Two Bills, One Climate: Breaking Down the Climate Provisions in the “Hard” and “Soft” Infrastructure Bills

Environment Policy Brief # 125 | By: Jacob Morton | August 22, 2021

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Policy Summary

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On August 10, the Senate passed the $1 trillion bipartisan “hard infrastructure” bill, which directs a significant portion of its funding to various climate action provisions. Meanwhile, Democrats in Congress have taken it upon themselves to propose a much more aggressive $3.5 trillion budget resolution (aka the “soft infrastructure bill”) to effectively “overhaul the country’s climate, childcare, and health care laws through the budget reconciliation process.”

The “budget reconciliation process” is a special process, or tool, by which a budget resolution is proposed in the House of Representatives, and if passed, is sent to the Senate, where unlike most bills, only requires a simple majority (50 votes) to pass, cannot be stalled by a filibuster, and does not require the President’s signature. A “budget resolution” is basically a blueprint, established by Congress, to guide what the Federal government, as a whole, should set as its targets for income and spending over the next 5 to 10 years (in other words, what the Federal budget should be). A budget resolution that passes the reconciliation process, is not a law, but rather, a revision of how much money Congress can spend and where it can spend it.

Many Democrats in Congress feel the bipartisan “hard infrastructure” bill, which provides $1 trillion in funding, falls far short of what is actually needed to fund what they consider to be necessary infrastructure for the country. With this specific budget resolution, Democrats are proposing to reach beyond the 1 trillion dollars provided by the bipartisan bill, and side-step its conservative limitations, by re-writing the Federal government’s budget all-together. The process (“reconciliation”) could allow congress to spend an additional $3.5 trillion on a more robust package of infrastructure improvements and policies.

Essentially, congressional Democrats are hoping to take advantage of their majority in both chambers by using the “budget reconciliation process” to rewrite the Federal government’s budget to allow for even greater spending on issues that fall under a definition of “infrastructure” much broader than that accepted by Republicans in the bipartisan bill. The “hard infrastructure” bill, having passed its vote in the Senate now sits again in the House of Representatives where “Speaker Nancy Pelosi and a majority of the nearly 100-member Progressive Caucus have said they will not vote on it unless and until” Senate Democrats pass the $3.5 trillion budget resolution.

While we wait and see how these congressional battles play out, let’s take a look at the climate provisions included in the bipartisan “hard infrastructure bill” and those that have been included in the Democrat’s proposed budget resolution – the “soft infrastructure bill” – and what those provisions mean for Americans and our global commitment to fighting climate change.

Policy Analysis

Within the $1 trillion bipartisan bill, various climate provisions are included, and have been allocated over $300 billion in funding. The bill includes $47 billion to strengthen and increase the resilience of community infrastructure to the impacts of climate change, such as extreme weather events. This will support and expand efforts already underway or planned, as well as fund new approaches, such as “next-generation water modeling activities and flood mapping at the National Oceanic and Atmospheric Administration, which would also receive funds to predict wildfires.”

$65 billion is devoted to modernizing a “smart” and “clean” electricity grid and expanding clean energy transmission capabilities. This includes investment in “grid-balancing technologies” to ensure that “clean” electricity is also reliable electricity; and $2.5 billion given to the Department of Energy (DOE) to enter “capacity contracts” with transmission developers that will “backstop their projects if there is insufficient demand for renewable energy.”

$6 billion is allocated for advanced nuclear reactor projects and to bolster struggling nuclear reactors. Plus, over $10 billion will be invested in carbon capture and storage technologies, with over $300 million of those dollars intended specifically for power plants; $8 billion for “clean hydrogen” research and demonstration; and around $5 billion “for projects that demonstrate innovative approaches to transmission, storage, and distribution infrastructure to harden and enhance resilience and reliability.”

