President Biden’s recently announced American Jobs Plan is potentially transformative to the federal government’s role in rebuilding the economy, combating climate change, and reasserting leadership on the world stage. Not surprisingly, much of the attention has been centered on the package’s direct economic costs and impacts – but at the same time, the nearly $2 trillion package, if enacted, would amount to the single most significant climate-related policy intervention in U.S. history.
Infrastructure policy as climate policy
The plan, while focused on infrastructure, is premised on the notion that every infrastructure choice is also a climate choice – and consequently, the wise use of governmental resources can produce positive outcomes for the environment and the economy alike. Indeed, the plan’s connection to Biden Administration climate goals is quite apparent in several respects. Even within the traditional ‘roads and bridges’ categories of infrastructure spending, the Biden plan proposes a considerable $174 billion in funding for electric vehicle charging stations and $85 billion for public transit. Such investments, of course, will likely produce positive benefits in the realm of jobs and economic growth, but they also reflect the Administration’s underlying support for green development and investment – and in that sense, the package is not just about job creation after all.
The evolving policy scope
In other ways, the proposal’s connection to climate is less obvious, but a bit of digging under the surface reveals a link to the Administration’s broader environmental goals. Indeed, what we may be seeing in the Biden plan is nothing less than a fundamental reconceptualization of what infrastructure spending should be about. Traditionally, infrastructure brings to mind shovel-in-the-ground construction of roads, bridges, and waterways. However, such brick-and-mortar infrastructure has always been about connectivity and commerce: in the current digital age, therefore, that requires us to think more broadly about broadband access, too. As a matter of fact, given today’s globalized economy, digital connectivity is every bit as critical to economic growth and opportunity as the construction of interstate highways was a half-century ago.
The basic fact is that over 35 percent of Americans currently living in rural areas lack access to high-speed internet. Consequently, they lag far behind their urban and suburban counterparts in competing for jobs in many of today’s digitally connected workplaces, and their communities struggle to attract technology-based employers. Beyond that, the lack of internet connectivity also prevents communities from taking advantage of recent technological advances in energy efficiency and grid maintenance that allow highly connected communities to reduce their environmental impact. In that sense, then, the expansion of digital connectivity is at least as important as the construction of new roads and better bridges. Moreover, success in addressing inequities in this arena will contribute to a rising economic tide that will lift all boats.
The cost of inaction
All of this is apparent to many in Congress, but President Biden’s plan also comes with a steep price tag, and thus, high potential for divisive partisanship in today’s traditionally bipartisan infrastructure policy space. The Administration’s proposed funding mechanisms – including increases for corporate tax rates and global minimum tax – would essentially reverse key pieces of the Trump Administration’s 2017 tax reform. Polls show Americans broadly support it; however, especially given the current national political arena’s heightened polarization, the likelihood for Biden’s proposal to remain intact in Congress is highly uncertain at best.
All that said, the long-term costs of policy inaction in this arena are staggering. Indeed, a recent instance of infrastructure neglect —the 2021 Texas blackouts— exemplify how policymakers’ failure to invest in technological improvements over the long haul can result in sudden, catastrophic economic disruption as well as widespread preventable human suffering. Some estimates place the total cost of the Texas blackouts at around $90 billion and over 100 Texans’ lives. At the same time, an initial investment of $100 billion on grid modernization – what is proposed in the Biden plan – will likely yield significant benefits in terms of climate protection, American economic growth, and quality of life.
As it is best understood, the American Jobs Plan is certainly an infrastructure plan – but it is also a climate plan. Though the plan alone will not lead to a complete decarbonization of the American energy sector by 2035 and to net-zero emissions by 2050, it would be an important and concrete step forward. What is more, the plan represents an important reassertion of the United States’ role as a leader in the development of technology and the global fight against climate change. Before reengaging in climate diplomacy after a period of relative dormancy, the Biden administration will first have to considerably rebuild trust with its diplomatic counterparts. The administration’s first 100 days have laid the necessary groundwork and core components of the American Jobs Plan will further build on that foundation.