FACT: Per the International Labour Organization, “Uzbek cotton is free from systemic child labour and forced labour.”
THE NUMBERS: ILO estimates of forced labor worldwide –
2021: 27.6 million
2016: 24.9 million
2011: 20.9 million
WHAT THEY MEAN:
A grim series of statistics, drawn from last week’s International Labour Organization report on worldwide forced labor in 2021:
“49.6 million people were living in modern slavery in 2021, of which 27.6 million were in forced labour and 22 million in forced marriage. Of the 27.6 million people in forced labour, 17.3 million are exploited in the private sector; 6.3 million in forced commercial sexual exploitation, and 3.9 million in forced labour imposed by states.”
The 27.6 million total — up by 2.7 million from the 24.9 million estimated in the ILO’s 2017 report — combines several different conditions under the broad term “forced labor.” The most common of these, found in 36% of cases, involves workers trapped in jobs by withholding of pay; others involve debt bondage, entrapment of migrant workers, threats of violence by criminal enterprises, and in 1% of cases, chattel slavery. Reacting to this report, the U.S., European Union, and Japanese Trade and Labor ministers express joint commitment “to eradicating all forms of forced labour, including state-sponsored forced labour, from our rules-based multilateral trading system, and resolve to strengthen national and international efforts to meet this commitment.”
How exactly would they do this? Perhaps more fundamentally, would “removing forced labor products from international trade flows” also eliminate forced labor as such, or simply shift the destination of the products? In thinking through these questions, it might be useful to look at a recent example of large-scale success: the elimination of a state-run program of seasonal forced labor in cotton harvesting in Uzbekistan. Some background and tentative conclusions:
Background:Largest of the Central Asian republics at 34 million people, Uzbekistan is the world’s sixth-largest cotton producer, harvesting about 3 million tons per year in a global total usually around 25 million tons. Having served in the Soviet era as the provider of cotton for Russia-based textile mills, as an independent country since 1991 Uzbekistan now grows cotton both for local factories and for exports to clothing-producers elsewhere in the world.
According to a series of ILO surveys begun in 2016, about 2.8 million people worked in Uzbekistan’s annual autumn cotton harvest in the early 2010s. Roughly 14% of these harvesters — almost 400,000 people – were forced laborers required by local governments to leave school or jobs for unpaid fieldwork during harvest season until regional harvest quotas were filled. The 2016 survey reported that those “most ‘at risk’ of forced labour were medical and education staff, people employed elsewhere, and university/college students.” Five years later, the January 2021 report declared that “systemic forced labour and child labour has come to an end in Uzbekistan,” and the March 2022 report found no return.
Eliminating this system appears to have involved at least three factors:
(a) A large and sustained international activist effort through the “Cotton Campaign” involving businesses, labor unions, and human rights groups, which provided information on forced labor practices in the cotton harvest and pressured textile and apparel industry buyers worldwide not to use Uzbek cotton.
(b) International government pressures, in the U.S. case including human rights reports published by the State and Labor Departments, and a ‘review’ of the tariff waivers Uzbekistan received through the Generalized System of Preferences entailing possible revocation.
(c) Contingent factors, in particular the death in office of post-Soviet leader Islam Karimov and his replacement by a new leader, Shavkat Mirziyoyev, whose government hoped to avoid the reputational and potential economic damage associated with forced labor and was willing to put sustained effort, with ILO advice and monitoring, into reshaping the cotton industry.
Tentative conclusions: In drawing lessons from this experience, it’s likely important to be aware that the term “forced labor” covers many different forms of coercion, and these may require different approaches. The Uzbek cotton harvesting system appears an unusual, both as a state-run program and as one designed mainly for economic/industrial purposes. The policies that succeeded in eliminating it may be less useful with respect to state forced labor systems used by militaries or for other political purposes. State-required forced labor in turn is a relatively small part of forced labor generally, accounting in the ILO’s estimates for about 15% of the worldwide 27.6 million forced laborers. Most forced labor (see data below) appears to be in small-scale private businesses and criminal enterprises, where the policy challenge will often be effective law enforcement, often at local levels. But some general features of the effort to eliminate forced labor in Uzbekistan’s cotton harvest may be generally useful.
