U.S. President Joe Biden travelled to Pittsburgh last Wednesday to unveil a US$2-billion jobs and infrastructure plan that includes a 10-year, $650-billion commitment to a U.S. clean energy transition, with big allocations for building energy retrofits, electric vehicle infrastructure, grid modernization, public transit, and union jobs cleaning up abandoned oil and gas wells and mines.
The package is being seen as a “jolt” for Ottawa to follow suit when Finance Minister Chrystia Freeland tables a long-awaited budget later this month. One news report concluded the U.S. action would deliver a big enough financial boost to speed up the global economic recovery from the COVID-19 pandemic.
The plan “would turbocharge the country’s transition from fossil fuels, using the muscle and vast resources of the federal government to intervene in electricity markets, speed the growth of solar and wind energy, and foster technological breakthroughs in clean power,” the Washington Post reports. At the core of the plan is a “national standard requiring utilities to use a specific amount of solar, wind, and other renewable energy to power American homes, businesses, and factories. The amount would increase over time, cutting the nation’s use of coal, gas, and oil over the next 15 years.”
Millions of Jobs and ‘Just a Little Bit of Light’
In his remarks last week at the Carpenters Pittsburgh Training Center, Biden cast his American Jobs Plan as the first in a two-part series—still to come is the American Families Plan—designed for people “who get up every day, work hard, raise their family, pay their taxes, serve their country, and volunteer for their communities, and just looking for a little bit of breathing room—just a little bit of light.” He said the “once in a generation investment” is “not a plan that tinkers around the edges”, but rather “the largest American jobs investment since World War Two. It will create millions of jobs, good-paying jobs. It will grow the economy, make us more competitive around the world, promote our national security interests, and put us in a position to win the global competition with China in the upcoming years.”
Biden added: “Is it big? Yes. Is it bold? Yes. And we can get it done.”
Inside Climate News says the infrastructure plan “holds out the promise of federal dollars for every Congressional district that has roads, bridges, water pipes, housing, transit systems, leaking oil wells, or other infrastructure in need of upgrade and repair—in other words, most of the country. The only catch is that the money is meant for transformation, not restoration.”
“This is no time to build back to the way things were,” the White House said, in the preamble to its summary of the plan. “This is the moment to reimagine and rebuild a new economy.”
Time will tell “whether in the current political climate, Biden will find any Republicans willing to sign on to an historic project to put the nation on track to a carbon-neutral economy, even if it means bringing money and jobs home to constituents,” Inside Climate adds. “But it is well understood in Washington that Biden has a fallback option of passing much of the plan through a budget reconciliation measure, for which he wouldn’t need any GOP votes.”
The Major Elements
ICN lists these key elements of the plan:
• An overall clean energy package worth $650 billion over 10 years, about seven times the size of the Obama administration’s economic stimulus package 12 years ago;
• $213 billion to build, modernize, and insulate affordable housing, “while addressing the shortage of quality housing for low-income communities of colour”;
• $174 billion to fund electric vehicle tax credits, build 500,000 charging stations, and electrify school bus and postal service vehicle fleets;
• $100 billion to modernize the U.S. power grid and boost its resilience;
• $85 billion to modernize public transit systems;
• $35 billion for clean technology research and development, including $15 billion for demonstration projects in utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, rare earth element separations, and floating offshore wind;
• Eliminating $20 billion per year in fossil fuel subsidies, to be replaced by “favoured treatment for capital investments”;
• $16 billion “employing union oil and gas workers to cap abandoned oil and gas wells and clean up mines,” to both create jobs in fossil communities and reduce methane emissions;
• $10 billion for a Civilian Climate Corps, with responsibility for conserving public lands and waters, boosting community resilience, and advancing environmental justice.
Other greatest hits in the Democrats’ plans include transition funding for coal communities, a 10-year extension of the federal investment tax credit for solar, $80 billion for rail that could transform passenger commutes, special attention to ravaged regions like the fossil-dependent Ohio Valley or a New Orleans community of colour that was devastated by a new 50-year-old highway project, reversing Trump-era rollbacks of energy efficiency standards, a corporate carbon disclosure mandate coming soon from the Securities and Exchange Commission, and a new carbon pricing measure just introduced in the House.
