Introduction and summary
States, local governments, and tribal nations have long been leaders in taking meaningful action to confront the climate crisis, advance environmental justice, and embed high-paying union jobs in the transition to a clean energy economy.1 Even before the Trump administration’s withdrawal from the Paris Agreement, subnational governments stepped up to be the face of U.S. climate action. State, local, and tribal governments have taken important strides to deploy renewable energy, conserve public lands, prioritize environmental justice, and support high-quality clean energy jobs. With the passage of the more than $1 trillion Infrastructure Investment and Jobs Act (IIJA)—also known as the bipartisan infrastructure law—the opportunity exists for states and a committed federal government to work together to confront the climate crisis with the urgency and ambition needed. Doing so will require action from across the country, from all sectors of the economy, and from every community. Simply put, the federal government cannot implement this monumental task alone.
Under the IIJA, action on climate change is possible, but it will require states to swiftly and holistically apply for and then deploy federal funds with the goal of maximizing reductions of greenhouse gas (GHG) emissions. Despite large investments in climate opportunities, the IIJA nonetheless has the potential to increase GHG emissions if it is not implemented with a focus on climate-friendly programs. For example, if funds are deployed primarily on highway expansion, increased emissions are a predictable result.2As state, local, and tribal governments prepare to implement clean energy and climate resilience projects, the federal government must consider how these investments can unlock continued and even greater climate leadership—and be leveraged to reduce emissions to the greatest extent possible. However, passing the Biden administration’s proposed tax credits—such as those for clean energy and electric vehicles (EVs)—remains critical3 to cutting economywide emissions and meeting the administration’s climate commitments.4
In this critical moment for climate and clean energy implementation, federal officials should engage with states to maximize opportunities for efficient and effective federal funding deployment. While implementing President Joe Biden’s complete climate agenda would take critical steps to reduce U.S. emissions anywhere from 45 percent to 51 percent of 2005 levels by 2030,5 the bipartisan infrastructure law offers substantial potential for climate-focused investments in states.
It is critical that the federal government seize the moment presented by the IIJA to offer coordinated interagency support to subnational governments in implementing their climate efforts.
States are well positioned to lead in this effort, and it is critical that the federal government seize the moment presented by the IIJA to offer coordinated interagency support to subnational governments in implementing their climate efforts. The Biden administration has several mechanisms already in place or under consideration to support state, local, and tribal government actions on climate.
With an influx of funds from the federal government to states, the Biden administration continues to execute a whole-of-government approach and engage with subnational governments. For example, the U.S. Departments of Energy (DOE) and Transportation (DOT) recently announced the formation of the Joint Office of Energy and Transportation (JOET) to support building out a national EV charging network by providing technical assistance to states.6 The JOET recently launched driveelectric.gov to organize the resources offered to states and stakeholders to support EV charging deployment, zero-emission fueling infrastructure, and zero-emission transit and school buses.7 The U.S. Environmental Protection Agency (EPA) also published updated state-level GHG emissions data to help states track climate trends and identify opportunities to reduce GHG emissions.8
In addition, following the passage of the IIJA, President Biden appointed former New Orleans Mayor Mitch Landrieu (D) as senior advisor and infrastructure coordinator for its implementation.9 In this new role, Mayor Landrieu will oversee funding allocated for upgrading roads, bridges, pipes, and broadband internet as it is distributed to states.10 Recently, Mayor Landrieu sent letters to U.S. governors urging them to appoint infrastructure coordinators in their states along with an infrastructure task force modeled after the Infrastructure Implementation Task Force established by the White House in November 2021. Gov. Asa Hutchinson (R-AR) and Gov. Lujan Grisham (D-NM) have already taken action in those areas.11
At the end of January, the Biden administration announced the Building Performance Standards Coalition, a nationwide effort to facilitate the delivery of cleaner, healthier, and more affordable buildings. The coalition’s partners account for 20 percent of the country’s building footprint through the two participating states—Colorado and Washington—along with 31 cities across the country.12 According to a White House press release announcing the effort, the administration aims to facilitate “new commitments to design and implement building performance standards at the state and local level, create good-paying, union jobs, lower energy bills for consumers, keep residents and workers safe from harmful pollution, and cut emissions from the building sector.”13 The DOE and EPA jointly mobilized under this effort to provide technical assistance as the administration and local governments seek to convene local policy teams. Together, these teams will support policy plan development to meet President Biden’s goal of upgrading 4 million buildings and 2 million homes by 2024.14
Building on the announcements made by the administration in Glasgow, Scotland, at COP26, the White House is currently exploring an intergovernmental affairs working group within the National Climate Task Force (NCTF) that would be focused on subnational and nonfederal engagement.15 This working group would inform and collaborate with existing NCTF working groups, possibly forming a permanent network for strategic planning and climate priorities, embracing a true interagency effort to meet climate goals at the speed climate change demands and focusing on the lived experiences of the American people.