Publicity: The Cotton Campaign’s work, and the publication of credible data and reports by the U.S. government and ILO, appear to have had a major impact on both international opinion and Uzbek government policy. The U.S.’ GSP review likely added to this; its economic importance was modest — in the mid-2010s it applied to $2.5 million in imports of dried peppers, apricots, and other agricultural goods, out of $100 million to $300 million in annual Uzbek exports to the U.S. — but the reputational impact of the case and potential loss of benefits may have been high. This is especially relevant since, as our January report on GSP notes, the system lapsed almost two years ago and is not now available for the six Ministers’ efforts on forced labor, but can be restored whenever Congress acts.
Patience and persistence: The Cotton Campaign began working in 2007, and remained focused specifically on Central Asian cotton harvesting for a decade before the change of government in Uzbekistan and the subsequent relatively rapid abolition of forced labor in cotton harvesting.
Optimism: In this case, some combination of government policies, activism, and changing perceptions within the Uzbek government worked. Different circumstances elsewhere may require different methods, but the fact of one success means others are also possible.
And via the Uzbekistan Embassy in D.C., remarks from Tanila Narbaeva (Chair of National Commission on Combatting Human Trafficking and Forced Labor) on the abolition of forced labor and next steps in labor reform.
Forced labor commitment from U.S./EU/Japan Trade and Labor Ministers.
And the U.S. Customs and Border Patrol explains forced labor-product interdiction.
Data:
Over the last decade, the world labor force has grown from 3.20 billion to 3.45 billion, and the ILO estimates of forced labor has risen from 20.9 million in 2011, to 24.7 million in 2016, to the 27.6 million cited in last week’s report. Basic statistics from last week’s report:
Industries: About two thirds of forced labor, totaling 17.3 million people, is in the “private sector.” This includes 5.5 million in a broadly defined “services” sector, and an additional 1.4 million in domestic work; 3.2 million in manufacturing, 2.8 million in construction; 2.1 million in agriculture; 0.2 million in mining and quarrying; and 0.1 million in fisheries. Child forced labor is most common in services, especially for domestic maid work.
Prostitution and pornography: 6.3 million forced laborers appear to be performing forced sex work (which in the ILO report is considered separately from ‘private sector’ industries). Of this total, 4.9 million are female and 1.4 male. Over a quarter of the 6.3 million people, 1.7 million, are children.
Government: 3.9 million people are held in labor camps or forced to work by governments. (Not including prisoners required to work as part of legitimate sentences for crimes). This total is nearly double the 2.2 million the ILO estimated for 2011, but slightly lower than the 4.1 million estimate for 2016. The ILO does not cite specific governments involved.
International trade: The report offers no guess at how much forced labor production enters international trade flows, but notes that the sectors where the risk of forced labor is “highest in severity and scale” are “informal micro- and small enterprises operating at the lower links of supply chains in high-risk sectors and locations”.
Geography: Forced labor estimates appear roughly consistent with shares of the world labor force, except that Africa’s share of forced labor is relatively low and the “Europe/Central Asian” share high. About half of all forced labor — 15.1 million people — is in Asia. Elsewhere, the ILO estimates 3.6 million people in forced labor in the Western Hemisphere, 0.9 million in Arab states, 3.8 million (and the lowest rate relative to population) in sub-Saharan Africa, and 4.1 million in Europe and Central Asia.
Case history in success: Uzbek cotton 2015-2022:
ILO’s 2016 report (first in the series, covering the 2015 harvest), with analysis on the nature of forced labor in cotton harvesting seven years ago.
And the March 2022 report announces an end to “systemic forced labour and child labour” in Uzbek cotton harvesting.
The Cotton Campaign lifts its boycott of Uzbek cotton, March 2022.
And historical Central Asia perspective:
Sadriddin Aini’s Sands of Oxus (1954), recounting childhood in the Emirate of Bukhara in the 1880s (conquered by imperial Russia in 1865 and no longer independent, but still a “protectorate” and locally self-governing), includes recollection of a temporary forced-labor recruitment episode for road-building.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
A timely new report, published today by the Progressive Policy Institute’s Paul Bledsoe and Elan Sykes, argues the Biden Administration and the Democratic-controlled Congress’s historic clean energy and climate projects, passed in the Infrastructure Investment and Jobs Act, the CHIPs and Science Act and the Inflation Reduction Act, face major roadblocks that could threaten delivering on the promises of green innovation in the United States. The report authors find that America’s clean energy transition is dependent on permitting reform.
