Tying Labor Standards to Clean Energy Incentives: How Biden’s Department of Energy Tackled Climate Industrial Policy

Table of Contents

• Executive Summary
• Introduction: The Biden Administration’s Climate Industrial Strategy and Good Jobs Agenda
• Successes and Lessons from the Biden Administration’s Climate Industrial Strategy
  • Successes
  • Lessons

Executive Summary

The Biden administration ushered in the most ambitious era of US industrial policy since the New Deal and the most significant climate legislation on the planet, stimulating investments that would onshore the production and deployment of key technologies essential to the global reduction of greenhouse gases. While not enough to overcome other political forces, this “industry-led, government-enabled” labor- and equity-oriented strategy worked functionally and economically as designed and provides critical lessons for advancing climate policy in the US and elsewhere.

Through landmark legislation—the Inflation Reduction Act, the CHIPS and Science Act, and the Bipartisan Infrastructure Law—the federal government reasserted its role in shaping markets and guiding investment, sparking a green industrial boom. The use of grants, loans, and tax credits defined a modern industrial strategy—one that unleashed record-breaking investments and sought to rebuild the economy “from the bottom up and middle out.” In addition to the economic agenda, these investments sought to assert American climate leadership not only by investing in the domestic commercialization and scaling of emission-reducing technologies, but by doing so in a way that would build and strengthen the constituencies that would make clean energy deployment more durable and future climate policy possible.¹

Drawing on the author’s experiences at the US Department of Energy (DOE), this paper is the first in a series illustrating where Biden-era pro-worker climate policies have succeeded, where they have fallen short, and what that means for future climate, economic, and industrial policy. This first paper examines how the Biden administration steered the private sector toward green industry and shared prosperity and offers a case study on how the DOE strategically reorganized to operationalize a bold, climate-oriented, worker-friendly industrial strategy. The second paper will reveal the outcomes of these efforts while highlighting key challenges and remaining opportunities. The final paper will provide examples of the spillover effects and expound on forward-thinking solutions for building an economy that meets the needs of working people and the planet.

In the Biden administration, the DOE transformed from an agency focused on energy research and development (R&D) and nuclear defense to one also focused on advanced energy deployment at scale. This transformation coincided with the Biden administration’s good jobs agenda, which implemented a three-layered demand-driven strategy: crowd in² investment in the US to expand employment in the energy sector, condition funding on high labor standards, and incentivize firms to invest in workers and training pathways. Taken together, these policy innovations sought to make high-road, place-based, and climate-aligned investment not only possible—but irresistible and irreversible.

Tying climate action to jobs was not new, but the approach the Biden administration pursued represented a marked departure from past approaches emphasizing green job training. The administration placed far greater emphasis on job creation, labor standards, and employer investment in earn-as-you-learn training—efforts to grow the demand for skilled labor in the energy sector and pull workers into and upward in the labor market. 

The Biden administration’s approach derived from an intentional agenda and clear priorities as well as operational pivots in the face of legislative setbacks and legal constraints. The result was implementation driven largely by incentives rather than mandates or new legislative authorities. Implementation meant using, to the maximum extent, legal and regulatory tools that already existed, as well as executive actions to clarify priorities and drive agency action.

While early actions, commitments, and reporting show extremely promising results, particularly in the crowding in of capital and acceleration of the maturation of technology, the final effectiveness of the incentive-based approach to achieving emission reductions and socioeconomic and labor outcomes should be assessed after (not at the beginning of) implementation, when real outcomes can be measured. A 10-year program of tax incentives to reduce emissions 43–48 percent below peak levels, build infrastructure, and onshore supply chains has only just begun. Throughout the Biden administration, there was an ever-present awareness that transformation of the American economy would take more than a single term, and the goal was to demonstrate enough early benefits across red, blue, and purple states to fortify the plan against political opposition. 

Complicating the analysis of outcomes from Biden-era efforts are Trump administration actions to cease data collection, withhold funding, pause and cancel projects, reduce staffing, revoke executive orders, and signal that certain standards set by Biden agencies will not be enforced. Although some Biden-era workforce efforts have been partially realigned with Trump administration priorities, it remains unclear to both funding recipients and outside observers which initiatives will continue.

Introduction: The Biden Administration’s Climate Industrial Strategy and Good Jobs Agenda

The Biden administration pitched its Investing in America industrial strategy to the American people as “bottom-up and middle-out economics,” a philosophical and values-based framework that highlighted broad benefits for working- and middle-class families.³ Folded into this was a “blue-collar blueprint to rebuild America” with an explicit focus on leveraging once-in-a-generation investments in infrastructure and industry to grow good union jobs, with a direct pathway to the middle class for workers without a college degree. President Joe Biden would often say in his speeches, “the middle class built America, and unions built the middle class.” Aiming to be the most pro-labor president in US history, President Biden was outspoken and consistent in his endorsement of labor unions and desire to grow their ranks.