Photo taken from: The New York Times

“Carbon capture and storage” refers to the process of capturing carbon dioxide (CO2) emissions (usually from power plants and other heavy industry) before they are released into the atmosphere, and then transporting and storing that CO2, often in an underground geological formation. Injection of CO2 deep into the earth has been done for several decades, often as a tool for extracting even more oil from already tapped wells (aka enhanced oil recovery), but long-term storage of captured CO2 is a relatively new concept and its value as a climate change mitigation strategy is still debated.

In addition to funding, the bill gives the DOE authority to designate “national interest electric transmission corridors,” allowing the Federal Energy Regulatory Commission to overrule states on power line regulations and where they can be placed. As well, the bill directs the secretary of energy to conduct a study on job losses associated with President Biden’s decision to cancel the Keystone XL Pipeline.

The bill also includes $7.5 billion to develop electric vehicle charging stations across the country, though that is only half of the $15 billion President Biden had originally requested; and another $7.5 billion for clean buses and ferries, though experts say, “that is not nearly enough to electrify about 50,000 transit buses within five years, as Mr. Biden has vowed to do.” Other provisions found in the bipartisan infrastructure bill include:

• $39 billion to improve public transit options, plus an additional $66 billion invested in rail to fund much needed maintenance to Amtrak’s rail system and upgrades to the high-traffic Northeast Corridor from Washington to Boston. This investment is intended to improve safety, efficiency, provide more transit options, and ultimately encourage more people to utilize public transit.

• $17 billion to be spent on reducing greenhouse gas emissions from trucks at port facilities and airports.

• $21 billion to plug oil wells that are still leaking methane gas and to clean up abandoned mines.

• $15 billion for removing lead water service lines across the country; though this falls far short of the $45 billion President Biden had originally proposed and the $60 billion water sector leaders are saying is actually needed to get the job done.

• Funding for various pet projects around the country, including “$1 billion for the restoration of the Great Lakes, $24 million for the San Francisco Bay, $106 million for the Long Island Sound and $238 million for the Chesapeake Bay.”

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Though this is a significant investment in clean energy, the bipartisan bill contains only a fraction of the money President Biden had originally requested for major environmental initiatives. Additionally, many House progressives and environmentalists argue the bill simply “extends a lifeline to natural gas and nuclear energy.” For instance, Leslie Kaufman, senior climate reporter for Bloomberg news, points out that “Many of the bill’s provisions are on the oil industry’s wish list. The proposed legislation has more than $10 billion for carbon capture, transport, and storage, along with $8 billion for hydrogen—with no stipulation that the energy used to produce it comes from clean sources.”

According to Mother Jones News, “clean hydrogen,” as written in the bipartisan infrastructure bill, likely refers to what is known as “blue” hydrogen, which “involves splitting gas into hydrogen and carbon dioxide and then capturing and storing the CO2 to ensure it doesn’t heat the planet.” The process, however, releases methane gas, “and uses a huge amount of energy to separate and then store the carbon dioxide, some of which escapes anyway.” According to a recent study published in the Energy Science & Engineering journal by researchers at Cornell and Stanford University, the production of “blue” hydrogen may actually create more greenhouse gases than burning coal or diesel.

Investing in hydrogen power as a potential alternative to traditional energy production, is not a blatant handout to fossil fuel companies in and of itself. According to Mike Fowler with the Clean Air Task Force, “[hydrogen] appears to be critical for decarbonization of ‘hard-to-electrify’ sectors such as long-haul heavy trucking, international marine shipping and some parts of heavy industry.” The problem lies, however, in the fact that a cleaner form of “green” hydrogen exists, “producing hydrogen from water with only renewable energy” instead of fossil fuels, but the bipartisan bill fails to explicitly direct its funding to that form of hydrogen power; likely to appeal to fossil fuel interests held among members of the Senate, as a compromise to secure votes for passing the bill.

Photo taken from: The Wall Street Journal

Carroll Muffett, chief executive of the Center for International Environmental Law, says, “We look at that bill and see massive giveaways to fossil fuel infrastructure that is incompatible with serious climate action.” Muffett adds, “Congress went out of its way to not specify ‘green’ hydrogen and so this funding just helps prop up the fossil fuel industry. The potential of these technologies is being routinely overstated even as the impacts are being understated.”