Underscoring the complexity of meeting the Biden administration’s expressed commitment to climate action, a recent study by the Georgetown Climate Center found that transportation funding from the bipartisan infrastructure law could, without careful and intentional planning, increase GHG emissions if funds are spent on highway expansion and new roadway construction, resulting in increased traffic pollution.16 However, if state, local, tribal, and federal partners work in coordination to deploy IIJA funding for maintenance of existing roadways, EV infrastructure, and other low-carbon transportation options, the law could reduce emissions and play a role in meeting President Biden’s goals for a net-zero future. As this example shows, how states implement funds will determine whether the bipartisan infrastructure law increases or decreases carbon emissions17 and if meaningful progress is made on achieving clean energy goals. If IIJA funds are not implemented through the lens of reducing emissions, the law has the potential to ultimately increase carbon emissions because many programs provide options to fund fossil fuel-powered technology or projects that increase vehicle miles traveled (VMT).
With the future of President Biden’s proposed $550 billion in clean energy tax credits uncertain,18 it is imperative that state implementation prioritize IIJA projects that advance emission reduction strategies.
Federal actions to construct systems that support subnational climate efforts and program implementation are supported by early signs of engagement. In early December 2021, at the State-to-Federal Coordination Roundtable hosted by the Center for American Progress and Hua Nani Partners, representatives from the White House, DOE, DOT, and EPA met with state climate officials to discuss how specific IIJA programs can potentially reduce GHG emissions and increase climate resilience. This initial convening around the bipartisan infrastructure law along with the administration’s other coordination efforts suggest a serious federal commitment to strengthening state-to-federal coordination.
At the end of January, the Biden administration launched a bipartisan infrastructure law guidebook and an online information hub at Build.gov.19 The guidebook is intended to be continually updated and serve as a “one stop shop” for subnational government officials, community members, and stakeholders to find the latest detailed information on programs under the BIL. The guidebook is also available in a sortable format so programs can be filtered by eligible recipients, funding topic, administering agency, and other program particulars. In a little more than 100 days after the IIJA was signed into law, the Biden administration has already launched new offices and initiatives, updated guidance for various programs, and released the first rounds of funding for state, local, and tribal governments.20
The IIJA offers new opportunities to meet decarbonization goals
The bipartisan infrastructure law includes new programs that can be leveraged to support subnational climate and clean energy goals. With around $550 billion in federal funding for these new programs, state, local, and tribal governments have an abundance of opportunities to invest in new climate projects.21 Some of the largest buckets of funding for subnational governments will be distributed through the DOT, DOE, and EPA. Across all federal agencies, there is a commitment to a whole-of-government approach to climate. Where there are programs that do not explicitly address climate or clean energy, there must be a shared commitment across the administration to identify how to substantially reduce GHG emissions and strengthen climate resilience in every way possible.22
