Now that we have a global agreement in place on climate change, which more definitively sets greenhouse gas emissions reduction targets and timelines, all eyes are set on the question as to how each country, including the US, will achieve its commitments. For the US, legislation and executive agency action are two important pieces to watch. On the legislative front, two bills serve as pivotal tracks for setting longer-term climate mitigation and resiliency policy: the Infrastructure Investment and Jobs Act (IIJA) and the Build Back Better Act (BBBA). As of publication of this blog post, the second has yet to be passed, but its notable framework from earlier this year promises that the US will aim to:
- cut emissions by 50% by 2030
- have a 100% carbon-free power sector by 2035
- be a net-zero economy by 2050
Infrastructure Investment and Jobs Act
Congress passed and the President signed a $1.2 trillion infrastructure bill known as the “Infrastructure Investment and Jobs Act” on November 15, 2021, which reveals significant opportunity for stakeholders in both the design and construction markets. Of the $1.2 trillion, about half involves new investment funding for infrastructure (on top of the existing federal government spending) that will flow to state and local governments as follows (the figures below represent most, but not all of the funding):
- $284 billion for transportation:
- $110 billion for roads and bridges
- $39 billion for transit
- $66 billion for rail
- $25 billion for airports
- $17 billion for ports and waterways
- $7.5 billion for a national network of electric vehicle charging infrastructure
- $7.5 billion for electric buses
- $1 billion for reconnecting communities
- $73 billion for power grid upgrades
- $65 billion for broadband
- $55 billion for water systems
- $46 billion for resiliency
- $21 billion for environmental remediation
- $8.3 billion for western water infrastructure
While the IIJA isn’t a climate bill per se because it invests in a host of physical infrastructure categories, there are some notable provisions that will set in motion the mitigation of greenhouse gas emissions. For example, funding is aimed at:
- building transmission that will accommodate more renewables such as solar, wind, and hydro;
- integrating storage technologies to manage renewable intermittency issues;
- promoting US-based battery manufacturing and recycling;
- advancing research and development of electricity distribution technology, smart grids, and long-duration storage demonstration projects;
- scaling electric vehicles and charging infrastructure (cars, trucks, and buses);
- expanding transit investment to reduce reliance on oil;
- researching, developing, and subsidizing key early-stage technologies that are not considered economic in today’s markets, such as clean hydrogen, carbon capture, utilization, and storage, and advanced nuclear power;
- advancing energy efficiency in residential, commercial, and higher education through tools, industry training, and agency data sharing models;
- helping public schools to integrate renewables, install vehicle charging stations, and procure electric school buses;
- reducing methane reduction through programs to plug, remediate, and reclaim orphaned wells on federal, state, and tribal lands; and
- funding the Abandoned Mine Land Reclamation Fund as it relates to coal.
For more detailed analysis of funding placements relating to energy and climate, the Princeton ZERO Lab is a great resource.
Another important provision in the legislation that isn’t being talked about is its codification of improved environmental permitting procedures known as “One Federal Decision” (OFD), which establishes procedures for streamlining the process. This codification compresses timelines on environmental review and drives agency coordination and quicker action by:
- creating a joint schedule that’s lead by one agency with the power to enforce;
- eliminating sequential agency work schedules to allow for parallel track work to occur;
- capping the timeline to two years in most cases; and
- promoting succinctness with reductions in page count for environmental impact statements.
While OFD isn’t exclusive to emissions mitigation (e.g., clean energy or efficiency projects) or climate adaptation projects for managing severe weather, given the urgency of project deployment, compressed timelines are considered a welcome bit of news.
Build Back Better Act
Many in the climate policy world argue and have modeled that the IIJA is only a fractional start to playing catch-up after decades of dangerous levels of emissions build-up in the atmosphere and oceans. The BBBA, which is still in active negotiation, was intended to be the real powerhouse behind U.S. climate policy on mitigation and adaptation actions. However, the bill has been plagued by setbacks and compromises for months. At the time of this writing, it’s uncertain when and whether the bill will survive at all and it appears that the Biden administration may be pivoting to focus on existing statutory authority through administrative rulemaking proposals.
In early November, the Biden administration announced a suite of proposed methane regulations from multiple agencies, including the Department of Transportation and the Department of Interior, in recognition that methane is considered (in the short term at least) an even more potent greenhouse gas than carbon dioxide. By focusing on methane quickly, the thought is that we can buy ourselves a bit of time on global warming.
The most impactful within this suite of proposed regulations comes from the EPA, which targets methane pollution from the oil and gas industry’s production and collection of natural gas. The regulation will help reduce leaky equipment across the production chain and from oil wells. The significance is notable: the EPA estimates that by 2035, it will help reduce methane emissions by 75% compared to current day methane emissions. The reaction from this rule has been positive from environmentalists while large industry stakeholders appear to be not negative, meaning they see this rule as a forced reality where they stand to gain financially: according to the EPA study, captured methane could be potentially sold in the market at today’s prices to the tune of $5.5 billion.
The Department of Energy announced in early November an initiative to stimulate innovative negative emissions technologies through its Earthshots program, called “Carbon Negative Shot.” This is the first official US effort in carbon dioxide removal.
Finally, by the end of December 2021, the EPA will issue a new rule to increase greenhouse gas tail pipe standards for model year vehicles 2023-2026. The quick turnaround time on this regulation is made to accommodate the need for 2023 vehicles to be on sales lots next year. A new rule will be proposed for vehicles post-2023.