“If these reforms are not adopted, chances are we will face trillions of dollars in annual climate change impact costs in the U.S. and globally, and climate change impacts increasingly undermining domestic and global economic growth and security. The U.S. has made the initial policy investments to set the stage for clean energy and climate change success — now we must help ourselves, and the world, finish the job. No policy actions are more important,” write authors Paul Bledsoe, Strategic Adviser for the Progressive Policy Institute and Elan Sykes, Energy Policy Analyst at the Progressive Policy Institute in the report.
The report comes as Sen. Joe Manchin’s push for permitting reform has met pressure from far-left environmental groups, progressive activists, and members of the House Progressive Caucus. These concerns, which are overwrought, ignore the consensus among environmental analysts that slow regulatory review is creating more environmental and economic costs as we act to fight climate change.
Key policy recommendations from the report include:
Passing the Permitting Proposal led by Sen. Manchin and Sen. Majority Leader Schumer
Authorizing the study of successful permitting reforms – including the FCC’s ‘shot clock’ for cell tower siting
Passing the SITE Act, which would empower the Federal Energy Regulatory Commission as the siting authority for transmission projects that are currently forced to go through lengthy and fragmented approval processes and improve eminent domain procedures.
Maximizing Green Categorical Exclusions and Programmatic Reviews
Making reforms at the State and Local levels; and
Preventing new regulations from hindering new technologies.
Paul Bledsoe is a strategic adviser at the Progressive Policy Institute and a professorial lecturer at American University’s Center for Environmental Policy. He served on the White House Climate Change Task Force under President Clinton, at the U.S. Department of the Interior, as a staff member at the Senate Finance Committee and for several members of the U.S. House of Representatives. Read his full biography here.
Elan Sykes is an Energy Policy Analyst at PPI. Elan works on energy deployment, innovation, and decarbonization. Prior to joining PPI, Elan served as a researcher at the Climate Leadership Council where he focused on carbon pricing, global climate policy, and the intersection of climate and trade policies.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels and Berlin. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
The Biden Administration and the Democratic-controlled Congress have earned plaudits for enacting unprecedented funding for clean energy incentives and climate protection. These include provisions in the bipartisan infrastructure law (IIJA), the U.S. competitiveness legislation (CHIPS), sections of the Inflation Reduction Act (IRA), and other legislation, totaling approximately $514 billion in new spending on clean energy and climate, not including other related infrastructure funding.[1] Taken together, these new laws represent the greatest investment in new U.S. energy infrastructure in nearly a century.
And yet, because of regulatory roadblocks and nuisance litigation, it is unclear that this new funding will deliver on its two policy goals:
1) Rapid, low-cost build out of a powerhouse, world-leading U.S. clean energy sector.
2) Large reductions in domestic greenhouse gas emissions (GHG) necessary to put the U.S. in a vanguard position to force emissions reductions by other key emitting nations globally.[2]
America must lead the world as a whole toward a rapid clean energy revolution and decarbonization. But a big obstacle stands in our way:
A broken domestic U.S. energy permitting system that imposes tremendously high costs in time and money to build clean energy infrastructure projects, if they get built at all.
Ironically, in the name of environmental protection, a perverse process has set in whereby often unnecessary and duplicative government reviews and nuisance lawsuits have pushed average time for permitting to 4.3 years for transmission, 3.5 years for pipelines, and 2.7 years for renewable energy generation projects. Notably, these numbers don’t include those many hundreds of projects that are abandoned and never built because costs — often in the millions or tens of millions — and delays have become too burdensome for developers. These long, costly delays and false starts are simply not consistent with a rapid and cost-effective build out of U.S. clean energy generation and transmission, new hydrogen and carbon management infrastructure, or deep reductions in domestic GHG emissions in keeping with U.S. policy goals and climate science. In fact, initial studies note that without permitting and regulatory reforms, projectedclimate and economic benefits of these recent laws wouldbe artificially limited and fail to meet policy goals.[3],[4]
Equally, the potential economic and climate upsides for the U.S. of the actions recommended in this report are tremendous. Multiple studies[5],[6] show the IIJA, CHIPS and especially IRA new laws hold remarkable U.S. economic promise, including:
Growing the overall U.S. economy and new clean energy sector worth trillions each year;[7] creating millions of good, new jobs;[8] reducing consumer and business energy costs by 4% or $50 billion by 2050, while saving the average households hundreds of dollars each year;[9] and expanding U.S. technology and energy exports.
