Energy and Climate Policies, Cronyism Don’t Belong in Bloated Senate Infrastructure Bill

COMMENTARY Budget and Spending

Energy and Climate Policies, Cronyism Don’t Belong in Bloated Senate Infrastructure Bill

Aug 5th, 2021 3 min read
COMMENTARY BY
Katie Tubb

Senior Policy Analyst

Katie Tubb is a senior policy analyst for energy and environmental issues in the Thomas A. Roe Institute for Economic Policy Studies.
Rep. Cori Bush and Rep. Alexandria Ocasio-Cortez rally to demand that U.S. President Joe Biden work to make the Green New Deal into law on June 28, 2021 in Washington, D.C. Chip Somodevilla / Getty Images

The infrastructure package being debated in the Senate this week weighs in at a whopping 2,702 pages and $1.1 trillion.

While the layman might think of infrastructure as roads and bridges, Washington’s definition is about as nebulous as the measures by which lawmakers are claiming they pay for the bill.

Nearly a quarter of those pages (649) are spent on energy and climate policies. Here’s a look at what is in some of them.

State ‘Carbon-Reduction’ Mandate

The climate subtitle of the bill expands the size and scope of the federal government across the spectrum with alternate-fuel corridors, grants for electric and alternative vehicle refueling stations, cost-sharing for weather-resistant infrastructure, workforce training programs, and even grants for reflective sidewalks and tree planting.

By and large, these are highly local projects that should be paid for by local residents and users, and in some cases (such as electric vehicle charging stations), they duplicate what states and the private sector are already doing.

Perhaps most significantly, Section 11403 requires states to reduce carbon dioxide emissions from highway transportation by developing state “carbon-reduction strategy” plans that must be approved by the Department of Transportation and updated at least every four years.

The bill does not indicate what environmental benefits these strategies are to achieve or what level of reductions will be required. That gives a lot of leeway to the Transportation Department to define the goal and minimal accountability to Americans as to costs and benefits of the program.

That’s a poor way to conduct environmental policy, likely will increase costs for Americans, and will have no meaningful impact on global temperatures.

The infrastructure bill also cannot be understood in a policy vacuum. The Biden administration knows it cannot do all it wants to on climate policy unilaterally, and so it has played tough negotiator to get climate policies into whatever legislative train is moving; namely, the infrastructure package and accompanying budget reconciliation package.

Even where details are nonexistent or time for due diligence is discarded, the administration and liberal Democrats are impatient to force climate legislation through so they can go to the U.N.’s November climate conference with a gleaming package of policies that prove just how committed the U.S. is to the Paris Agreement.

That’s important context for the bill’s other climate-related policies, such as the requested Environmental Protection Agency report on the “levelized cost of carbon abatement” of different electricity technologies. That’s a report that could be either doing handmaiden’s work for a federal electricity mandate or showing the major inconsistencies of the implicit carbon dioxide prices already implemented through policies such as state renewable electricity mandates.

Congress needs to remember whose job it is to do the legislating, and that it’s lawmakers’ constituents who will bear the costs of ill-conceived policies.

Cronyism in energy markets

Division D on energy incorporates Sen. Joe Manchin’s Energy Infrastructure Act, which the West Virginia Democrat introduced just last month.

While it could have been much worse (by using the force of government to shut down legitimate activities and industries, as liberal Democrats are trying to do to every stage of the oil and gas industries and their customers), it by no means is a good bill, in that it& spends exorbitantly on virtually every energy technology, fuel, and supply chain.

It relies on credits, grants, loan guarantees, federal cost-sharing programs, rebates, assistance, and federally funded research, development, demonstration, and commercialization.

The bill authorizes appropriations for the Energy Act of 2020, passed without much scrutiny in the massive omnibus spending package late last December (a trend in legislating that should be concerning to all Americans).

It spends on major programs at the Department of Energy, riddling the energy sector with cronyism and barriers to entry for companies and technologies that do not fit the federal government’s definition and mold of “innovative.”

That takes the U.S. further away from an energy sector where businesses must compete to understand and meet the needs, preferences, and choices of customers (as opposed to what is politically preferred).

It also protects certain electricity companies over customers. In particular, it repackages the nuclear power bailout attempted under the previous administration.

Competition gives customers more choices, who are increasingly interested in “green” energy options and are always interested in reducing their expenses if given the freedom to make informed decisions.

At the same time, competition forces companies to be efficient and innovative—inherently pro-environment features. Bailouts do the opposite.

Many of the energy and climate policies in the infrastructure package aren’t as overt as a mandate. But expanding the scope of government in energy markets by way of the tax dollar quietly migrates power away from customers to politicians, bureaucrats, and politically favored companies and technologies.

The infrastructure package should leave Americans with a lot to be concerned about, both for the price tag and for the opaque process through which it emerged.

This piece originally appeared in The Daily Signal