This is the twenty-sixth post in our series on "The ABCs of the AJP."
As we wrap up our blog series on the climate and energy implications of the Biden Administration's American Jobs Plan (AJP), it is an opportune moment to revisit our journey from A through Z, and reflect on whether the Biden Administration's proposed investment in infrastructure can set the nation on a path to achieve its 2050 net-zero target.
We started with our first post in the series on Earth Day, April 22, when, on the first day of the Leaders Summit on Climate, President Biden announced a new nationally determined contribution (NDC) to achieve a 50 to 52 percent reduction in economy-wide greenhouse gas (GHG) pollution from 2005 levels by 2030.
The President's announcement noted the many steps his Administration would take to support the NDC, which will be submitted to the United Nations Framework Convention on Climate Change in advance of the Conference of the Parties 26 later this year in Glasgow. The announcement also described the Administration's "whole-of-government" approach to addressing climate change, including through infrastructure investment and job creation.
We then discussed the ways in which the AJP could give life to the Administration's mantra to "Build Back Better," including through investments in battery technology, where we noted that Princeton's Net-Zero America study projected a massive build-out of batteries to achieve deep-decarbonization goals on par with this Administration's. We also discussed why, besides addressing the climate crisis, the AJP is also intentionally designed to reverse the trend of China's dominance in manufacturing electric vehicle (EV) batteries and onshore that manufacturing capacity here in the U.S.
Other investments proposed by the AJP are intended to make the power grid more resilient, an objective made clearer by last winter's storms in Texas and the resulting power outages. As the AJP notes in supporting its proposed investments in distributed energy resources (DERs), power outages cost Americans over $70 billion each year in lost productivity.
The AJP notes how past infrastructure investments - most notably, construction of the largest infrastructure investment in the past century - often split communities apart, such as the construction of an elevated freeway through the middle of a predominantly African American neighborhood in Syracuse, New York. To leverage infrastructure investment to counteract environmental injustice, the AJP would instead target 40 percent of the benefits of climate and clean infrastructure investments to disadvantaged communities. In this respect, the AJP is designed to support all four of the Administration's main priorities: Responding to the COVID-19 pandemic; creating jobs to support the economic recovery; reducing racial inequality; and addressing climate change.
Recognizing the role that forests and working lands can play in climate mitigation and adaptation, the AJP also calls for $10 billion to create a new "Civilian Climate Corps." The AJP also endorses legislation introduced in Congress, which proposes $120 billion in wildfire and climate change resilience projects, forest health, and watershed restoration, as a means of creating two million jobs in rural America. Given the role that power lines have had in sparking wildfires in California, and the experience in Texas last February, the AJP also calls for $100 billion in grid modernization and hardening.
The AJP would also support game-changing technologies, such as green hydrogen. Hydrogen is viewed as key to decarbonization of hard-to-abate industrial processes and would be supported by the AJP's proposal of 15 decarbonized hydrogen demonstration projects in distressed communities and as part of an additional $15 billion increase in funding for climate R&D priorities.
Such proposed investments may reveal the disconnect between the AJP's broad concept of "infrastructure" and some of its opponents' narrower formulation of what should appear in an infrastructure package. While the Biden Administration views infrastructure investment as a vehicle to promote economic opportunity and equality and to address climate change, Republican proposals have sought to strip the package from many components viewed as either "soft" infrastructure or too focused on climate change.
As a vehicle of job creation, the AJP intends to blunt the impacts of the energy transition upon communities whose livelihood has centered around fossil fuels, including by ensuring that jobs in the clean energy economy would pay prevailing wages and provide opportunities for unionization. The Administration's objective in this regard - often referred to as "just transition" - is shared by international efforts to address climate change, including in the Paris Agreement and the European Green Deal.
Some of that just transition could be fulfilled in part by the AJP's proposal to invest $100 billion to modernize kids' schools and childcare facilities. Additionally, the AJP's proposal for a $40 billion Dislocated Workers Program to fund job training out of fossil-intensive industries and into union jobs might help support this transition in the labor force.
Other union-pleasing provisions of the AJP would seek to onshore critical supply chains, in accord with an Executive Order President Biden signed during his first week in office; entitled "Ensuring the Future is Made in All of America by All of America's Workers," that Order would embed "Buy American" restrictions throughout the federal government, including by creating a new Director of Made-in-America within the White House Office of Management and Budget.
Some of the AJP's largest investments are designed to support the Administration's objective of achieving 100 percent carbon-free electricity sector by 2035. The AJP would accomplish this through support for deployment of nascent technologies, such as small modular nuclear units and offshore wind, which the Administration announced it intends to increase by 30 gigawatts (GW) by 2030 through a series of federal actions. By that date, the Administration has also set a goal of reducing power-sector emissions by 80 percent, including through a centerpiece "Energy Efficiency and Clean Electricity Standard" - what's generally referred to as a "CES" - which would require load-serving entities to increase their reliance upon zero-carbon power sources each year.
But these targets raise the question of what constitutes zero-carbon power and whether carbon capture, utilization and sequestration (CCUS) can play a role in cleaning up both the power sector and the broader economy. Despite opposition to CCUS from many in the environmental community, the Administration made a bold move in the AJP, when it announced support for expansion of the bipartisan Section 45Q tax credit, and made clear that this would apply not only to hard-to-decarbonize sectors, but to direct air capture and retrofits of existing power plants as well.
Beyond its emission reduction targets, the AJP also intends to make the electricity grid more resilient, including through promoting utility-scale energy storage by making standalone storage projects eligible for the federal investment tax credit.
Much of the disconnect between Democrats and Republicans with respect to advancing the AJP's objectives involves how to pay for trillions in infrastructure investment. Another major unresolved question is whether the Administration can advance a CES to reduce emissions from electric utilities through the reconciliation process. The AJP, when announced, made it unclear whether the Administration would pursue this through executive action or legislation; indeed, the White House's statement that "President Biden will establish an Energy Efficiency and Clean Electricity Standard (EECES)" might be interpreted to suggest that no Congressional authorization is needed.
Another element of the AJP on the chopping block is its proposed $174 billion investment in EVs. Although that investment in electrifying the nation's vehicle fleet was the single largest expenditure in the AJP as initially proposed, the bipartisan framework omits $100 billion in EV subsidies.
In contrast, that framework supports $55 billion of the AJP's proposed $111 billion in investments into improvements in drinking water and wastewater management systems, reflecting that replacing lead service lines may more clearly fall within what is viewed as hard infrastructure, than EV charging stations and rebates.
Perhaps the X-treme weather experienced globally this summer will cause both parties to come closer on the need to address the impacts of a warming environment, both by reducing emissions and promoting adaptation. Yet, the more likely scenario is that, even if dressed as improving children's health, investments in climate mitigation lie in a politically intractable place.
What's clear is that the AJP's investments would amount to a significant down payment towards the changes in energy generation and consumption needed to achieve the Administration's new NDC. Some Republicans say it is too much, too soon. Some progressives say it is too little, too late; we should just stop production and use of fossil fuels today. While the AJP would point the U.S. in the right direction, for sure, the biggest question is how and when more than a bare majority of Congress will get on board with the objective of achieving a net-zero future.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