This bottom-up, middle-out blueprint used clean energy and climate as the vehicles for broader economic and geopolitical goals: national security, US competitiveness, energy security, good jobs, and equity. Clean energy supply chains and critical minerals were strategic assets for reshoring industrial production and bolstering national security. Clean energy innovation and manufacturing would position the US to capture an advantage in the projected $23 trillion global market for clean energy (DOE 2021) and enhance US global competitiveness. Investing in a wide range of clean energy technologies would support energy resilience and affordability in the face of 21st-century energy challenges (e.g., severe weather, ever-increasing demand, geopolitical energy disruptions). A climate focus that stimulated investment and growth—rather than demanding sacrifice—supported the growth of good, mostly blue-collar, union jobs. The Justice40 Initiative and the Interagency Working Group on Energy Communities supported place-based investments that would correct for past inequities, ensure a just energy transition, and drive investment to communities that needed it most.

When Biden became the Democratic nominee for president, he assembled a general campaign platform that drew from the best ideas of his competitors in the Democratic primary—platforms that reflected the work of a wide range of stakeholders and took lessons from past policy failures—to develop a far more integrated, intersectional policy program. Building upon Jay Inslee’s Evergreen Action Plan, the momentum behind the Green New Deal,⁴ and input from a wide range of environmental, labor, and community stakeholders, candidate Biden’s climate platform was rooted in good jobs and equity principles. 

On the labor side, President Biden promised to be the most pro-worker, pro-union president in US history, with the campaign goals of passing the Protecting the Right to Organize Act (PRO Act), the most sweeping proposed reform to US labor law since the National Labor Relations Act of 1935, as well as raising the minimum wage, banning captive audience meetings, establishing “card check” as the default for union recognition, and banning “right-to-work” laws (Biden 2024a). These climate and labor ambitions were folded into the Build Back Better agenda, a $3.5 trillion package, which included a $775 billion human infrastructure plank to bolster caregiving and education. The Build Back Better Act included labor reforms and support, including restrictions on union-busting activities and mandatory captive audience meetings, neutrality requirements, tax deductible union dues, $350 million for the National Labor Relations Board, $5 billion for registered apprenticeships, and additional support for labor-management training programs (HR 2021). 

During negotiations, much of the original worker-centered agenda was pared back after the American business community mobilized against it (Elrod 2024). To secure votes for an infrastructure package, the Biden administration removed all mention of taxes as well as $400 billion for long-term care, $424 billion for clean energy tax credits, $326 billion for affordable housing and public schools, and $566 billion for domestic manufacturing and research and development. What remained in the Infrastructure Investment and Jobs Act (aka Bipartisan Infrastructure Law (BIL)) was a $1.1 trillion package ($550 billion over 10 years in new spending plus $650 billion in reauthorized existing funding) for electric power distribution and energy projects in addition to roads, bridges, airports, ports, water, and broadband. The BIL included Davis-Bacon provisions⁵ but lacked labor standards for industries beyond construction.

Most of the rest of the Biden climate agenda⁶ passed through the Inflation Reduction Act (IRA) via budget reconciliation, which is a procedure that bypasses Senate filibuster rules and allows measures to pass with a simple majority. The reconciliation process cannot be used to pass policy items unrelated to the federal budget, so many of the labor reforms envisioned by Biden as a candidate, and gutted from BIL, including the PRO Act, could also not be advanced through reconciliation. But, for the first time labor standards were tied to tax spending: prevailing wage and apprenticeship bonuses quintupled the value of clean energy tax credits, and domestic content and location bonuses for low-income and energy communities also increased the value of credits. While these were far more limited tools than the sweeping labor law reforms and deep investments in caregiving and social infrastructure that had originally been envisioned, they were still groundbreaking and part of a broader strategy to ensure the energy transition was also a worker empowerment initiative.