Disadvantaged communities, including predominantly communities of color and low-income communities, bear the greatest consequences from the effects of climate change. The Biden administration made its commitment to environmental justice clear through the Justice40 Initiative, which has the stated goal of allocating 40 percent of the overall benefits from federal climate and clean energy investments to disadvantaged communities.23 The administration also established a White House Environmental Justice Advisory Council, composed of environmental justice leaders and academics from across the country. The Justice40 targets have yet to be fully met; however, the bipartisan infrastructure law contains major funding provisions that will help the country reach the Justice40 goal. For example, 25 percent of Black and Hispanic Americans live within three miles of a superfund site, which are highly contaminated areas designated for cleanup. The IIJA includes $21 billion for the EPA to clean up superfund sites, brownfield sites, abandoned mines, and orphan wells.24 Moreover, competitive funding opportunities under the $1.2 billion Brownfields Remediation Program will be announced in the spring of 2022.25
The DOT also received $1 billion over a five-year period to administer the Reconnecting Communities pilot program, which aims to address the legacy of racism in highway construction. It includes funding to help reconnect communities separated by highways as well as funds for the planning, design, demolition, and reconstruction of street grids, parks, or other infrastructure.26 The DOT anticipates opening applications for this funding in the second quarter of 2022.27 The IIJA also commits large investments in public transit, weatherization assistance, clean drinking water, and lead pipe removal that will have multiple co-benefits. Communities disproportionately affected by climate change will greatly benefit from these investments.
Every transportation decision is being thought of as a climate decision.
While these funds will go a long way toward combating environmental injustice, the IIJA contains several components that environmental justice leaders have flagged as problematic—primarily the National Environmental Policy Act (NEPA) “rollback provisions,” which some advocates fear will allow projects that may affect their communities to skate past the full environmental impact review (EIR) process. Additionally, some programs created under the IIJA are not funded at the level needed to fully address the problems related to past highway construction. And while the Reconnecting Communities program is a step toward remedying division caused by highway construction, the funding falls short of meeting the needs of low-income communities and communities of color harmed by highway construction.28 However, the Biden administration’s Justice40 commitments total $160 billion, representing a substantial investment for environmental justice that dwarfs the investments in the BIL.29
The majority of funding from the bipartisan infrastructure law funds the Department of Transportation,30 and a spokesperson for the DOT stated that every transportation decision is being thought of as a climate decision.31 In 2022, the IIJA will increase the DOT budget by around 50 percent, with almost 40 new grant programs, many of which are climate-related.32 Currently, the DOT is still determining the precise timeline for states to apply for these programs. To modernize what has been traditionally strictly highway funding—totaling $350 billion,33 a majority of which goes directly to states—the DOT is considering the use of categorical exemptions to build bike paths and pedestrian walkways to implement “complete streets” that make biking and walking safer, inducing less reliance on personal vehicles and reducing transportation emissions. A categorical exemption is a provision within NEPA’s EIR process that allows for a shortened environmental review for projects that are deemed unlikely to have a negative impact. When complete EIRs are required to build complete streets, this adds significant time and cost to these projects. Because complete streets are an important tool in reducing VMT, avoiding additional complications to breaking ground on federally funded projects that could reduce GHG emissions would be a very positive step for DOT projects.
The IIJA unlocks even greater EV ambition by making EV charging infrastructure an eligible project category for myriad existing federal aid highway programs.
