Opinion 3 ways America can spend Biden’s clean-energy windfall faster

The Engie Sun Valley Solar project in Hill Country, Tex. (Mark Felix/AFP/Getty Images)
4 min

Gernot Wagner is a climate economist at Columbia Business School. Julio Friedmann is chief scientist at Carbon Direct.

Building infrastructure is hard; building a trillion dollars’ worth of infrastructure within a decade, while jump-starting U.S. manufacturing and protecting fragile ecosystems, is harder still. But if President Biden’s climate finance windfall is to position the United States to lead on clean-energy jobs, trade and innovation, that building needs to start now.

The bottlenecks are at the state and local levels. Not-in-my-backyard objections; years-long environmental reviews; and the kind of cost overruns and underperformance that have resulted in a decades-long slump in productivity in the U.S. construction sector. The hundreds of billions of dollars released by the Inflation Reduction Act, the bipartisan infrastructure law, and the Chips and Science Act will clear some of this.

As to the rest of the choke points? There are three options.


Nationalize clean energy projects

The most direct and disruptive option is the least likely: Nationalize clean energy and infrastructure projects. Think: the Works Progress Administration (WPA) part of President Franklin D. Roosevelt’s New Deal.

In this (farfetched) scenario, the federal government would, by fiat, build ports and pipelines, seize land for transmission lines and renewable projects, and place charging stations for electric vehicles in every neighborhood. It would create carbon dioxide storage utilities to pump the captured CO2 and create a strategic hydrogen reserve akin to the petroleum one.

Those who want a wartime footing to address climate concerns would get just that, potentially with minimal concern for environmental impacts beyond climate or for communities at risk.

Although Roosevelt created the WPA via executive order, much of the effort here would require substantial new legislation — and bring down a hailstorm of legal challenges. That said, at least some version of such extreme options might become necessary, and perhaps politically palatable, without cheaper, easier alternatives.


Reform the permitting process

The second, more realistic option is to reform the permitting process. The drastic measures proposed by Sen. Joe Manchin III (D-W.Va.) last year are a fraction of what’s needed. Necessary reforms include preapproval for various classes of projects such as redeveloping brownfields for clean-energy production, a limit of 18 months or less for reviews, and rapidly staffing up federal agencies to conduct them.

Ana Unruh Cohen, former staff director of the House Select Committee on the Climate Crisis, counts around $1 billion in the Inflation Reduction Act to expedite permitting across agencies. It is a start.

In addition, the Federal Energy Regulatory Commission would need to become significantly more activist in siting new power lines across state borders. U.S. agencies could fast-track liquefied natural gas export terminals if they met key conditions. For example, if they were compatible with green ammonia and hydrogen export. Or if they came with a watertight contract to displace coal plants overseas, negotiated with help from the State Department and money from the Export-Import Bank.


Help local governments use federal money

The third option, while the lightest touch, might not be the slowest. This would meet and engage communities where they are. It would use federal money and staff to help local governments tap into the cash freed by the Inflation Reduction Act and bipartisan infrastructure law. A good example: the $250 million recently announced by the Environmental Protection Agency to support innovative local efforts that “tackle climate pollution.”

In addition to awarding grants, the EPA and the Energy Department, including its National Laboratories, could deploy experts en masse into communities to tackle local concerns. These wonks would not come empty-handed. They would offer solutions, ranging from tightening local pollution limits to building additional clean infrastructure or efficiency measures, with negotiated agreements not to sue. Heading off legal challenges must be part of any way forward.

Together, options two and three could both help to use federal money to meet and match NIMBYs where they are, and to build big projects fast.

The task is clear: to build — not shrink — toward a lower-carbon, more resilient and wealthier world. Time is short. The Inflation Reduction Act promised big rebates for various home retrofits, including up to $8,000 for heat pumps, $2,500 for upgrading electric wiring and $840 for induction stoves. Seven months after the bill’s passage, many households are still in the dark about when and how to get these payments.

Once the Energy Department has finalized its rules, state and local obstacles will have to be cleared — for wiring and stoves, and for trains, tunnels, solar farms and smart grids, too. All ways forward are contentious. All have challenges. To win this green industrial race, federal money must come with policy muscle that catalyzes learning-by-doing on a massive scale.