stimulus measures like using government procurement to stimulate the electric vehicle industry. That’s well below the $500 billion public transit electrification plan put forward by Representatives Alexandria Ocasio-Cortez and Andy Levin along with Senator Elizabeth Warren earlier this month. A revamped Civilian Conservation Corps will get just $10 billion. There’s around $100 billion in total for the electric grid. Its plan to “produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units” represents just 1 percent of the country’s housing stock.
Bizarrely, the opening salvo of the White House’s 12,000-word fact sheet on the plan framed it as a response to “the great challenges of our time: the climate crisis and the ambitions of an autocratic China.” While numerous experts have pointed out the urgent need for collaboration with China on climate change, Biden ended his speech on a grand Bush-era note, casting the U.S. as a democratic bastion trapped in an epic battle against foreign autocrats.
Press coverage of the infrastructure package has mostly focused on the total amounts allocated to different projects. Less attention has been paid to how those funds are being dispersed. On climate priorities in particular, a large portion of that investment will happen through tax credits rather than direct investments. That includes an additional $400 billion not tallied into the topline spending figures for a 10-year extension and expansion of tax credits for wind and solar power. Those were temporary benefits for the solar and wind credits furnished as a kind of Faustian Bargain for repealing the crude oil export ban in 2015.
The plan also includes slightly tortured-sounding ideas like “pairing an investment in 15 decarbonized hydrogen demonstration projects in distressed communities with a new production tax credit.” The fact sheet describes the ambition to enact a market-based clean electricity standard as well. It’s not clear whether that will include partial subsidies for fossil gas like those currently present in the CLEAN Future Act out of the House Energy and Commerce Committee.
It’s a plan that doesn’t exactly seem built to please: Its climate investments are paltry relative to the scale of the crisis, raising criticism among progressives. Deciding to fund the bill by raising corporate taxes—an admirable goal in its own right—has already raised hackles on the right and among centrist Democrats who want tax breaks for their wealthier constituents. The American Jobs Plan will now get kicked to Congress. Lawmakers will haggle over how to translate it into a legislative package; the most likely result will be one giant bill to be passed through reconciliation sometime in late summer or early fall. Those who want to see U.S. emissions drop still have a lot to fight for.