The IIJA allocates $7.5 billion for EV infrastructure, including $5 billion appropriated for the National Electric Vehicle Infrastructure (NEVI) Formula Program and another $2.5 billion appropriated for the Charging and Fueling competitive grant program.34 The NEVI program largely allocates grants targeted to alternative fuel corridors, which consist of the Interstate Highway system and other arterial highways designated by individual state DOTs. The Federal Highway Administration’s (FHWA’s) guidance states that “as infrastructure must be located along designated corridors, States should review designated Alternative Fuel Corridors and consider nominating additional corridors, prioritizing the Interstate Highway System first, in the current round of Request for Nomination.”35
Additionally, the IIJA unlocks even greater EV ambition by making EV charging infrastructure an eligible project category for myriad existing federal aid highway programs, including the National Highway Performance Program, the Surface Transportation Block Grant Program, and many more.36 Additionally, DOT will develop standards and procedures for the technicians responsible for building and maintaining charging stations, as well as for EV charging station interoperability and network connectivity.37
The charging and fueling discretionary funding under the IIJA is divided into two distinct programs, each with $1.25 billion in funding: the Corridor Charging Grant Program and the Community Charging Grant Program. The guidance for these programs has not been released. The community charging grants will prioritize building charging stations in rural areas; low- and middle-income neighborhoods; and communities with low ratios of parking spaces to households or high concentrations of multiunit dwellings.38 The competitive grants for corridor charging will likely focus on public EV fast charging along interstates, similar to the NEVI program, but eligible uses will also include nonrenewable alternative fueling along highway corridors. Therefore, the GHG impact of this grant program will also depend on states’ decisions regarding what types of fueling or charging infrastructure they apply for.
To implement the broader EV charging program strategy, the DOT and DOE have set up the Joint Office of Energy and Transportation to coordinate work and distribute the $7.5 billion for EV infrastructure.39 The priority for this effort is to accelerate the effective deployment of a convenient, reliable, affordable, and equitable national network of charging stations.40 This undertaking from the secretary of energy and secretary of transportation further demonstrates the Biden administration’s commitment to a whole-of-government approach to climate. Most critically for states, the JOET will provide technical assistance to states and localities to deploy EV charging infrastructure and deliver necessary data and tools to help states develop EV charging plans. The JOET will also play a critical role in offering federal support to interstate and regional EV infrastructure coordination, as well as support projects in line with the administration’s Justice40 commitments. States are already showing eagerness to communicate across government units. For example, the governors of Illinois, Indiana, Michigan, Minnesota, and Wisconsin created the bipartisan Regional Electric Vehicle Midwest Coalition in September 2021 to coordinate construction of the national charging network.41
In line with their strategy to demonstrate visible progress, the Biden administration and the DOT have emphasized the need to move funds out the door expeditiously to start construction on charging stations.42 Demonstrating quick progress can address EV range anxiety—fear of running out of power on a trip—and illustrate that the infrastructure exists to allow Americans to transition to EVs.
There are several new programs funded under the IIJA and administered by the DOT to address consumer barriers to EVs and improve the resiliency of the nation’s transportation infrastructure. These include:
Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation (PROTECT) ($8.7 billion)
As one of the larger buckets of funding the DOT received under the BIL, the PROTECT program supports states’ efforts to improve the resiliency of transportation infrastructure.43 Funds from the program are split into $7.3 billion of formula funding and $1.4 billion of competitive set-aside grants over five years for resilience improvements at the state and municipal levels. Funding under this program can be used to improve the resiliency of natural infrastructure such as wetlands, flood plains, and aquatic ecosystems.44
Carbon Reduction Program ($6.7 billion)
This program falls within the Federal Aid Highway Program and will deliver formula funding to states for energy-efficient transportation projects.45 Potential projects could include electrifying truck stops, public transportation, on- and off-road pedestrian and bicycle infrastructure, and energy-efficient street lighting.46 The program also provides funding for states to develop carbon reduction strategies to reduce emissions across the transportation sector.