Biden’s proposed clean energy standard “would amount to the most sweeping federal intervention in the electricity sector in generations,” the Post says, even though 30 states plus the District of Columbia already have their own.
The standard “would require congressional approval and is likely to face staunch opposition from Republicans,” the paper adds. “It is also unclear whether it could be included as part of a budget reconciliation bill, which would require just 51 votes for approval in the Senate. Even though it would require spending tax dollars, its primary impact would be on the private sector.”
But “administration officials have been working to shore up support for the idea among utility companies, many of which have already set ambitious climate goals and would prefer one national standard to the patchwork of state regulations they now face.”
The Post has reaction from utilities, billionaire climate hawk Tom Steyer, and the National Republican Committee, which (astonishingly) panned the plan before it was even public. It notes that the plan includes expansion of a 45Q tax credit for carbon capture, utilization and storage that enjoys bipartisan support in the U.S. Senate, but is becoming controversial in Canada as the Trudeau government considers a similar provision for inclusion in the upcoming federal budget. Critics say the approach ends up driving greenhouse gas emissions higher and runs the risk of misleading investors.
A ‘Jolt’ for Canada’s Climate Transition
In the Globe and Mail, climate columnist Adam Radwanski says Biden’s announcement delivered “a jolt from south of the border” as Canada weighs how much to invest in its own climate transition.
“With hundreds of billions of dollars pledged for electric vehicle adoption and manufacturing, decarbonizing the electricity grid, energy-efficient buildings, and other green economy goals, it’s an effort to put the United States at the forefront of the climate change fight,” Radwanski writes.
“Coming in a year when countries will set new emissions reduction targets to replace those in the Paris Agreement, governments around the world could feel pressure to raise their ambitions,” he adds. And “that pressure stands to be particularly acute for Justin Trudeau’s Liberals. After being the default continental climate leader while Donald Trump held office, Ottawa now needs to worry about keeping pace with Washington’s green agenda—both as a matter of environmental responsibility, and to prevent domestic industries from suffering competitively.”
(Not that the climate community wasn’t predicting this eight months ago.)
Radwanski traces the continuing wrangling about the amount of stimulus Finance Minister Freeland should build into her budget, with the likely total landing between C$70 and $100 billion. But “with much of the new spending likely to be for other recovery priorities—especially addressing the pandemic’s disproportionate economic impact on women, including through child care policies—the amount for green infrastructure and industry may continue to look like a drop in the bucket next to Mr. Biden’s proposed spree.”
Radwanski says that may not be a bad thing, with Canada ahead of the U.S. on introduction of a national carbon price set to hit C$170 per tonne in 2030, and on phasing out coal-fired power generation. But he points to areas where the Biden plan could “leapfrog” Canada’s performance to date, including grid modernization, the shift to EV manufacturing, and other aspects of cleantech investment.
(He might also have added Canada’s greenhouse gas reduction target for 2030, currently just fractionally more than 31% from 2005 levels.)
At the same time, Radwanski adds, Biden will be hosting his climate leadership summit on Earth Day, just three days after Freeland tables her budget April 19. “It can’t be entirely lost on the Liberals that they will need to be able to speak as ambitiously as their host,” which means “the peer pressure being felt this week is only going to get stronger.”
Climate Action is Job Creation
From the moment the Biden transition team began preparing for their successful candidate’s ascent to the White House, they’ve been making it clear that their four lead priorities—pandemic recovery, climate action, racial equity, and economic recovery—are intertwined. This week, the New York Times says the “big bet” embedded in Biden’s infrastructure plan is that climate action will create jobs, not kill them.
“To Mr. Biden, a $2-trillion infrastructure plan is about creating union jobs, hundreds of thousands of them, in wind and solar power, electric cars, and road- and bridge-building,” the Times writes. “Even those more basic infrastructure projects would have a climate angle: the new roads and bridges would be built to withstand the high waters and brutal storms of a changing climate.”
“I am a union guy,” Biden said in Pittsburgh. “I support unions, unions built the middle class. It is about time you start to get a piece of the action.”