Parallel to these legislative efforts, President Biden issued several executive orders. Signed within his first week in office, Tackling the Climate Crisis at Home and Abroad(EO 14008) created the Justice40 Initiative to ensure that benefits of climate-related investments flow to disadvantaged communities and declared 10 times the imperative of retaining and creating good union jobs. The Made in America executive order strengthened Buy America provisions to “help American businesses compete in strategic industries and help America’s workers thrive” (EO 14005). Signed in April, EO 14026 raised the minimum wage for federal contractors to enhance productivity by boosting workers’ health, morale, and effort (EO 14026). EO 14025 established the White House Task Force on Worker Organizing and Empowerment (also known as the Worker Empowerment Task Force), chaired by Vice President Kamala Harris, with Labor Secretary Marty Walsh as vice chair (EO 14025). The task force delivered over 70 recommendations, including encouraging project labor agreements and registered apprenticeship targets in federal investments. In November 2021, Biden issued EO 14052 to guide implementation of the Infrastructure Investment and Jobs Act (aka the Bipartisan Infrastructure Law), to drive the creation of good-paying union jobs and ensure workers have a free and fair chance to join a union (EO 14052). 

Complementing the executive orders, significant interagency collaboration to share resources and best practices led to a wide array of agency actions. In early 2022, the Department of Labor (DOL) launched the Good Jobs Initiative to guide agencies on how to incorporate job quality measures such as fair pay, career pathways, and access for underserved communities into funding and procurement criteria. This was a significant operational pivot after the workforce development funding to expand DOL’s programs envisioned in Build Back Better was eliminated. Under this initiative, DOL signed memoranda of understanding (MOUs) with several agencies, including DOE, to work together to confront climate change and economic insecurity by aligning efforts “to attract, train, retain, and empower diverse, qualified, well-compensated workers to jobs in clean energy infrastructure and supply chains” (US DOE and US DOL 2022). An update to the Worker Empowerment Task Force recommendations in March 2023 highlighted agency progress, noting that agencies like DOE had begun embedding job quality standards into BIL- and IRA-funded programs through Community Benefits Plans (CBPs). 

Far from acting on its own, [the Department of Energy’s] integration of wage standards, training partnerships, and labor-management collaboration through [Community Benefits Plans (CBPs)] reflected a clear operationalization of congressional intent, backed by executive directives. DOE’s labor-focused initiatives were part of a coordinated federal effort to translate narrowed legislative priorities into concrete, pro-worker implementation of Biden’s industrial-climate policies.

This context matters for understanding DOE’s approach to labor provisions in its discretionary programs. Far from acting on its own, DOE’s integration of wage standards, training partnerships, and labor-management collaboration through CBPs reflected a clear operationalization of congressional intent, backed by executive directives. DOE’s labor-focused initiatives were part of a coordinated federal effort to translate narrowed legislative priorities into concrete, pro-worker implementation of Biden’s industrial-climate policies.

A Departure from Past Green Jobs Plans

Before Biden, both Presidents Bill Clinton and Barack Obama linked the imperative of addressing climate change to the opportunity for economic growth and job creation. In 1993, at a White House conference on climate change, President Clinton unveiled a plan that “gives us a chance, a very, very good chance to reduce greenhouse gases, grow our economy, and create a new high-skill, high-wage job base in America” (Clinton 1993). President Obama consistently linked clean energy and emission-curbing technology to job creation and supported green jobs initiatives both through federal agencies and under the American Recovery and Reinvestment Act (ARRA). While both Clinton and Obama talked about the job creation potential of domestic clean energy innovation and investments and the need to drive market development (Clinton 1993; Obama 2011),⁷ Obama’s green jobs efforts centered around education and training. In his view, the promise of good green jobs would be realized by closing workers’ skills gaps (Obama 2012).

It can be useful to think about jobs policies and interventions in terms of labor market supply and demand. Supply-side strategies focus on managing the supply of labor through training programs, which pull workers out of the labor market when demand is low (Kleinman Center for Energy Policy 2023), and preparing the workforce to respond to changing markets or technologies (Zabin and MacGillvary 2020). Demand-side strategies—job-creating investments, wage standards, skill requirements, etc.—shape the demand for labor. A healthy workforce system coordinates and calibrates labor supply (training) to demand (job availability) to support continuity and stability of the industries served—outcomes that benefit employers and workers alike. This is the calibrated training provided by union-sponsored registered apprenticeship programs: training only as many people as there are job openings.⁸ 

Not only does a supply-side strategy risk training workers for jobs that do not exist or creating “skills gaps” that are misaligned with real industry needs, an oversupply of workers relative to demand (i.e., jobs available) tends to strengthen employer leverage, suppress wages, and reduce investment in retention. Policies that expand the demand for workers (relative to supply) tend to strengthen worker bargaining power and support higher wages and other retention strategies by elevating competition between employers. A demand-driven strategy supported by industry-aligned training pathways can deliver both better jobs for workers and more appropriately skilled, stable workforces able to support high-performance industries.