National Electric Vehicle Infrastructure Formula Program ($5 billion)
Over the next five years, the DOT will allocate $1 billion per fiscal year to support states to deploy EV charging infrastructure and establish an interconnected, national charging network to facilitate data collection, access, and reliability.47 On February 10, the FHWA and JOET released NEVI Formula Program guidance with more detailed information on funding timelines and processes, planning requirements, project eligibility, program administration, and technical assistance. The guidance specified that states must submit state EV infrastructure deployment plans to the JOET by August 1, 2022, to receive NEVI funds. Plans will then be approved by the FHWA no later than September 30, 2022.48
Charging and Fueling Grant Program ($2.5 billion)
This discretionary grant program is broken up into two separate programs for EV charging and alternative fueling (hydrogen/propane/natural gas) infrastructure: community charging grants for projects in public spaces and corridor charging grants for projects along designated alternative fuel corridors and in communities.49 Each program will have $1.25 billion in funding.50 These programs seek to address range anxiety and support state, local, tribal, and territorial governments constructing charging infrastructure. The DOT is directed to support the strategic deployment of publicly accessible EV charging infrastructure—as well as hydrogen, propane, and natural gas infrastructure—along designated corridors or in other locations that improve accessibility.51 The DOT is currently soliciting comments on program design on an ongoing basis.52
The Safe Streets and Roads for All Discretionary Grant Program ($5 billion)
This program can be used by state and local governments for bicycle and pedestrian infrastructure and is therefore one of the programs most focused on reducing VMT by getting Americans out of their cars. Recent studies have concluded that the United States cannot affect transportation GHG emissions sufficiently to meet Paris Agreement targets without reducing VMT by 20 percent—and more to meet emissions goals—even with ambitious EV adoption scenarios.53 During the coronavirus pandemic, cities that created protected bike lanes saw a direct linkage to overall increased cycling by commuters,54 demonstrating that making cycling safer with designated infrastructure is a key enabler of VMT reduction. The Urban Institute recently concluded that driving alternatives build equity outcomes, and more walkable communities reduce the amount of GHG emissions per mile traveled.55 Applications for this funding are expected to open in spring 2022.56
Congestion Relief Program ($250 million)
The bipartisan infrastructure law establishes a congestion relief program to provide competitive grants to states, local governments, and metropolitan planning organizations for projects in large urban areas to advance innovative, integrated, and multimodal solutions to congestion in the nation’s most crowded metropolitan areas.57 The goals of the program are to reduce highway congestion and related economic and environmental costs, as well as to optimize existing highway capacity and usage of transit systems that provide alternatives to highways. The DOT should consider how this program can be leveraged to decrease GHG emissions and allow for funding to be put toward making areas more walkable, bikeable, and oriented for public transit. The FHWA has an open request for information on IIJA programs within its purview, including the surface transportation block program.58
In addition to new opportunities to invest in EV infrastructure and resilient transportation, the bipartisan infrastructure law includes several new programs to spur investment in the nation’s grid infrastructure. The IIJA provides more than $20 billion to establish the new DOE Office of Clean Energy Demonstrations and support clean energy technology projects, including grid-scale energy storage.59 In January 2022, the Biden administration announced the Building a Better Grid initiative, which is targeted at engaging with community and industry stakeholders to support upgrading the nation’s transmission lines and grid infrastructure.60 This initiative specifically includes early collaboration with states, tribes, and local governments.