Climate action groups such as 350.org and Sierra Club, further criticize the bipartisan bill for giving a brand-new liquid natural gas plant in Alaska “billions in loan guarantees, while other waivers in the bill will weaken environmental reviews of new construction projects.” Natalie Mebane, Policy Director at 350.org, says of the bill, “Our Senate missed a major opportunity… While they could have led the way to a clean energy future, they chose to pour billions into the false promise of carbon capture and storage, further locking us into decades of new fossil fuel infrastructure which will ensure planetary and community devastation.” Mebane added, “Instead of facing the climate crisis, the Senate has chosen to invest billions into propping up the fossil fuel industry.”

Though skeptics warn of the nefarious compromises hidden within this bill (and the important details left out), the bipartisan work to pass it through the Senate is an accomplishment on its own. Nor is the bill entirely unpopular; a Harvard CAPS-Harris poll found that 70% of Americans support the “hard infrastructure” bill, and a poll by the Yale Program on Climate Change Communication “found 67% support among registered voters for a ‘major investment in the nation’s infrastructure.’” As Tracy Raczek, Senior Climate Advisor to the former U.N. Secretary General Ban Ki Moon, says, “When you look at greening infrastructure, greening cement, greening houses, retrofitting houses, truly transitioning our entire economy, you have an incredible job opportunity,” adding, “this is a middle-income job boom possibility.”

But while the bipartisan “hard infrastructure” bill is at least, a step forward, it certainly leaves much to be desired as far as doing what is necessary to prevent the planet from warming to an unmanageable degree. After all, the originally proposed bill was whittled down from $2.6 trillion to just $1 trillion. As Democratic Representative from New York, Jamaal Bowman says of the bill, “Though it includes important investments in hard infrastructure like our roads and bridges, it vastly underfunds public transit, [electric vehicles], and grid infrastructure,” measures vitally necessary to addressing the climate emergency.

It is precisely because of these shortcomings that Democrats in Congress have proposed the $3.5 trillion budget resolution, aka the “soft infrastructure” bill, with a particular emphasis on “social infrastructure;” an attempt to fill in the gaps left behind by the compromises made in the bipartisan bill. The proposed plan, presented to the Senate on August 9 by Majority Leader Chuck Schumer and Senator Bernie Sanders, is expected to be officially drafted by Democrat-led committees by September 15. Though the bill addresses issues ranging from creating universal pre-K and tuition-free community college, to lower prescription drug costs and immigration and border security, it also proposes significant funding for climate and energy programs across several industries. Here is a breakdown of the funding allocated to the committees tasked with drafting climate-related policies included in the $3.5 trillion budget resolution:

• Energy and Natural Resources Committee ($198 billion): To be used towards a clean electricity incentives program for utility companies; consumer rebates to weatherize and electrify homes; financing for domestic manufacturing of clean energy and auto supply chain technologies; federal procurement of energy efficient materials; climate research; research infrastructure for DOE National Labs; Hard Rock mining; and Department of Interior programs.

• Agriculture, Nutrition, and Forestry Committee ($135 billion): For agricultural conservation, drought, and forestry programs to help reduce carbon emissions and prevent wildfires; clean energy investments; agricultural climate research; and Civilian Climate Corps funding. The funds allocated to this committee, however, must also be shared with programs that advance child nutrition and debt relief.

• Commerce, Science, and Technology Committee ($83 billion): For investments in technology and transportation; National Science Foundation research and technology; and coastal resiliency and healthy oceans investments, including funding for the National Oceans and Coastal Security Fund.

• The Environment and Public Works Committee ($67 billion): For low-income solar and climate-friendly technologies; clean water affordability and access; healthy ports and climate equity; EPA climate and research programs; federal investments in energy efficient buildings and green materials; Appalachian Regional Commission; investments in clean vehicles; and a methane polluter fee to reduce carbon emissions.

