There is a lot at stake here. In many cases, the infrastructure America needs must address both climate change and be socially responsible. Priorities include continued development of renewable energy (including offshore wind), enhancements to electrical transmission infrastructure and building retrofits, all to reduce carbon emissions, along with improvements to transportation and water infrastructure to respond to social needs.
When it comes to addressing climate change, the IIJA is a step in the right direction. The legislation includes more than $65 billion for improvements to the power grid that will support the expansion of cleaner, more reliable energy, as well as the development of new technologies that will lower carbon emissions. Further proposals in the Build Back Better Act, which is currently under consideration, would also provide tax credits for regionally significant electrical transmission lines, aimed at stimulating more private-sector investments and broader sources of capital. This is important for the integrity of the grids as more renewable power is moved regionally to support the electrification initiatives.
The IIJA is also far-reaching in its approach to addressing social inequality through investments in critical infrastructure that will have a profound impact on smaller, more isolated communities in North America. It allocates some $110 billion on the repair of roads and bridges, as well as other major infrastructure projects — the largest investment in bridges since the construction of the interstate highway system. While that is expected to include some of the most economically important bridges in the country, it does not overlook thousands of smaller bridges as well — many of which provide critical connections to rural communities and tribal nations.
Likewise, the IIJA allocates $55 billion to drinking water, wastewater and stormwater infrastructure, including funding to replace lead pipes and service lines that will address lead exposure in schools and child care facilities. The infrastructure deal also allocates $1 billion for infrastructure that will help reconnect communities that have been divided by highways, typically in majority-Black neighborhoods. These initiatives will help to tackle underlying inequalities across America that stymie economic growth.
More broadly, investment in infrastructure will likely facilitate long-term economic growth. It will increase efficiencies and generate job and wage growth across the gamut of skills in manufacturing, construction, transportation and distribution. That will likely lead to new winners in the public markets too — particularly in clean energy, electric vehicles, telecommunications providers and construction. For example, the infrastructure deal includes $7.5 billion for expanding electric vehicle charging stations nationwide, which will ultimately accelerate electric vehicle adoption.