States often lack capacity to adapt to extreme weather events and respond to constituents in crisis from flooding, hurricanes, wildfires, and droughts, putting resiliency on the back burner. The increase in scale and frequency of extreme weather events highlights the need for a swift transition to a net-zero power sector and power grid that can withstand natural disasters. For example, in Michigan, during the second week of August 2021, more than 700,000 customers of Consumers Energy—the public utility providing electricity and natural gas to nearly 7 million Michiganders—were without power during extreme thunderstorms and flooding in the Lower Peninsula.61
The intersection between natural disaster resilience and clean energy transmission planning requires both state agency-specific improvements and cross-agency coordination. The IIJA contains several programs for states that aim to strengthen grid resilience and build transmission systems to better withstand natural disasters. It allocates more than $27 billion in grid spending through 2026. A few critical IIJA investment opportunities aimed at states include:
Upgrading Our Electric Grid and Ensuring Reliability and Resiliency Program ($5 billion)
This bucket of funding, disbursed through the DOE, will provide federal financial assistance for states to demonstrate innovative approaches to transmission, storage, and distribution infrastructure to harden resilience and improve reliability.62 The program seeks to demonstrate new approaches to enhance regional grid resilience implemented through states by public and publicly regulated entities on a cost-shared basis.63 The IIJA mandates $1 billion in funding for rural or remote areas. In line with the administration’s whole-of-government approach, the IIJA directs the secretary of energy to collaborate with the Department of Homeland Security, the Federal Energy Regulatory Commission, and the North American Electric Reliability Corporation to develop a framework to assess the resilience of the nation’s energy infrastructure. Cooperative agreements or grants will fund the program, with applications anticipated to open in the fourth quarter of 2022.64
Transmission Facilitation Program ($2.5 billion)
Similar to the EPA’s Drinking Water and Clean Water Revolving Loan programs,65 this DOE program creates a revolving loan fund that allows the DOE to serve as an “anchor tenant,”66 meaning that the DOE agrees to procure a substantial number of transmission lines to ensure commercial viability for new or upgraded transmission lines by entering into capacity contracts (no more than 50 percent of total capacity of line for no more than 40 years) with transmission project owners and builders.67 While the $2.5 billion will not necessarily cover construction on many transmission lines, this program has the potential to kickstart state efforts and provide initial support. The limitations of this program further encourage the DOE to be selective in identifying priority areas.
Additionally, the EPA received funding from the IIJA that can be leveraged for climate projects. While previously not considered a major grant-making agency, there are new EPA grants that will specifically support state climate and clean energy goals. Under the Clean School Bus Plan, the EPA received $5 billion to begin decarbonizing the nation’s school bus fleet. This program builds on the existing Diesel Emissions Reductions Act program that has worked in the school bus space for many years.68 The IIJA gives new priorities and a new set of tools to allocate funds under the program.
School bus funding will be distributed through grants, rebates, and to eligible contractors, which allow for-profit and nonprofit entities to sell clean school buses and maintain equipment. Tribes are included under this program and are able to directly benefit. This program has the ability to fund up to 100 percent of the cost of bus replacement and building charging and fueling infrastructure. Half of the $5 billion allocated is earmarked for pure electric, zero-emission buses, and the other half is for low-emission buses, which could be fossil-fueled or electric. Each year, $500 million will be available exclusively for electric school buses, and $500 million will be available for electric and/or cleaner alternative fuel buses.69 The EPA is still developing its implementation guidelines and considering how to distribute funds in a way that does not burden states and tribes. The agency has stated its commitment to prioritizing high-need local education, rural, and low-income applications with cost share under the five-year program. Some of the provisions are likely to change over the next five years as the program adapts to the needs of states and tribes.
The EPA will allow school districts to purchase cleaner alternative fuel buses based on a number of factors, which may include local conditions and concerns, including the length of bus routes; overall cost parity; and more. While an electric bus currently costs around $300,000 to $400,000,70 and a diesel bus costs one-third of that, electric school buses are cheaper to operate over their lifetimes,71 and thus, this upfront purchase assistance will save school districts money in the long term while reducing GHG and criteria pollutant emissions. This program can also help drive down the overall cost of electric buses by increasing demand while the federal government funds the replacement cost.
The ultimate goal is to have as many electric buses on the road as possible by the end of 2026. The EPA is continuing education and outreach to learn from state projects to best support the implementation of this program. Transitioning the nation’s school bus fleet toward a zero-emission future will take time and investment from states and the federal government, but this program can build a strong foundation for further investment while reducing GHG emissions and improving air quality for children, who are currently being exposed to toxic diesel fumes while riding the bus.72 The more states chose to fund electric school buses—rather than propane or cleaner diesel—the greater the impact on GHG emissions they will have. School buses are generally in service for more than a decade, meaning the procurement choices made today will affect emissions in the long term.73 Therefore, states should be encouraged to focus their procurement on electric buses.
