President Biden unveiled a new $2 trillion American Jobs Plan on Wednesday, March 31, focused on infrastructure, the care economy, climate and, as the name implies, creating desperately needed good jobs. Previous U.S. COVID-19 spending stimulus packages were focused on short-term emergency response, and too much of it propped up the business-as-usual, polluting economy.
This new proposal is designed to promote longer-term economic recovery and keep the United States competitive while responding to the economic devastation from the coronavirus pandemic and the climate crisis.
If the proposal becomes law this summer, as Biden hopes it will, it would simultaneously create millions of good-paying jobs and be the most important climate legislation in U.S. history. Not all of the specific investment amounts have been identified yet, but it appears that at least $1 trillion would go to sectors that fall under the broad umbrella of climate change, clean energy and environmental justice.
Biden’s jobs proposal would help the United States regain its status as an international leader in climate policy and in clean energy industries. It proposes more spending aimed at addressing climate change and protecting the environment than any other countries have announced in their COVID recovery packages.
The only other economy with a similar level of ambition is the European Union, which is requiring that 30% of its economic recovery package and 2021-2027 budget be climate-friendly. In this U.S. proposal, it would be about 50%.
The Jobs Opportunity
Evidence shows that climate-friendly investments are an effective stimulus. $1 invested in clean infrastructure returns far more than $1 to the economy. A plethora of recent studies have outlined the huge job creation potential of climate-friendly stimulus in the United States. Investing in clean energy can create 2-3 times more jobs than investing the same amount in fossil fuels; it requires a lot of labor to retrofit buildings to be more energy efficient or to install solar panels.
When the United States invested $90 billion in clean energy as part of the 2009 Recovery Act, it supported 900,000 job-years (full time jobs over one year) in clean energy fields from 2009 to 2015. Other labor-intensive and climate-smart activities, like restoring nature-based infrastructure, also provide economic output and job creation benefits far greater than the scale of investment.
Climate-friendly stimulus has the potential to not only spur job growth but to create quality employment opportunities in a well-paid workforce and safe, healthy and equitable workplaces. Creating quality, American, union jobs is at the core of the Biden plan, which embraces labor priorities like prevailing wage standards, project labor agreements, apprenticeships and training programs, empowering workers to organize, and addressing workplace bias, discrimination and harassment.
Below we outline the key climate provisions of Biden’s proposed infrastructure package.
Affordable and Sustainable Housing
The plan proposes spending $213 billion to produce, preserve and retrofit more than two million affordable and sustainable places to live, with a particular emphasis on providing housing to underserved communities across the country. It calls for reform of zoning laws that make cities more unequal and more sprawled.
Investments in building efficiency and resilience to climate change hazards have been proven to be an effective way to quickly create jobs. The United States should be able to quickly ramp up building retrofits through existing programs — such as the Weatherization Assistance Program and the State Energy Program — as it did with the 2009 Recovery Act, when investments in building efficiency created tens of thousands of jobs. More efficient buildings can also save money for residents and businesses, particularly important now since millions of Americans are behind on utility bills due to COVID-19’s economic impact.
The proposal also includes modernizing and improving the energy-efficiency and resiliency of schools and federal buildings, among others, presenting another opportunity to create jobs and lower energy demand.
The plan proposes investing $174 billion to electrify the nation’s transportation system while creating good jobs in manufacturing and construction. This includes providing sales rebates and tax incentives to encourage drivers to switch to electric vehicles (EVs), building a national network of 500,000 EV chargers by 2030, and electrifying the federal fleet including the Postal Service. Electric vehicles save consumers money on gas, improve health by reducing air pollution, and are better for the climate. The IEA finds that EV charging infrastructure creates more jobs than investing in highways or in traditional car manufacturing. The proposal also includes electrifying 50,000 transit vehicles and at least 20% of the school bus fleet (about 96,000 buses) through a new clean school bus program at the Environmental Protection Agency. School buses are critical to school accessibility across the country and electrifying these vehicles will create cleaner and healthier air for kids, reduce greenhouse gas emission and improve communities’ energy resilience through the bus batteries.
