This article was published in The Daily Record on April 22, 2021.
The Biden Administration announced a major infrastructure plan captioned the American Jobs Plan in March 2021 with massive $2.3 trillion expenditures and a broad definition of what counts for infrastructure. The proposal addresses bridges and roads to an extent but delves into climate change and energy re-structuring in a major way. In particular, the plan would use federal funds and policy to force the transition from fossil fuel usage to renewable energy over the next 15 years.
The proposal includes an “Energy Efficiency and Clean Electricity Standard,” subject to Congressional adoption, that would set a national standard for energy production. The standard would require zero carbon emissions from power sector emissions by 2035. Significantly, President Biden’s infrastructure proposal aims to move the United States to a carbon free energy power system within 15 years. In addition, the plan calls for investing in improvements in the electrical grid to move towards clean power.
Further, since transportation is a key area to be tackled in addressing pollution concerns, the plan would include significant incentives to promote development of electric vehicles, sale to United States residents, as well as buying such vehicles for government vehicle fleets. Public transportation would also be addressed with major funding for purchase of electric transit vehicles and school buses. The Biden Administration plans to promote development and distribution of clean vehicles by promoting clean vehicle production.
The climate policy provisions appear to be timed to lead up to an international summit of world leaders on April 22 prior to the United Nations summit later this year. The President’s proposals are being offered in advance of the Earth Day virtual summit with world leaders where he intends to re-engage in the Paris Climate Agreement. The proposals and re-entering the Paris Climate accord are stirring opposition from Republicans in Congress. The minority plans to take a variety of steps to highlight the Biden Administration’s proposals, including hosting a variety of forums on climate change and energy policy, passing legislation to require the President to submit proposed Paris climate energy targets to Congress first, and proposing a variety of specific legislation to target aspects of energy and climate matters.
Although Republican prospects for halting the Biden Administration aggressive climate policy proposals are limited based on the balance of seats in Congress and control of the White House, engagement on the issue is aimed to highlight a variety of key areas. Among other topics, the minority members of Congress hosted a forum last week on the President’s cancellation of the Keystone XL pipeline project that we reported on in this column earlier this year. There are additional plans for more forums regarding the effects of Biden’s policies on impacted employees in the energy industry and consumers.
Similarly, the Democrat members of Congress have begun holding hearings this week on components of the Biden infrastructure plan. Due to the expense of the plan, the President plans to have significant tax increases, raising the corporate tax from 21% to 28%. The Democrats in the Senate have also started discussing the concept of a “vehicle miles traveled tax” to replace the gas tax. Although the idea has not been popular in the past, the administration is willing to consider it to pay for the infrastructure plan spending.
The infrastructure plan has been lauded by environmental groups but received an uncertain reception from a divided Congress. Although groups such as the Environmental Defense Fund support the plan and efforts to address climate change, the Biden Administration has not received the support of all of his party. Similarly, calls for a bi-partisan infrastructure legislation appear to be falling flat due to the expansive spending and scope of projects within the proposal.
President Biden has signaled that his massive plan will need to be paid for with additional revenues. Hence, calls to spend trillions on infrastructure, however expansively it is defined, along with significant increases in the corporate tax rates are sticking points to Congressional action on the proposal. Notably, the Biden Administration appears open to passing the legislation in the Senate through reconciliation rather than normal order which requires 60 votes. This push has lead Senator Manchin from natural gas and coal rich West Virginia to oppose both the proposed corporate tax changes and passage of the legislation through reconciliation with a mere party line vote of 50 Senators.
In addition, despite the support of President Biden’s party by labor unions, many mining, energy and pipeline workers are skeptical of the administration’s pitch for new green jobs to replace jobs linked to the fossil fuel and traditional energy sectors. As the President prepares for his virtual climate summit on April 22, his Climate Advisor Gina McCarthy and Energy Secretary Jennifer Granholm are pushing the concept that the climate proposals will lead to a net gain in jobs for the country.
While the Biden administration is selling the America Jobs Plan with a focus on investment and U.S. job creation the administration’s initial actions in office to cut the Keystone Pipeline and restrict energy development have had negative impacts on jobs in the energy sector. Nonetheless, the infrastructure plan is being touted as key to creating jobs and union opportunities. The administration has gone so far as to put out state level clean energy job sheets to show the potential for adding jobs in specific states.
The American Jobs Plan and underlying climate policies warrant serious review by the public, industry, and government partners. While it is laudable to promise solutions to climate concerns, the cost and massive scope of the Biden Administration’s transformation of the U.S. energy, power and transportation sector need to be given thoughtful and measured study before setting course that will cost trillions of dollars and thousands of jobs across the country.
For additional information about the issues discussed above, or if you have any other Environmental Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or George S. Van Nest, the author of this piece, here or at (716) 847-9105.