Thought Leadership

Biden Announces $2 Trillion Infrastructure Plan with Significant Environmental Justice Provisions

Client Updates

Today, March 31, 2021, President Biden unveiled his “American Jobs Plan,” a $2 trillion, eight-year infrastructure plan aimed at accelerating the U.S. energy transition. The plan contains major energy infrastructure funding, as well as notable environmental justice components. The infrastructure plan encompasses far more than just transportation, public facilities and power supply, both in terms of its scope and the number of government programs that it would create and affect.

The plan seeks, among other efforts, to boost the electric vehicle market, improve energy efficiency, promote carbon capture retrofits, expand broadband access, direct climate research funding to Historically Black College and Universities and other Minority Serving Institutions, and target “40 percent of the benefits of climate and clean infrastructure investments to disadvantaged communities.”

To pay for the plan, the Biden administration also released the “Made in America Tax Plan”, which proposes raising the corporate tax rate to 28%, strengthening the global minimum tax rate for U.S. multinational corporations, and eliminating subsidies and foreign tax credits for fossil fuel companies, amongst other things.

Climate and Clean Energy Provisions

The plan’s clean energy spending provisions include a proposed $100 billion toward power infrastructure, including the buildout of the U.S. electric grid, extension of renewable energy tax credits for 10 years, and expanding credits for energy storage. The plan would establish a new Grid Deployment Authority at the U.S. Department of Energy (“DOE”) to allow the agency to better leverage existing rights-of-way and support “creative financing tools” to spur high priority, high-voltage transmission lines. President Biden will also seek to establish an Energy Efficiency and Clean Electricity Standard, which would require utilities and grid operators to improve energy efficiency and support existing “carbon-free” energy sources like nuclear and hydropower plants.

The plan would provide $35 billion for climate research and development. This funding would help support the launch of the Advanced Research Projects Agency-Climate to develop new methods for reducing greenhouse gas emissions and building climate resilience.

To further bolster the  energy transition, the federal government would purchase round-the-clock “clean power” for federal buildings.  The plan, however, does not specifically define what constitutes “clean power” for purposes of federal procurement.  Relatedly, the plan calls for Congress to authorize $46 billion in federal buying power to incentivize “clean energy manufacturing,” including the manufacturing of “cars, ports, pumps, and clean materials, as well as critical technologies like advanced nuclear reactors and fuel.”

The plan would also provide $174 billion in support of electric vehicles (“EV”). Specifically, a proposed grant program would support building 500,000 EV chargers by 2030, and the plan calls for the electrification of the federal vehicle fleet, including U.S. Postal Service vehicles.

Environmental Justice Provisions

As noted above, the American Jobs Plan integrates initiatives that reflect President Biden’s continued focus on environmental justice. The plan would direct 40% of the benefits of climate and clean infrastructure investments to disadvantaged communities, aligning with the administration’s Justice40 Initiative outlined in the January 27, 2021 Executive Order on Tackling the Climate Crisis at Home and Abroad.

Specific provisions relating to environmental justice include:

  • $621 billion in transportation infrastructure and resilience. The plan would double federal funding for public transit. It would also allocate $20 billion for a new program “that will reconnect neighborhoods cut off by historic investments” and ensure that new transportation infrastructure projects “increase opportunity, advance racial equity and environmental justice, and promote affordable access.” Furthermore, the plan would replace 50,000 diesel transit vehicles and electrify at least 20% of the nation’s yellow school bus fleet through a new Clean Buses for Kids Program at the U.S. Environmental Protection Agency (“EPA”), with support from DOE.
  • Building “next generation industries” in disadvantaged communities. The plan would seek to establish 10 facilities to demonstrate carbon capture retrofits for large steel, cement, and chemical production plants. It would also expand the 45Q carbon capture tax credit to make it “easier to use for hard-to-decarbonize industrial applications, direct air capture, and retrofits of existing power plants.”
  • $16 billion for plugging orphan oil and gas wells and cleaning up abandoned mines.
  • Restoring payments from polluters to the Superfund Trust Fund for the first time since 1995, helping pay for the cleanup of hazardous waste sites.
  • $5 billion to remediate and redevelop Brownfield and Superfund sites in distressed and disadvantaged communities.
  • $45 billion in EPA’s Drinking Water State Revolving Fund and in Water Infrastructure Improvements for the Nation Act grants to replace 100% of the nation’s lead service lines.
  • $56 billion in grants and low-cost flexible loans to support the modernization of drinking, waste, and stormwater systems for states, tribes, territories, and disadvantaged communities.
  • $10 billion to monitor and remediate per- and polyfluoroalkyl (“PFAS”) substances in drinking water and to support rural water systems and household well and wastewater systems.
  • $100 billion to upgrade and build new public schools, prioritizing the improvement of indoor air quality and ventilation.
  • Producing, preserving, and retrofitting more than a million affordable, resilient, accessible, energy efficient, and electrified housing units.
  • Targeting job creation in historically underserved communities by investing $10 billion to create a new Civilian Climate Corps, which will work to conserve public lands and waters, bolster community resilience, and advance environmental justice.
  • Safeguarding critical infrastructure in communities most vulnerable to climate-change related weather events by, among other things, investing in the Federal Emergency Management Agency’s Resilient Infrastructure and Communities program and providing a tax credit to incentivize low- and middle-income families and small businesses to invest in disaster resilience.

Drawing upon years of government experience and equipped with a keen understanding of commercial complexities that our clients may confront, we help companies develop robust programs that address the environmental justice goals of stakeholder communities, including the government. Click here to learn more about our Environmental Justice practice.

 

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