The plan proposes investing $85 billion to modernize and expand public transit systems and $80 billion to support Amtrak in repairing and modernizing railways. Public transit has been an effective job creator: When U.S. states had the choice of where to spend 2009 Recovery Act transportation money, each dollar spent on public transit projects created 75% more job-hours than a dollar spent on highways. Public transit investments also support cost savings for everyone in the economy by reducing travel costs, reducing traffic and increasing business productivity — all of which have a long-term positive effect on jobs.
Biden’s proposal includes spending on highways and bridges as well, but is focused on road repair rather than building new roads. The plan calls for driving innovation in sustainable materials by procuring cleaner cement and steel for these projects, and includes $20 billion to improve road safety and reduce traffic fatalities for pedestrians and cyclists.
Transmission, Clean Energy and Electric Grid Modernization
The plan proposes $100 billion for power infrastructure, including significant investments in transmission, tax credits, clean energy procurement by the federal government, and grant support to state, local and tribal governments. It suggests that these investments be accompanied by an energy efficiency and clean electricity standard to reach 100% carbon-free power by 2035. Few details are provided, but such a standard would be transformative.
The plan proposes to establish a new investment tax credit for transmission lines, with a goal of building out at least 20 GW of high-voltage capacity lines. It would extend for 10 years the investment and production tax credits for clean energy generation and storage, with expanded direct-pay options — providing these tax credits as direct payments to clean energy developers, overcoming challenges with existing tax equity financing measures. Taken together, these measures provide critical financial incentives and policy certainty for clean energy developers.
The measure also proposes a new Grid Deployment Authority at the Department of Energy, which could make it easier and faster to find the right locations and get the permits to build transmission infrastructure. Delays in transmission deployment cost system operators billions every year and are a barrier to additional renewable energy development. New transmission and grid modernization can help the United States utilize the most productive renewable energy sites and diversify the location of our resources, lowering the costs of the energy transition while increasing grid resiliency.
The ambitious investments in this proposal are necessary to accelerate decarbonization of the U.S. electricity system. The costs of renewable energy technologies have declined dramatically (71% for onshore wind and 90% for utility-scale solar) since 2009 and the United States added new wind, utility-scale and rooftop solar and battery storage at record levels in 2020. Nonetheless, we need to build zero-carbon generating capacity at double or triple this rate over the coming decade to meet midcentury decarbonization targets, according to recent expert reports.
Next Generation Industries, Advanced Manufacturing and RD&D
Biden’s plan also goes a long way to tackle emissions from industry and manufacturing, which is the most difficult part of the economy to decarbonize. It includes $580 billion to strengthen U.S. manufacturing. This includes $180 billion specifically for Research, Design and Development (RD&D) on emerging technologies, $35 billion of which is focused on climate science and innovation. The measure would also create a dedicated research agency — the Advanced Research Projects Agency-Climate (ARPA-C) — within the DOE for climate research and advanced technologies.
Other measures include extending the 48C tax credit for advanced manufacturing (an oversubscribed program in the 2009 recovery act that helped to increase domestic wind manufacturing) and $15 billion in demonstration projects for a number of technologies including clean hydrogen, advanced nuclear and energy storage.
In line with existing bipartisan legislation and the House Select Committee on the Climate Crisis’s recommendation, Biden’s plan supports large-scale carbon sequestration efforts which will capture CO2 directly from emission sources and from ambient air. Studies show that even partial deployment of the carbon capture and storage plants required to meet our climate goals could create over 61,000 American jobs through 2035.
To accelerate carbon capture and permanent CO2 storage, the plan aims to reform and expand the bipartisan 45Q tax credit to make it direct pay and easier to use for hard-to-decarbonize industrial applications, direct air capture, and retrofits of power plants.
If passed, this would be a historic investment in advanced manufacturing and the next generation industries needed to decarbonize the U.S. economy. Investments in RD&D are proven job creators and sources of long-term economic growth, with the potential to increase future competitiveness, advance energy security and work towards emission reductions in hard-to-abate sectors.
President Biden’s plan calls for $50 billion for improving infrastructure resilience across the electric grid, food systems, health systems, urban infrastructure and transportation infrastructure. Part of that investment is in retrofitting buildings to make them better able to withstand climate change impacts.
This could be done by incorporating materials and standards that can better stand up to more severe storms or using roofing materials that can withstand wildfires. As climate change disproportionately affects marginalized communities, part of the plan focuses on building resilient infrastructure in vulnerable communities most at risk of climate impacts disasters. The plan also aims to empower local leaders to shape some of these project funds.