The IIJA reauthorizes funding for existing programs
In addition to creating and funding new programs that can be leveraged to meet state, local, and tribal climate and clean energy goals, the bipartisan infrastructure law reauthorized funding at greater levels for many existing programs. The IIJA includes up to $108 billion over five years allocated to the DOT for transit,74 with $66 billion in funding for programs to improve public transit infrastructure and reduce GHG emissions by investing in passenger rail.75 One of the key existing transportation funding programs that received new funding in the IIJA is the Low or No Emission Vehicle (LowNo) program.76 State, local, and tribal governments can apply for competitive grants for the purchase or lease of zero-emission and low-emission transit buses, including acquisition, construction, and leasing of required supporting facilities such as charging, fueling, and maintenance facilities. As this funding allows states to either support the purchase of zero-emission buses or natural gas buses, the emissions benefits of this program will also be highly dependent on state implementation. Notably, natural gas buses reduce criteria pollutants but do not offer the same GHG emissions benefits as zero-emission buses.77
Another existing DOT program receiving additional IIJA funding is the Build America Bureau, which functions as the bank of the DOT. The IIJA funded two new programs within the bureau. The Rural and Tribal Assistance pilot program will receive $10 million over five years to support rural state, local, and tribal governments with technical, financial, and legal advisory services for feasibility studies, environmental review, preliminary engineering, and revenue forecasting.78 The IIJA also allocated $100 million for technical assistance grants for asset monetization projects to support state and local governments with pre-implementation costs.79
With states facing compounding crises from catastrophic extreme weather events and the coronavirus pandemic, exacerbated by struggles to rebuild the economy, there is significant need to both adapt to climate change and become more resilient to its impact. Across sectors, from industry to agriculture, states are looking to embed strategies to reduce GHG emissions through energy efficiency and weatherizing buildings and homes. Several programs funded under the IIJA address the need for states to interconnect major clean energy systems and weatherize buildings to be more resilient. These increased funds for weatherization offer opportunities for states to invest in GHG reduction strategies in the buildings sector and encourage further action from the federal government. Leveraging new funds to bring down the cost of energy-efficient weatherization can push stronger action from the federal government and support the transition to a net-zero future. These resiliency and adaptation programs include:
Weatherization Assistance Program ($3.5 billion)
This competitive grant program administered by the DOE aims to reduce household energy costs by providing funding to states for the purposes of resilience, energy efficiency, renewable energy, and grid improvements.80
Smart Grid Investment Matching Grant Program ($3 billion)
First established under the Energy Security and Independence Act of 2007, the program requires that eligible investments must provide flexibility and help quickly rebalance the electrical system; facilitate the aggregation or integration of distributed energy resources; provide energy storage to meet fluctuation; provide voltage support; integrate intermittent generation sources; increase the network’s operational transfer capacity; and anticipate and mitigate impacts of extreme weather events or natural disasters on grid resilience.81 The bipartisan infrastructure law also adds eligibility for the deployment of technologies that would allow for increased flexibility in responding to natural disasters, fluctuating demand, and other events necessitating a quick rebalance of the grid system.
Building Resilient Infrastructure and Communities (BRIC) program ($1 billion)
The BRIC program provides funding for community-level hazard mitigation projects to improve resilience to extreme weather events.82 These competitive grants are available for state, local, and tribal governments to apply for funding to support pre-disaster mitigation projects.83
Energy Efficiency and Conservation Block Grant ($550 million)
The IIJA84 amended previous legislation to allow funding to be used for financing energy efficiency and clean energy investments, projects, loan programs, and performance contracting programs.85 The first round of funding is expected to be released in the fall of 2022.86
State Energy Program (SEP) ($500 million)
The SEP provides funding and technical assistance to states, territories, and the District of Columbia to enhance energy security, advance state-led energy initiatives, and maximize the benefits of decreasing energy waste. The IIJA amended previous legislation to add a transmission facilitation requirement to state energy conservation plans (states must consider these needs when planning).87 The federal government also waived the 20 percent match stipulation for states, which posed a significant challenge to states already strained for resources—many from responding to climate disasters—and for states that lack legislative support for climate infrastructure projects.
