We Need Build Back Better’s Climate Investments—for the Economy, Equity, and the Planet
October 13, 2021
By Rhiana Gunn-Wright, Kristina Karlsson
Recent debates surrounding the Build Back Better package have centered narrowly on the $3.5 trillion topline spending number and on which programs will survive negotiations with holdouts who want to decrease that amount. And unsurprisingly so: Reconciliation is a budgetary process that focuses strictly on how to allocate—or eliminate—funding in the federal budget. Moving money is the assignment. But it is crucial that we do not lose sight of the many individual investments behind the numbers, and what is at stake if those investments are whittled down or eliminated—especially when it comes to the climate crisis.
Investing in robust climate action would begin to reverse the trajectory of climate disaster, catalyze the transition to a green economy, and promote equity. Defending the dollars currently allocated for climate programs will therefore determine not only the success of our economy but our own survival—and particularly that of our most vulnerable Americans.
Drought, heavy precipitation, and heat waves, among other climate-related disasters, have already ravaged the US and the globe this year. If greenhouse gas emissions continue to rise and we surpass crucial climate tipping points, the frequency and severity of these disasters will only increase. The most important question now—especially at a time when interest rates are near zero and public investment is cheaper than ever—is not “what can we afford to spend?” It’s “what happens if we spend too little?”
Climate Investments Are Crucial for Our Economy—and Our Survival
As Roosevelt Fellow David Arkush writes in a recent Roosevelt Institute report:
One of the more comprehensive studies finds that warming of 4°C would yield economic damages of $23 trillion annually by 2100. But recall that scientists believe it is possible that 4°C of warming could result in the death of most humans. Given that projection, a better approximation of potential economic damage is surely closer to $88 trillion, the size of the global economy.
Understanding the link between climate and our economy—and our survival—is crucial to grasping the extreme urgency of passing powerful climate policy. As policymakers consider their responsibility to protect and nourish the economy, they must keep in mind that climate disaster will threaten everything that our economy relies on, including natural resources, political stability, and health. We cannot afford not to invest in a comprehensive and fast-acting climate policy package.
The Build Back Better plan currently allocates roughly $1.24 trillion to climate policy spending. This investment would mark a crucial turning point in US climate policy, would send a strong signal to the rest of the world that it is in our economic interests to address climate immediately, and would serve as a down payment on the essential mobilization to reorient our economy over the next few decades. A federal investment of this size in climate could also tackle parallel issues of inequality and outsized corporate power, and could lay the groundwork for long-term industrial shifts. It is paramount that all $1.24 trillion in climate funding remain in the package until its passage.
At the Right Scale and Structure, Climate Investments Can Restore and Promote Equity
If done right, the climate investments in the Build Back Better agenda would be a crucial step in repairing legacies of environmental injustice, preventing deepened environmental racism, and blunting the inequitable effects of climate change. The Justice 40 initiative set forth in Executive Order No. 14008 mandates that 40 percent of all climate investments be allocated to disadvantaged frontline communities that have historically borne the brunt of climate impacts. Environmental justice advocates like the United Frontlines Table are rightfully asking that this be increased to a minimum of 50 percent. If successfully incorporated in the Build Back Better agenda, this dedicated investment carve-out to benefit frontline communities will set a new precedent not just in environmental policy but in federal policymaking as a whole and could benefit scores of communities for generations.
The White House Environmental Justice Advisory Council is also asking policymakers to commit to “doing no harm” in line with the Justice 40 mandate—no climate investment should work against historically harmed communities. This would require redistributing funding that is currently allocated for false solutions—carbon capture technology, nuclear energy, biofuels, waste incinerators—that would disproportionately harm frontline communities and facilitate the continued use of fossil fuels.
Public Investment Is Necessary for a Green Transition
Private markets alone are not equipped to deliver the transformation our economy requires to transition to clean and renewable energy at the speed necessary to maintain a livable climate. While private investment in green energy and infrastructure will undoubtedly play a significant role in reversing the trajectory of greenhouse gas emissions, the public investments in clean energy deployment, building retrofits, clean manufacturing supply chains, and workforce development in the Build Back Better plan are crucial to setting the stage for a green transition.
Left alone, many corporations, asset managers, and even pension funds have continued to invest in fossil fuels, actively inhibiting emissions reduction. Others that have made proclamations and commitments to achieve “net-zero” or to “green” their portfolios have acted slowly, if at all. Furthermore, even investments from the private actors most dedicated to ushering a green economy are limited by the very nature of shareholder investment timelines and access to funding. The federal government, on the other hand, has the coffers, credit, and power to spend at the scale we need and to push unwilling corporate actors to move in the right direction.
Passing the full $1.24 trillion climate investment in the Build Back Better plan is non negotiable. Climate change is not a “risk” that can be mitigated or set aside; it is an active and increasing danger to the health of our society and economy. In debates over what is “possible” to spend, policymakers must remember that our lives and the existence of our economy depend on acting boldly and investing now. There is no economy on an uninhabitable planet.