Infrastructure Investments Crucial for Future Sustainable Development

Every pundit and economic analyst is weighing in on what should be included in the next round of stimulus funding to address the economic concerns related to the COVID-19 pandemic. So far, $3 trillion has been earmarked or disbursed and a similar amount is expected if there is a next round. Some proponents are now making the case that infrastructure investments should be part of upcoming stimulus packages.

These advocates point to the American Recovery and Reinvestment Act of 2009 (ARRA) as an example of where priorities should lie. That bill contained $90 billion in clean energy investment stimulus, and was the single largest energy bill in history, invigorating the renewable energy sector and paving the way for the explosion in electric vehicles.

A group of experts the World Resources Institute (WRI) recently convened said Congress should learn from ARRA, which leveraged private sector spending to increase jobs and make the country’s infrastructure more resilient to the effects of climate change. In the 11 intervening years since the legislation passed, climate change has devastated parts of the U.S., from a run of catastrophic hurricanes to extreme flooding to wildfires, so arguably, there is more pressure now to shore up energy, water and transportation with smart infrastructure investments.

The nation’s electricity grid is far too old and is under strain

According to Sue Tierney, Senior Advisor at the Analysis Group and former Assistant Secretary for Policy at the U.S. Department of Energy, one of the keys to building resilience is a better grid. In addition, Tierney insisted that investing in renewable energy can become a job multiplier. On that point, an April 2020 study from WRI found that annual investments from $12 billion to $16 billion in electric transmission through 2030 could result in $30 billion to $40 billion in annual economic activity. And during a decade when job creation will be a huge challenge, such investments could create between 150,000 and 200,000 full-time jobs each year.

Despite the improvements we can attribute to ARRA investments, the nation’s energy infrastructure still has a long way to go. The American Society of Civil Engineers’ (ASCE) 2017 Infrastructure Report Card gave it a D+ grade, and noted that the bulk of it was built during the 1950s and 1960s with a 50-year life expectancy. In addition to anticipated increased demand for electricity to power our air conditioning under higher temperatures and more intense droughts, our current energy mix is mostly natural gas and coal, both of which are highly-water intensive resources. This puts additional pressure on already stressed water infrastructure.

Michigan is Exhibit A of the need for more infrastructure investments

The failure of two dams in Michigan this week only serves to highlight the precarious position of America’s current water infrastructure. Response to the flooding caused by the dams’ failure is compromised due to this pandemic. This crisis in Michigan is a stark reminder of what we may be facing with above-normal hurricane season this year - one which has already seen its first named storm almost two weeks before the official start of the season on June 1st.

ASCE’s latest report gave the nation’s water infrastructure a D grade, citing its age in particular. Built mostly in the early part of the 20th century with a 100-year life expectancy, we have seen devastating results of its failure as it wears out, sorely tested by extreme flooding and drought. Water is a critical input for traditional electric generation, but energy is also essential for treating, moving and distributing water. Shoring up one sector’s infrastructure improves the resiliency of the other.

Considering infrastructure investments going forward

Joe Aldy, Public Policy Professor at Harvard’s Kennedy School for Government and special assistant to President Obama for energy and environment during the 2007-2009 recession, said it is important to consider where we are today versus where we were in 2009. An infrastructure stimulus requires a “thoughtful response,” he said. “It has to go beyond emissions to approach resilience and deal with the risk of climate change”.

Such an approach will require, as it did in 2009, significant engagement with the private sector. Failing infrastructure will threaten business operations across the country and create challenges for local, state, and regional governments. One long-lasting effect of this pandemic is the severe strain it is placing on the economy. Climate change will make that strain worse. There’s an opportunity now to alleviate one challenge by taking on the other with a solid, long-term plan for infrastructure investments across the U.S.

Image credit: David Mark/Pixabay