Reducing U.S. greenhouse gas emissions approximately 40% by 2030 below 2005 levels;[10],[11] the IRA bill alone would enable the U.S. to close 50% to 66% of the emissions gap between business-as-usual emissions and the Biden goal of 50% emissions reduction by 2030.[12] Together, the three new laws will help cut the near and long-term costs of climate change impacts and lower threats to public safety; protect worker productivity; improve public health and reducing health care costs;[13] enhance national and global security; and increase long-term U.S. competitiveness in the fast-growing global clean energy economy that will be worth tens of trillions of dollars during the 21st century.
But major studies that find large economic, clean energy, and climate benefits all assume significant improvements in clean energy project permitting and regulatory streamlining. Respected analysis also finds that to ensure these major benefits occur, and to maximize all potential economic and climate benefits[14] will require additional actions by the Administration and Congress.
When Senators Joe Manchin, D-W.Va., and Chuck Schumer, D-N.Y., announced that they had come to an agreement to pass the investments in energy and healthcare that became the Inflation Reduction Act, they also agreed to push for reforms aimed at speeding up the lengthy federal environmental review and permitting process. A draft summary of the deal proposes a prioritization process for strategically important projects, changes to review timelines and litigation rules, and reforms for certain projects and project-types.
The Manchin-Schumer proposal offers a path forward for the crucial reforms amid a narrowing window of opportunity for action this Congress. Leading Democratic climate hawks in the Senate, including Senators Brian Schatz, D-Hawaii, Martin Heinrich, D-N.M., and Ron Wyden, D-Ore., who helped designed the clean energy tax credit package that formed the core of the IRA’s climate component, have endorsed the call for swifter regulatory review and permitting of clean energy projects.
Unfortunately, however, the proposal has drawn fire from some far-left environmental groups and progressive activists. In the House, 77 members, most members of the left-wing Progressive Caucus, signed a letter arguing that permitting reform should not be included as part of a must-pass government funding bill, and may undermine efforts to improve environmental justice. Several senators, including Senators Ed Markey, D-Mass., and Bernie Sanders, I-Vt., have leveled similar concerns. Such fears are overwrought. There’s a growing consensus among environment analysts that slow regulatory review in fact creates environmental as well as other costs, and that slowing climate change is the most crucial goal of environmental justice.[15] Many of the key Manchin-Schumer proposals regarding NEPA administration, electric transmission, and hydrogen merely extend the benefits of existing law on infrastructure permitting, widening the scope of FAST-41 support through the Permitting Council to cover more energy projects and provide additional resources to coordinate and complete their reviews efficiently at a time where timely energy infrastructure deployment is of the utmost economic, political, and climate importance.[16]
The Manchin-Schumer proposals would not eviscerate environmental protections. Rather, in most cases, it will simply codify existing NEPA and other provisions, like those allowing simultaneous agency reviews, and greater use of the categorical exclusion process, already allowed under current law, as noted by leading Democratic siting expert Daniel Adamson.[17]
The proposal would also bring the U.S. in line with other advanced countries, notably the EU and Canada, which have high levels of environmental protection while maintaining firm deadlines for environmental reviews.[18],[19]
For years, most Republicans have advocated reforms not dissimilar to Manchin-Schumer, but Congressional Republicans are so far withholding support for the pending proposal, appearing wary of giving Democrats an additional legislative accomplishment. Now Senate Republicans, led by Senator Shelley Moore Capito, R-W.Va., have unveiled a new permitting reform blueprint, supported by 38 GOP senators. Their approach gives states “sole authority” over regulations on fracking on federal land and would allow states the right to “develop energy resources” on federal land within their boundaries. In general, the Republican approach only indirectly and insufficiently improves problems with renewables or transmission siting while taking a much more aggressive stance on oil and gas development on public lands, banning the Biden administration’s interim Social Cost of Carbon estimate, and codifying many of the Trump administration’s attempted changes to undermine environmental regulation.[20] These provisions are therefore not serious attempts to further the U.S. clean energy transition or limit greenhouse gas emissions in keeping with needed climate protection.
