Ideas. Action. Results.

The Green New Deal Can Coexist with a Bipartisan Infrastructure Bill

By Jake Varn, Andy Winkler

Tuesday, March 26, 2019

The Green New Deal, outlined in a congressional resolution from Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA), proposed ambitious objectives for energy and economic policy, including the goal of net-zero greenhouse gas emissions within 10 years. Though clearly aspirational, the proposal has received widespread attention and has forced climate change onto the congressional agenda. Support for such a sweeping plan has, unsurprisingly, fallen along strict partisan lines.

Setting aside its endorsement of politically polarizing policies like job guarantees and universal healthcare, the Green New Deal is an infrastructure proposal at its core—requiring the construction of smart power grids, building upgrades, and a transformed transportation sector to dramatically reduce emissions. If the political debate over the proposal’s scope, timetable, and potential cost dominates the infrastructure discussion in this Congress, it could derail progress toward a comprehensive and bipartisan infrastructure package. But that doesn’t have to be the case.

The contours of a bipartisan infrastructure deal are clear: a significant boost in investment coupled with pragmatic changes to improve asset management, facilitate public-private partnerships, accelerate project delivery, and adopt new technologies. These policies would help fix America’s critical infrastructure systems and advance the long-term goal of a decarbonized economy, while leaving the larger political fight over the Green New Deal for another day.

Resiliency and Efficiency – Two Birds, One Stone

Billions of additional dollars of investment are needed to tackle long-deferred maintenance projects and bring our nation’s roadways, waterways, and other infrastructure into a state of good repair. Funding the sector’s rapid decarbonization—as the proposal supports and if possible—would add significantly to that cost. However, there is also a significant cost to doing nothing.

There is a compelling fiscal case to be made that any infrastructure package should broadly aim to reduce emissions (both in terms of carbon and pollutants) and mitigate disaster-related risks (as detailed in the chart below).

Source: U.S. Global Change Research Program

As climate patterns shift and the impacts of extreme weather events increase, America’s $4.1 trillion worth of transportation infrastructure assets will be subject to stressors that will reduce their reliability and capacity. As just one example, 13 of the nation’s 47 largest airports have at least one runway situated within the reach of a moderate-to-high storm surge. Rising sea levels and extreme weather put these, and other critical infrastructure, at risk.

Marrying and incorporating environmental goals with infrastructure development is nothing new and does not have to be controversial. With the right incentives, tools, guidance, and funding, climate-related risks can and should be regularly incorporated into infrastructure planning and construction when building projects that may be in use for decades to come. This is also an area where both political parties have come together before. The recently passed and bipartisan Disaster Recovery Reform Act of 2018 made significant progress in this area by shifting funding towards more pre-disaster mitigation projects.

A Deal on the Table

The following policy recommendations would increase investment, create more efficient infrastructure projects, and appeal to supporters of the Green New Deal without alienating those that oppose it.

Secure robust federal funding. Above all else, America’s infrastructure is in desperate need of more funding. The current backlog of deferred maintenance did not appear overnight, but is instead the culmination of decades of underinvestment. Delaying needed infrastructure improvements has a significant public cost—older facilities may produce more emissions, break down more often, and may critically and fatally fail. To tackle deferred maintenance and build new and needed infrastructure, robust, long-term funding must be included in any infrastructure package.

Improve asset management. Governments own and manage a wide range of infrastructure assets, including:

  • Transportation infrastructure like roads, bridges, buses, ports, and airports;
  • Drinking water, wastewater, and stormwater systems;
  • Broadband networks;
  • Schools, civic buildings, and other social infrastructure; and
  • Parks and vacant land.

Yet too often, governments do not have a full and in-depth accounting of all these assets. Before billions of dollars are spent rebuilding infrastructure, the public sector needs to have a clearer understanding of the baseline conditions and infrastructure needs they have, as well as their climate-related vulnerabilities. An infrastructure package can incentivize state and local governments to complete comprehensive asset inventories as a condition of receiving assistance. Recipients of federal funding would then need an inventory of all assets into a comprehensive and centralized registry, one that includes data on every asset’s current condition, expected maintenance and operations costs through their remaining useful life, the cost of replacement, and the potential impact of a failure.