Addressing resilience not only includes energy efficiency and weatherization, but also access to clean drinking water. Under the BIL, the EPA will receive more than $50 billion dollars to invest in water systems across the country.88 With several grant programs offering funding for water infrastructure, there are ample opportunities to invest in both new and existing programs.
On December 2, 2021, the EPA announced the first tranche of funds going out to states to support revitalization of water systems. The agency will allocate $7.4 billion to states, tribes, and territories for 2022, with about half of those funds available as grants or principal forgiveness loans.89 This first wave of funds in 2022 is part of the $50 billion that will be allocated to states, tribes, and territories over the next five years through state revolving funds.90 Accompanied by this announcement was a letter from EPA Administrator Michael S. Regan to governors that reiterated this historic investment, as states will play a critical role in how funds are deployed, and the EPA is looking to gubernatorial leadership to identify priority communities to receive funding.91 The investment includes $15 billion for lead replacement and $23.4 billion for the Clean Water and Drinking Water State Revolving Fund, and the rest is distributed among per- and polyfluoroalkyl substances (PFAS) funds and location-specific funds.92 Guidance issued via an EPA memo in March 2022 stipulated that at least 40 percent of funds from the State Revolving Fund be allocated to disadvantaged communities, in line with the Biden administration’s Justice40 commitments.93
The IIJA commits to good union jobs
President Biden has made it abundantly clear that climate policy should always mean the creation of high-quality, union jobs. This was the case when he developed and announced his Build Back Better agenda and when he successfully negotiated the bipartisan infrastructure law, which includes some very important wins for working people—guaranteeing that new jobs will pay decent wages and benefits, creating pathways into good jobs for people from all walks of life, and boosting domestic manufacturing.94 The announcement of Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants under the IIJA evidences that commitment. At the end of January, the first wave of 2022 RAISE discretionary grant funding was announced, with $1.5 billion available.95 Prioritization will be given to projects that lift up disadvantaged communities and support quality workforce development, such as ensuring workers have the free and fair choice to join a union and the usage of project labor agreements. To ensure the cohesive vision of climate, justice, and jobs remains intact, the administration will need to continue to ensure that IIJA implementation abides by the high standards already set and that states meet and exceed those standards for good, union jobs.
State, tribal, and local governments are on the front lines of the climate crisis. These subnational government entities bear witness to the climate-exacerbated disasters that have severely affected individual lives, entire communities, and the economy. Climate-influenced disasters also inflict disproportionate harm on communities already burdened by pollution, poverty, and a legacy of racial injustice. Effectively responding to climate change therefore requires addressing these compounding issues. The confluence of crises demands a coordinated, ground-up response led by state, local, and tribal governments, with assistance from the federal government.
Subnational governments responded to these crises during periods absent of federal leadership—particularly helping to fill the void left by President Donald Trump’s destructive actions on climate—by taking steps to reduce emissions from the energy, transportation, buildings, natural resources, and industry sectors. To continue their leadership on climate action, states can deploy federal funds from the IIJA to pursue climate action and push the federal government to be more ambitious. Moreover, it is imperative that states ensure that IIJA funds are used to the greatest extent possible for climate action and to carry the torch on climate in the event an administration hostile to climate policy comes into office again in the future.
The federal momentum for climate action through the IIJA and the Biden administration’s climate agenda grew from decades of subnational leadership. The Biden administration must further encourage that leadership by directly engaging with state, local, and tribal governments and uplifting their climate agendas through increased investments under the BIL. The federal government must seize the opportunity to leverage federal funds to unlock the highest-ambition subnational climate action possible.
The authors would like to give special thanks to Trevor Higgins, Kevin DeGood, Mikyla Reta, and Mike Williams.