Part of that $50 billion for resilient infrastructure would go to restoring nature-based infrastructure — our lands, forests, coastal and ocean resources, wetlands and watersheds that families and businesses rely on for their lives and livelihoods. The plan calls on Congress to invest in protection from extreme weather events like wildfires, floods and hurricanes that cost the United States $95 billion in damage to homes, businesses and public infrastructure in 2020 alone.
Biden also asks Congress to support agricultural resources management and climate-smart technologies, and the protection and restoration of major land and water resources like Florida’s Everglades and the Great Lakes. The workforce to implement these proposals could come through the new Civilian Climate Corps, for which Biden calls for a $10 billion investment to provide Americans with good-paying union jobs while conserving public lands and waters, bolstering community resilience and advancing environmental justice.
Biden’s bet on nature-based infrastructure would also pay big dividends for carbon removal. The country’s natural and working lands like forests, farms and wetlands collectively remove 12% of annual U.S. greenhouse gas emissions from the atmosphere already. They have the potential to remove up to 1 billion tons of additional carbon dioxide per year with smart measures to promote conservation, restoration and sustainable land management.
Creating Opportunities in Distressed and Disadvantaged Communities
The American Jobs Plan includes multiple initiatives intended to reduce inequality and assist disadvantaged communities, including communities that formally relied on fossil fuels and those impacted by local pollution. The plan proposes an immediate investment of $16 billion in plugging oil and gas wells and restoring and reclaiming abandoned coal, hardrock and uranium mines, as well as a $5 billion investment in rehabilitation in Brownfield and Superfund sites.
It also involves investing in programs such as the Appalachian Regional Commission’s POWER grant program, the Economic Development Agency’s Public Works program, Department of Energy grants for idle factories and “Main Street” revitalization efforts through United States Departments of Housing and Urban Development and Agriculture. These programs support new infrastructure, economic development and diversification in communities that have faced significant disinvestment.
Such investments can create jobs and bolster energy transition communities while mitigating methane emissions and addressing local environmental impacts on water, soils and air. Research conducted last year suggests that plugging 500,000 wells could create up to 120,000 jobs at a cost of between $12-24 billion. The oil and gas industry lost over 100,000 jobs last year, and this program could be a lifeline for fossil fuel workers (and the local and state economies that depend on them).
And Much More
The American Jobs Plan is expansive. In addition to some of the critical climate spending discussed previously, it includes other priority investments in infrastructure, environment and public health. The proposal would replace 100% of lead pipes and service lines, upgrade and modernize America’s water systems and provide affordable, reliable, high-speed broadband to all, to name just a few examples.
The plan also includes the crosscutting commitments to high-road labor standards and safe and equitable workplaces, racial equity, and reaching frontline and underserved communities that must underpin a net-zero transition that ensures prosperity for all. Finally, the American Jobs Plan includes the commitment to supporting state, local and tribal governments that will determine its success across infrastructure priorities and ensure it delivers on the benefits it promises.
Securing a Green, Inclusive Future
President Biden’s American Jobs Plan is an ambitious, inclusive and people-first foundation for a clean energy future. It’s commitment to building a modern energy system, 100% carbon-pollution free power by 2035 and investing in transmission, will underpin rapid electrification over the next decade. Proposed investments in the power, building and transportation sectors promise to create quality jobs and economic growth while lowering emissions. And its focus on sustainable land use and making infrastructure resilient to climate change is welcome since these important topics don’t usually receive the attention they deserve. While there remains more to be done outside the infrastructure space, this is a monumental proposal to secure the country’s future.
Now, all eyes turn to Capitol Hill, where Biden’s proposal is expected to be debated and translated into legislation over the coming months and well into the summer. This proposal will be considered along with existing climate legislation and proposals on surface transportation reauthorization. We can expect ongoing debate about the scale of the American Jobs Plan’s ambition, but if only one thing is clear it is that Congress must rise to the occasion and be bold because the United States cannot afford to wait any longer to take serious climate action.
- EDITOR'S NOTE, 4/5/21: A previous version of this blog post indicated that at least 50% of the proposed U.S. economic recovery package would be climate-friendly. We have since updated the post to indicate that about 50% of it would be climate-friendly.