Our report describes in depth the ways in which our current regulatory systems are fundamentally broken, and concludes with the following recommendations to Congress for accelerating government reviews and permitting, including:
Pass the Manchin-Schumer Permitting Proposal:
The quickest and best step available to speed up permitting immediately and unleash the investments made in the IIJA, CHIPS, and IRA package is to pass the Manchin-Schumer proposal. This must include Reforming Energy Project Permitting and Streamlining Regulatory Hurdles, including under the National Environmental Policy Act (NEPA), as envisioned in pending legislation, specifically for major high voltage electric power lines to carry renewable energy from remote areas of generation to regions of strong demand; Natural gas and CO2 pipelines; Electricity Storage projects; Electric and other advanced vehicle charging and fuel infrastructure; Carbon Capture and Storage and Direct Air Capture technologies; Advanced Nuclear Power; Advanced Geothermal, and many other new technologies.
Study and Consider Adopting Successful Permitting Reforms — including 2-Year “Shot Clock” — from Other Sectors:
Congress should authorize the study of successful permitting reform in other parts of the economy, including the Federal Communications Commission’s adoption of time limiting “shot clocks” for the siting of cell phone and communications towers, with an eye toward adopting this time limit for appropriate energy projects. Applying these procedures to key green projects like grid-scale solar, wind turbines, battery storage, and transmission lines on public lands will ensure developers of rapid government decision-making that can increase certainty, reduce costly delays, and help speed up deployment. With all of the new resources available to agencies for permitting in the IRA, quick decisions will not undercut thorough examination of any localized impacts from these well-understood and environmentally critical projects.
Pass the SITE Act:
This bill, written by Senator Sheldon Whitehouse, D-R.I., and cosponsored by leading climate advocates Senators John Hickenlooper, D-Colo., and Martin Heinrich, D-N.M., and others in the House, would empower Federal Energy Regulatory Commission as the siting authority for transmission projects that are currently forced to go through lengthy and fragmented approval processes and improve eminent domain procedures. Ideally, these provisions would be included in reform legislation passing Congress this year.
Maximize Exclusions and Programmatic Reviews:
A Categorical Exclusion (CE) is a group of actions that a federal agency has determined, after review by White House Council on Environmental Quality, do not individually or cumulatively have a significant effect on the human environment and for which, therefore, neither an environmental assessment nor an environmental impact statement is normally required. Legislation should seek to expand the use of CE whenever possible, requiring use of the fasted possible review process available under law.
Reforms at the State and Local Levels:
At the state and local levels, policymakers should look for parallel opportunities to reform slow or outdated review, siting, and permitting procedures that in many cases are just as onerous, costly, and counterproductive as federal regulations. State and local jurisdictions are host to many crucial opportunities for clean energy deployment that will not rise to the federal level, including distributed renewable generation, local transportation networks, and denser forms of housing development. In New York, a new Office of Renewable Energy Siting established in 2020 has already improved on the older, more arduous approval process by consolidating and expediting siting and review requirements and empowering the State to override local restrictions on renewable energy that are “unreasonably burdensome”; this model should be emulated more widely by other states, especially California, whose California Environmental Quality Act is notoriously for many years of delaying needed energy infrastructure.
Prevent New Regulations from Hindering New Technology:
New permitting hurdles or regulatory bottlenecks may also emerge as innovative technologies like direct air capture, carbon capture, utilization and storage, CO2 pipelines, hydrogen hubs, advanced nuclear, and advanced geothermal wells scale up. These and other new clean energy technologies may require additional regulatory actions as they are more widely commercialized; however, federal policy makers in Congress and the Executive Branch must guard against the imposition of new unnecessary regulatory burdens especially those that delay needed infrastructure buildout.
A Broken Permitting System and Regulatory Gridlock
With the incentives to deploy clean energy technologies in place following the passage of IIJA, IRA, and partially-funded CHIPS, these permitting reforms are crucial for ensuring maximum economic and climate benefits. In fact, initial studies find that without permitting and regulatory reforms, projected climate and economic benefits of these new law would be severely limited and fail to meet policy goals.[21],[22] Congress should work quickly to pass them as proposed and continue to search for additional ways to speed up deployment.