Gordon Lafer’s The Job Training Charade (2002) critiques the supply focus of US federal job training programs. From the 1960s, as part of broader neoliberal reforms after recessions and high unemployment, policymakers shifted from public job creation to privately managed “training” schemes as a way to avoid addressing systemic economic problems. While myriad examples exist of life-altering training programs for individuals, a policy focus on job training tends to blame economic immobility on workers and their skill gaps instead of on corporate practices, declining labor standards, or economic policy choices. 

Under ARRA, green jobs training programs faced significant criticism for training far more workers than there were available jobs, for lacking standardized curricula and clear industry alignment, and for producing minimally qualified workers who struggled to find stable employment (US GAO 2013; Potts 2010). Implementation was chaotic and fractured, and success depended on preexisting relationships and social infrastructure capable of building pathways to employment (Kleinman Center for Energy Policy 2023). The oversupply of trained workers may have also depressed wages, increased job precarity, and resulted in long-term recruitment difficulties in clean energy industries like solar (Jones, Philips, and Zabin 2016). 

Learning from this, the original Build Back Betterproposal included substantial funding for both demand- and supply-side workforce interventions—industrial and infrastructure investments and labor standards to drive demand for skilled workers and workforce education and training funding (Bashay 2021) totaling $35 billion to augment skilled labor supply (Krishnamoorthi 2021). The legislative debates around Build Back Better and the subsequent narrowing of workforce funding in the enacted bills, however, meant that, in practice, the Biden administration’s climate jobs strategy tilted heavily toward a demand-driven approach, relying on investments with strong labor standards to pull workers into and upward in clean energy–sector employment. This was a notable departure from previous US federal jobs initiatives. 

Without the explicit workforce investments originally envisioned in Build Back Better, DOE and other agencies had to use their program investments to advance workforce goals under their procurement authority, integrating labor standards and workforce development into funding programs. Relative to past efforts, this approach was favored by labor unions representing workers in construction and manufacturing industries, because it tied federal funding to labor standards for the specific funded projects where the jobs were actually materializing rather than simply producing a surplus of trained workers for the industry writ large. 

“…the Biden administration’s climate jobs strategy tilted heavily toward a demand-driven approach, relying on investments with strong labor standards to pull workers into and upward in clean energy–sector employment.”

Beyond providing a more targeted, demand-driven approach to “green job” training, efforts in the Biden administration also sought to correct for a structural problem in clean energy deployment, in that the wages and precarious working conditions, particularly for solar, aligned more with the low-wage service sector than public works or energy sector construction.⁹ The Obama approach exacerbated this issue, and without correcting for it, the clean energy transition would continue to erode job quality in the energy sector rather than supporting a bottom-up, middle-out economic transformation. 

While the objective was not primarily to transition to a demand-side “green jobs” strategy, it was a useful pivot for addressing core Congressional and administration objectives: to expand higher quality, union jobs in emerging energy sectors, to retain high quality jobs in energy and energy intensive industries, and to ensure that federal investments were delivering to working people. 

Agencies were tasked with finding ways to do this within the legislative and legal constraints. Reflecting these objectives and constraints, the Department of Energy’s labor provisions under the BIL and the IRA used laws already in the books and the dollars provided to the private sector for infrastructure and supply chain projects. DOE addressed workforce supply concerns within the funded projects through the Community Benefits Plan, which required that employers consider upfront their workforce needs and develop strategies to attract, train, and retain the workers they would need. In a departure from past efforts, it put the onus on employers to ensure workforce continuity rather than relying on the “train-and-pray” model that invests public money in training with the hope that trained workers find their way to gainful employment. 

Successes and Lessons from the Biden Administration’s Climate Industrial Strategy

Successes

After decades of policy setbacks, a government-led, labor- and equity-centered, incentive-oriented approach finally broke through gridlock on the climate crisis. A broad coalition of labor, equity, environmental, and clean energy advocates pushed for what became the most consequential climate legislation in the world, bringing the US within striking distance of its Paris Agreement commitment: reducing emissions 50 percent below peak levels by 2035 (Bistline et al. 2023). These reductions would not be achieved through regulation or carbon pricing but through generous incentives that stimulated and scaled private sector activity—building energy infrastructure, commercializing technology, and onshoring clean energy supply chains. These investments would ensure that the future energy system would be clean, resilient, secure, and affordable. Additionally, they would position the United States as a global competitor for a large share of the growing market for clean energy so that it would reap long-term economic and employment returns from its initial investments. 