Incentivize life-cycle cost analyses. In construction, forecasting both upfront costs and long-term maintenance costs for a building or infrastructure project is called “life-cycle cost analysis.” While it may seem intuitive that project developers would want to know how much it will cost to build and keep a project in a state of good repair, and which materials will make the project the most cost effective, such analyses are far from simple. They require analyses that include (1) estimates of the probability certain hazards will occur and (2) projections of the expected damage over the lifecycle of the building.

Current practices are fiscally irresponsible and lead to inefficiencies in project design and, inevitably, poorly maintained infrastructure. Incentivizing wholesale change in how these decisions are made becomes all the more important in the context of our nation’s ongoing struggle to adapt to extreme weather and recover from deadly, damaging natural disasters. Climate risks and the probabilities of hazardous events occurring can be both life threatening and costly, directly affecting an asset’s operation and maintenance costs. Before modernizing and building new infrastructure, these costs must be accounted for in the project delivery stage.

In distributing federal funding, state and local applicants should demonstrate they have fully accounted for the long-term risks of their projects and selected the project delivery model that provides the best value over the life of the project. Because rural and disadvantaged communities often lack the resources and capacity such analyses, Congress can create a unified capacity building program for infrastructure development, either as a standalone office or within existing federal agencies, and designate specific funding for rural technical assistance.

Engage the private sector and transfer risk. The public sector should not be expected or forced to foot the bill for these investments alone. Opening the door for all viable project deliver options, including public-private partnerships, will be necessary to close the funding gap and transfer certain risks to the private sector, whose expertise and innovation can make them better suited to bear them.

As Ocasio-Cortez said on MSNBC’s MTP Daily, the types of infrastructure and transformations that would need to be developed to accomplish the Green New Deal’s goals could be done through public-private partnerships. Those partnerships can be well-suited to advance climate-related goals because contracts can include incentives and enforceable benchmarks for a private partner to deliver a particular outcome, like reduced emissions.

Along with Public-private partnerships, many jurisdictions are now considering how to use innovative financing tools like environmental impact bonds to produce specific environmental outcomes. For example, in 2017, the District of Columbia Water and Sewer Authority issued the nation’s first environmental impact bond to construct environmentally-friendly stormwater infrastructure. Following in DC’s footsteps, the city of Atlanta just announced their own $14 million environmental impact bond for six green infrastructure projects. Structured similarly to a traditional tax-exempt municipal bond, the environmental impact bond also includes payments that are contingent on infrastructure project’s ability to reduce polluted run-off. Similar bond models could be applied to projects with emission reduction goals.

Accelerate project delivery. Unnecessary delays the approval process for infrastructure projects cost money for both the public and private sectors. For example, direct costs of a project can go up dramatically if the costs of materials, supplies, or labor rise during a delay. There is also a public cost to delaying needed infrastructure improvements—for example, older facilities generate more emissions and often require more frequent and costly repairs. A report by the nonprofit organization Common Good estimated that there is a $3.9 trillion cost to delaying the start of all U.S. public infrastructure projects by six years. BPC has outlined a host of policy options for improving the environmental review and permitting process, while prioritizing better environmental and social outcomes.

Adopt new technologies. There are emission-reducing technologies and building materials currently available that have not been broadly implemented due to a lack of investment. For example, the entire wastewater sector in the United States could reduce electricity-related emissions by nearly 40 percent just by upgrading to available technologies like high efficiency and optimal speed pumps. This premise is evident across the infrastructure sector, from new electric vehicle charging stations to energy efficient street lights. If done properly, life-cycle cost analyses could drive the use of more innovative technologies as a means of reducing overall costs. Taking full advantage of the latest technologies, while funding additional research, will not only produce modern infrastructure but also lead to more cost-efficient projects and help to reduce emissions.

Don’t Wait Until 2020

Increasing investments in infrastructure remains a popular issue for both political parties and the American public. In a recent POLITICO-Harvard poll, 79 percent of Americans listed “increasing spending on the nation’s infrastructure” as a top priority for Congress—with 88 percent of Democrats supporting it and 81 percent of Republicans.

At the moment, the Green New Deal is a marker in this debate. But it is a vision, not a plan. It lacks both the legislative specificity needed to be immediately acted upon and a viable path toward passage in this Congress.

In the meantime, passing an infrastructure bill that improves the planning process, accelerates project delivery, expands funding and financing options, and leverages the best available technologies can remain bipartisan while still making progress on emission-reduction goals.

KEYWORDS: INFRASTRUCTURE