The federal environmental review, siting, and permitting process (hereafter summarized as “permitting”) is a complex collection of requirements that oblige project sponsors to submit lengthy documents outlining the project’s impact on the environment and analyzing potential alternative projects. Depending on the type of project, federal law may require analysis under the 1969 National Environmental Policy Act, or NEPA, which can take several forms depending on the type of project and its expected impact. NEPA review can take one of three forms, increasing in stringency from Categorical Exclusions, which are intended to exempt unimpactful projects from unnecessary scrutiny, Environmental Assessments, or EAs, a sort of intermediate review after which a project can be declared to have no significant impact (FONSI), submit a “mitigated FONSI” that lays out steps taken to reduce the project’s impact and ensure that it stays below the threshold for further review, or sent up to the highest level of review, an Environmental Impact Statement, or EIS.[23],[24] Large projects with expected significant impacts go straight to the EIS stage. Only after the Final EIS is issued can federal agencies make final decisions regarding the project, including determinations made along the way on 64 different types of permit that might be required depending on the nature of a project.[25]
While initial NEPA reviews were generally brief documents produced quickly, the intervening decades have seen a marked increase in the completion time and page counts of NEPA review documents. In 2020 the CEQ released a report finding that recently published EISs took 4.5 years to complete from formal Notice of Intent to final Record of Decision and ran for an average of 661 pages — not counting the average 1,042 pages of appendices.[26] And while Categorical Exclusions and Environmental Assessments are quicker and shorter, the federal government is responsible for issuing many more of them, somewhere on the order of 10,000 EAs and 100,000 CEs per year, and so while a comprehensive assessment of their time and financial cost to the government does not exist, the cumulative resources dedicated to them are significant.[27]
Permitting Council data for a representative sample of energy sector projects from 2010 to 2017 bears out the finding that permitting adds years to these crucial projects: the average time from formal start to final decision averaged 4.3 years for transmission, 3.5 for pipelines, and 2.7 years for renewable energy generation projects.[28],[29] These reports are costly to produce for both the government and for private developers, not just in staff and consultant salaries, but also by adding years of delay where investment is tied up but cannot be deployed productively.[30]
These average review times obscure the occasionally devastating impact that NEPA review and equivalent requirements from state governments can have on clean energy infrastructure and other pro-environment projects. Cape Wind, an offshore project that would have been the first of its kind in the U.S., was caught up in litigation for 16 years; another Massachusetts project, Vineyard Wind, is finally going ahead after years of NEPA review and Trump administration-imposed delays.[31],[32],[33] On land, a wind project in Wyoming took 11 years for approval.[34] New York City’s congestion pricing program, a valuable attempt to incentivize cleaner alternative transport modes and disincentivize traffic that clogs Manhattan’s streets, is being put off for NEPA review as well.[35] At a time when climate change is exacerbating extreme weather phenomena and brutal wildfires rage in the Western U.S., NEPA delays USFS wildfire prevention by an average of 3.6 to 7.2 years depending on the project type.[36] Recent analysis finds that U.S. coal fired power plants that have been scheduled to close are staying open, in many cases in order to stabilize regional electricity grids, which are running into regulatory and permitting roadblocks in expanding intermittent wind and solar power.[37]
Sadly, the problem of environmental review bogging down environmentally critical projects is not exclusive to federal law. At the state level, regulations, such as California’s CEQA, have proved a similar barrier to green projects like high-speed rail between San Francisco and LA and to San Francisco’s bike lanes.[38],[39],[40] Climate-beneficial projects in other states have also encountered this problem, such as the rezoning of Minneapolis to allow denser and more climate-efficient forms of housing which was successfully sued under MERA, Minnesota’s state-level NEPA equivalent.[41] In Iowa, one analysis has found that local ordinances restricting wind turbines may obstruct more than half of future wind power development needed in the state for U.S. net-zero 2050 goals.[42] While this paper is focused on federal reforms, many of the issues discussed here also apply to this patchwork of varied and occasionally stifling state permitting processes that require reform as well.
Energy Permitting and the Deployment Challenge
The ability of the new programs laid out in the IIJA, CHIPS, and IRA to achieve their goals and maximize the public benefit depends on our ability to build the infrastructure and technologies they fund. This means rapid buildout of vast new low-carbon electricity generation, which in turn will require significant changes to our electricity grids in the form of long-distance transmission, large-scale storage, and resilience upgrades, along with new technologies to turn this clean energy into useful applications for industry, transportation, and buildings. Now, the funding is in place to make significant progress on this buildout, but the fraction of costs spent on bureaucratic paperwork and time spent waiting with NEPA review, siting decisions, and permits pending remain to be determined.
Just how much new energy infrastructure will be required? The National Academies report, Accelerating Decarbonization of the U.S. Energy System, lays out the scientific consensus on what the U.S. will need to deploy to reach net-zero emissions: far more than is currently in operation.[43] And all of this new deployment must happen at an accelerating pace.
