Decarbonizing America’s infrastructure
Of the $550 billion in new spending included in the Infrastructure Investment and Jobs Act ("the Act"), roughly a third calls for investments in clean energy, power and transport; drinking water systems; weatherizing; and energy efficiency initiatives.
Companies should note that the Act:
Prioritizes a cleaner, more resilient US power supply. Investments support electric grid modernization and transmission networks to foster wider adoption of renewable energy as well as allocations for nuclear and hydropower.
Aims to advance national energy/power authority. As an example, the Act would bolster the ability of the Federal Energy Regulatory Commission to overrule states in siting and permitting for project development of electric transmission lines in some instances. Streamlining planning and siting is a key issue for utilities seeking to enable more investment in transmission.
Calls for investing in clean energy technologies, such as energy storage, hydrogen, and carbon capture and storage (CCS). The Act supports development of clean hydrogen hubs as well as direct air capture (DAC) hubs, among other initiatives.
The message for business
Washington continues to craft how it will support the US transition to a clean economy. The Act emphasizes reliability in its provisions to modernize and secure the nation’s power and energy infrastructures. Other environmental, social and governance (ESG) priorities will likely see more attention as momentum shifts to additional tax and spending proposals under a reconciliation bill. For their part, companies are attuned to growing interest in addressing climate change. More than half of consumers (57%) we recently surveyed on ESG say that companies should be doing more to advance environmental issues. Looking further, the Act defines common ground among Democrats and Republicans that could be pursued in future infrastructure spending.
Modernize
Billions of federal dollars are allocated to road, bridge, rail and other modernization projects, with significant implications for businesses that depend on this infrastructure.
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Decarbonize
The provisions signal that the drive toward a more sustainable economy powered by low-carbon alternatives—including wind, solar, hydropower and nuclear—is bipartisan and considered to be in the national interest.
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Secure
Cybersecurity is not optional. The bipartisan deal allocates funding for governments to upgrade their networks, and invests to better secure power and water infrastructures.
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Fund new infrastructure
The infrastructure agreement draws on unused pandemic relief funds, strengthened tax enforcement for cryptocurrency and other offsets for funding.
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