• Homeland Security and Governmental Affairs Committee ($37 billion): For electrifying the federal vehicle fleet (USPS and non-USPS); electrifying federal buildings; federal investments in green materials; and resilience. The funds allocated to this committee must also be shared with border management investments and improvements to our cybersecurity infrastructure.

• Indian Affairs Committee ($20.5 billion): For Native energy programs; Native resilience and climate programs; and a Native Civilian Climate Corps. The funds allocated to this committee are also to be used towards Native health, education, and housing programs and facilities, as well as BIA programs and Native language programs.

Photo taken from: Public News Service

One component of the budget resolution that is particularly noteworthy, is the proposed clean electricity incentives program for utility companies, originally referred to as the National Clean Energy Standard. The standard would be similar to the renewable energy requirements that have already been adopted by 30 states, but instead of being a regulation, it will be structured as an incentive. The Committee on Energy and Natural Resources has been tasked with drafting the legislation (as part of the $198 billion budget the committee has been instructed to allocate), but now with a new name, the Clean Electricity Payment Program. Instead of simply requiring utility companies to use clean energy sources, the federal government will pay them to use clean energy.

Democratic Senator from Minnesota, Tina Smith, says the payment program “would encourage utilities to add cleaner electricity generation like wind and solar,” and “because [the federal government] is paying utilities to add clean power, it allows us to keep utility rates stable,” thus it won’t raise customers’ electric bills or their taxes. Adoption of the program could also mean lots of new construction jobs in the zero-carbon electricity industry.

Sam Thernstrom, chief executive officer of the bipartisan, nonprofit Energy Innovation Reform Project, however, says, “energy standard legislation would not qualify for the reconciliation plan,” because “any legislation in that package must be related to taxes, spending or debt policy.” Thernstrom adds that even if the program did qualify, “Because reconciliation limits a bill’s reach to 10 years, a clean energy standard passed through budget reconciliation could be scrapped after a decade.”

Though the intention behind the legislation may be positive, environmental groups worry that producers of fossil fuel generated electricity who simply install carbon capture systems will be considered “clean energy.” Jeff Brady, with NPR news, points out that “Both infrastructure packages include support for carbon-capture systems that likely would be installed on gas or coal power plants.” As Natalie Mebane with 350.org continues to argue, funding carbon-capture systems for fossil fuel producers is unacceptable; “It is an excuse for the fossil fuel industry to continue existing and polluting our world.”

While the true impact of this budget resolution will certainly be determined by those contentious details, Senator Bernie Sanders argues that not only will this “be the most consequential piece of legislation for working people, the elderly, the children, the sick, and the poor since FDR and the New Deal of the 1930s, … It will also put the U.S. in a global leadership position to combat climate change and make our planet healthy and habitable for future generations.” Even so, Sanders admits the $3.5 trillion resolution “doesn’t go as far as it should, but it is a major step forward in transforming our energy system away from fossil fuel to energy efficiency and sustainable energy.”

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Convincing all 50 democrats in the Senate to vote for the budget reconciliation, however, may prove difficult. Senator Joe Manchin of West Virginia, for instance, represents one of the most coal-rich states in the country and is often a hard sell on any new climate or energy policy. Senator Kyrsten Sinema (D-Arizona) has stated that she opposes the level of spending in the bill, and other Democrats have expressed similar reservations. In the initial agreement reached by Senate Majority Leader Chuck Schumer and the White House, it is stated that the $3.5 trillion will be “fully offset by a combination of new tax revenues, health care savings, and long-term economic growth.”

The agreement, however, “prohibits new taxes on families making less than $400,000 per year and on small businesses and family farms.” A draft of the final bill should be presented around September 15, along with an initial vote. Meanwhile, Nancy Pelosi and progressive House Democrats say they will not pass the pending $1 trillion bipartisan infrastructure bill until the Senate passes the $3.5 trillion budget reconciliation.

Engagement Resources​

Click or tap on image to visit resource website.