Key legislative milestones include the Bipartisan Infrastructure Law (BIL) and CHIPS and Science Act, both bipartisan, and the Inflation Reduction Act (IRA), passed with a simple majority and tiebreaking vote of Vice President Harris through budget reconciliation. DOE referred to this trio as the backbone, the brain, and the lungs of US climate action (Bistline et al. 2023). The majority of federal support for the climate-related provisions came through the tax code, but, for the first time, these laws conditioned tax credits on labor standards to improve job quality, stabilize training in construction, and ensure that workers benefited directly from investments. DOE also embedded labor and equity provisions in its grant and loan programs. Despite passing no significant new legislation to advance labor and equity goals, the federal government effectively used executive orders and existing authorities to steer investments to support the president’s bottom-up, middle-out economic and climate agendas. 

While this approach carried its own operational tensions, the tensions did not gridlock progress. DOE underwent a strategic reorganization, hired over one thousand staff, designed funding opportunities, reviewed and selected proposals, and negotiated funding agreements for 75 new programs, sending billions of dollars into communities all across the United States. It established an agency-wide approach to ensure the benefits of investments would be shared with workers and communities long left behind. It expanded its clientele through intensive and authentic engagement to serve businesses, local governments, labor unions, tribes, and community groups. The agency hoped for more time but planned for durability in the face of political upheaval. 

Leadership, staffing, and structure were critical to these successes. DOE’s transformation offers a blueprint for implementing incentive-based green industrial policy coupled with a good jobs agenda. Yet even exemplary implementation could not fully insulate the administration from political vulnerabilities or maintain support for its key provisions. 

Lessons

Several lessons for future policymakers and climate advocates that crystallized in the Biden administration and 2024 election are worth incorporating into future climate strategy. 

1. Industrial policy and infrastructure policy have been powerful climate tools. Even when combating climate change wasn’t the stated policy objective, these measures have driven the largest investments and emission reductions. 
2. Technology policy that stretches from R&D through deployment continues to be essential for reducing emissions. Once a clean energy technology matures, it will be evaluated in the market on its energy and economic merits (i.e., cost, speed of construction, flexibility, etc.). But getting a technology ready both for technological and operational deployment will be essential.
3. Opportunity rather than sacrifice has been the most powerful climate lever. Fiscal policy spurred clean energy innovation, diffusion, and investment, all while promoting economic growth and full employment. 
4. Labor is an essential ally for climate-beneficial policy. Labor- and equity-centered policies are critical to building the political support and real-world economic momentum needed for strong climate action. Even market-based solutions depend on strong policy signals. In the 2025 budget reconciliation process, in which key clean energy provisions of the IRA were gutted or amended as to be obsolete, labor unions rallied bipartisan support for the prevailing wage and apprenticeship incentives. The oil and gas industry understands the strength of a political alliance with organized labor, and the sooner the clean energy industry matures in its political strategy and partnerships, the better for the economy and the climate.
5. More collaborative and tripartite workforce planning is needed, coupled with investments for industry-labor training partnerships and on-the-job training. Policies that drive the demand for skilled workers are valuable for improving job quality via increased competition for workers, but coordinated planning and training is necessary to build and expand new high-road industries as well as inclusive access to jobs. 

Several lessons from Biden administration implementation that would help future administrations be more politically successful include: 

1. The economy is only perceived to be as strong as its weakest link. President Biden oversaw record low unemployment and record high wage growth, but persistent high costs for housing, energy, childcare, and food undermined economic security and created political vulnerability. 
2. Government visibility and direct investment build support for federal programs. While partnering with the private sector has been culturally and politically pragmatic, as well as necessary to scale climate technologies, it cedes credit for transformational investments to private businesses. Visible public investments, job creation, and ownership are vital to maintain trust, demonstrate impact, and reassert the government’s role in delivering economic security and opportunity. 
3. Federal policies can serve as models for states (and vice versa). Best practices such as interagency MOUs and conditional funding piloted by federal agencies can be adopted by state governments to advance climate, labor, and equity goals. Likewise, innovations at the state and local levels can advance future federal efforts. 
4. Federal staff recruitment and training is necessary for implementation of a policy agenda. Advocates often think that the policy or executive order is the win, but without agency capacity, knowledge, and skills, implementation falls short. In particular, labor representation in both political and career positions is underdeveloped. 
5. Possible roles for the federal government in US industrial policy expanded under Biden and continue to expand under Trump. Shifting norms require big, bold, future-oriented ideas. 

In sum, the Biden administration’s approach demonstrates that incentive-based, labor- and equity-conscious industrial policy, implemented with capable agencies and broad coalitions, can simultaneously drive emissions reductions, economic growth, and good jobs—even in a politically fragmented environment. These results will be detailed in the second paper in this series. The US experience provides a road map for future climate governance, highlighting both the promise and the limits of this approach.