Democrats have been declaring for decades that the choice between jobs and the environment is a false one, the Times adds. “But in the scale of his proposal and the audacity of his promises, Mr. Biden may be laying his political future on that idea,” and “he faces a lot of skepticism”: from Michigan, where autoworkers “know it takes fewer of them to build an electric car,” and from West Virginia, where Sen. Joe Manchin—the centrist Democrat who holds the swing vote in a divided senate—“understands coal miners in his state would earn considerably less putting up wind turbines.”
Also in Pennsylvania, where union workers don’t yet see how their skills would fit a clean energy economy. “They keep saying, ‘We’re going to transition you into solar jobs.’ That’s not how it works,” Shawn Steffee of Boilermakers Local 154 in Pittsburgh, told the Times. “We build power plants, petrochemical plants, and maintain steel mills.”
He added: “Would you ask [legendary U.S. football quarterback] Tom Brady to play middle linebacker just because he’s a football player?”
While union leaders are prepared to work with Biden to confront the climate crisis for now, they’re “skeptical that the well-paying union jobs the president promises will materialize, noting that, so far, the ecosystem of manufacturers, contractors, and utility developers that has grown up around the green economy has often been low-paying and hostile to unions,” the paper adds.
‘Re-guiding Market Forces’
But Bloomberg columnist Gernot Wagner takes a more optimistic view, in a post republished in Canada by The Financial Post.
“Re-guiding market forces toward fully decarbonizing economies implies more economic activity, more jobs, not less,” he writes. “That does not mean that all jobs will stay the same. They won’t, and they shouldn’t.”
For example, Wagner says, Biden’s infrastructure plan “is projected to cost around 130,000 jobs in the oil, coal, and gas industry. Providing these workers with a viable alternative must be part of the clean energy transition, and it is.” He lists the major job categories in the plan—from abandoned well remediation, to the Civilian Climate Corps, to building retrofit jobs “which can hardly be outsourced across international borders”—that help make infrastructure work “perhaps the most durable of climate policies.”
When Ronald Reagan came to power in the 1980s, he removed the “largely symbolic solar collectors” installed on the White House roof by then-president Jimmy Carter. “But most actual infrastructure investments are here to stay,” Wagner writes, and “short of large bipartisan majorities for CO2 emissions cuts, this feature is important. Future administrations are not going to strip homes off their better insulation, or rip out bridges or train lines. It helps that weatherizing homes and building infrastructure goes hand-in-hand with more jobs.”
While a broad spectrum of climate campaigners and policy specialists saw plenty to get excited about in the infrastructure plan, there were concerns the announcement didn’t go nearly far enough.
“It’s a step towards our vision of a Green New Deal,” and “we think it’s historic,” said Sunrise Movement spokesperson Ellen Sciales. “But the truth is this does not meet the scale and the scope of what we need to meet the true scale and urgency of the climate crisis.”
“It is imperative that we act on a once-in-a-generation opportunity to use our governing majorities and build on the success of the landmark $1.9-trillion American Rescue Plan,” said Congressional Progressive Caucus chair Rep. Pramila Jayapal (D-WA), shortly before Biden released the jobs plan. “It makes little sense to narrow his previous ambition on infrastructure or compromise with the physical realities of climate change.”
And the day after the announcement, the Cheyenne River Grassroots Collective built a tripod block in front of the White House and demanded the Biden administration shut down the Dakota Access and Line 3 pipelines. “Water is not an accessory, it’s a necessity and giver of life,” said spokesperson Danny Grassrope.
The fossil lobby, meanwhile, was pushing all-out for precisely that type of infrastructure.
“We support the administration’s goal of modernizing the nation’s infrastructure—including roads, bridges, rail, and ports,” said American Petroleum Institute Senior Vice President Frank Macchiarola. “We also welcome the administration’s efforts to address the risks of climate change by incentivizing innovation for hydrogen and [carbon capture, utilization and storage] as part of this infrastructure package. At the same time, this proposal misses an opportunity to take an across-the-board approach to addressing all our infrastructure needs—including on modern pipelines.”