350 (350.org) – Standing up to the fossil fuel industry to stop all new coal, oil and gas projects and build a clean energy future for all. 350 is an international movement of ordinary people working to end the age of fossil fuels and build a world of community-led renewable energy for all.

Center for International Environmental Law (CIEL.org) – Since 1989, CIEL has used the power of law to protect the environment, promote human rights, and ensure a just and sustainable society.

Sierra Club (Tell Congress to act!) – There is a very narrow path to limiting warming to 1.5 degrees Celsius … and that path is rapidly closing.

Tell Congress to pass a bold infrastructure bill to help avoid global climate catastrophe!

References

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Bhatia, A., & Bui, Q. (2021, July 28). The infrastructure plan: What’s in and what’s out. The New York Times. https://www.nytimes.com/interactive/2021/07/28/upshot/infrastructure-breakdown.html?action=click&pgtype=Article&state=default&module=styln-stimulus-biden&variant=1_show&region=MAIN_CONTENT_1&context=STYLN_TOP_LINKS_recirc.

Cochrane, E. (2021, August 10). Senate passes $1 trillion Infrastructure Bill, Handing Biden a Bipartisan win. The New York Times. https://www.nytimes.com/2021/08/10/us/politics/infrastructure-bill-passes.html.

Cochrane, E., Flavelle, C., & Rappeport, A. (2021, August 3). What’s in the $1 trillion infrastructure bill. The New York Times. https://www.nytimes.com/2021/08/02/us/politics/infrastructure-bill.html.

Brady, J. (2021, August 11). Proposed clean ENERGY standard could end power PLANT greenhouse gas emissions by 2035. NPR. https://www.npr.org/2021/08/11/1026831067/proposed-clean-energy-standard-could-end-power-plant-greenhouse-gas-emissions-by.

Korte, C. (2021, July 26). Democrats hope to pass a clean ENERGY standard that will force utilities to go green. CBS News. https://www.cbsnews.com/news/clean-energy-federal-standard-democrats/.

Memorandum to Democratic Senators, RE: FY2022 Budget Resolution Agreement Framework (reconciliation instructions). (2021, August 9). https://www.democrats.senate.gov/imo/media/doc/MEMORANDUM%20for%20Democratic%20Senators%20-%20FY2022%20Budget%20Resolution.pdf

Michelson, J. (2021, August 17). Will current infrastructure bills avert dire un climate forecast? Forbes. https://www.forbes.com/sites/joanmichelson2/2021/08/17/will-current-infrastructure-bills-avert-dire-un-climate-forecast/?sh=4b4ad46457cd.

Milman, O. (2021, August 13). Infrastructure bill includes up to $8 billion for “CLEAN” tech worse than coal. Mother Jones. https://www.motherjones.com/environment/2021/08/joe-biden-infrastructure-bill-blue-hydrogen-worse-than-coal-study-emissions-climate-change/.

Treene, A. (2021, August 9). Senate Democrats release $3.5 trillion budget resolution. Axios. https://www.axios.com/senate-democrats-budget-resolution-86d24aea-38a0-4ec2-847f-f9dbd1c7d59f.html?utm_medium=partner&utm_source=verizon&utm_content=edit&utm_campaign=subs-partner-vmg.

What the budget resolution is, and isn’t. The Government Affairs Institute at Georgetown University. (n.d.). https://gai.georgetown.edu/what-the-budget-resolution-is-and-isnt/.

Wilkins, B. (2021, August 10). Bipartisan infrastructure bill rebuked for funding false climate solutions. Common Dreams. https://www.commondreams.org/news/2021/08/10/bipartisan-infrastructure-bill-rebuked-funding-false-climate-solutions.

Johnson, J. (2021, August 9). Sanders hails $3.5 trillion resolution as Most ‘Consequential’ proposal since the New Deal. Common Dreams. https://www.commondreams.org/news/2021/08/09/sanders-hails-35-trillion-resolution-most-consequential-proposal-new-deal.