Expert energy systems modelers have estimated that the IRA will accelerate renewable deployment significantly: The REPEAT Project at Princeton University’s ZERO Lab has projected that, absent permitting and siting obstacles, the IRA could spur 39 GW of wind and 49 GW of grid-scale solar per year by 2025 and 2026.[44] Energy Innovation, another modeling group, projects that the cumulative wind and solar generation on the grid could reach between 795-1053 GW by 2030 thanks to the IRA funding.[45] Both modeling reports, however, explicitly call out permitting and transmission capacity as potential bottlenecks that could limit this deployment.
Compared against historical renewable deployment rates, achieving this acceleration and ambitious net-zero targets will be a huge lift. For the last two decades, wind and solar generation have grown rapidly in the U.S. as technology improved, costs declined, and public policy support generally expanded. Between 2001 and 2021, the U.S. installed a total of 130 GW of wind and 95 GW of solar (including distributed and thermal solar — utility-scale PV generation is smaller, and in 2020 nameplate capacity for all of the U.S. was only 46.6 GW).[46],[47] Annual net capacity additions for the last 10 years in the same data averaged 9 GW each of wind and solar.
In that time, projects as small as 0.1 GW (10 MW) of solar and as large as 3 GW of wind were subject to NEPA reviews counted in the FPISC review, where renewable project permitting times stretched for an average of 2.7 years each. If each fraction of a gigawatt takes almost 3 years to secure federal permits, and the transmission upgrades needed to carry that power to consumers takes over 4 years per project, the modeled effects of the IIJA and IRA will never come to pass. Instead of rapid progress on clean energy, the funding appropriated in these laws will pay for slow-moving projects and countless person-hours of duplicative, unnecessarily burdensome reviews.
And for newer clean energy projects on the cutting edge of technology, like new advanced nuclear power, advanced geothermal, hydrogen hubs, and carbon management infrastructure in the form of capture and storage, direct air capture, and CO2 pipelines will struggle even harder. Because these technologies are newer, they may present novel environmental impact questions that take longer to sort out at first. All the more reason, then, to ensure that permitting staff are able to focus on these new technologies rather than clogging up their agenda with well-understood and environmentally vital renewable energy and transmission projects.
Passage of the Infrastructure Investment and Jobs Act and the Inflation Reduction Act’s clean energy provisions has committed the nation to deploy renewable generation capacity and battery storage at several times the historic pace. Permitting reform can help us step up the tempo of installing new solar panels, wind turbines, and other clean generation; upgrading aging transmission grids and ensuring reliable supplies; millions of new EV charging stations funded with $7.5 billion in the IIJA, improving energy efficiency in mass transit and buildings; and launching innovative new carbon management and clean hydrogen regional hubs. We should demand the highest possible public benefits from these investments.
Modest Steps Forward
The permitting problem is not new and several previous attempts to speed up approvals have helped incrementally improve the process.
Through executive action as well as legislation, the Biden Administration has pushed to speed up the federal permitting process without getting bogged down in controversies that stymied his predecessor’s efforts. The Biden Administration’s permitting timelines have improved by an average of almost four months due to more efficient bureaucratic management.[48] While an updated set of CEQ regulations is partially complete, the Biden White House released a Permitting Action Plan this past spring that emphasizes efficient processing, coordination across agencies and with relevant state, local, and Tribal governments, and leveraging tools like the Permitting Dashboard and FAST-41 authorities.[49]
The major infrastructure and clean energy legislation passed this Congress also include beneficial steps on permitting. The IIJA included key improvements to existing reform initiatives, turning the Permitting Council from a temporary body under FAST-41 into a permanent program and establishing two-year review goals, shorter documents for surface transportation project reviews of under 200 pages (with exceptions for unusually complex projects), single-document EISs, shorter deadlines for final Records of Decision after the completion of a Final EIS, allows for expanded eligibility for existing Categorical Exclusions, and allowing for the inclusion of a wider range projects on the Council’s Permitting Dashboard.[50] Many of these changes reinstated aspects of the “One Federal Decision” framework while avoiding some of the more contentious aspects of the Trump administration’s reforms.
The IRA tackled permitting delays from a different angle: As part of its overall clean energy spending package, $735 million will be appropriated to federal agencies to help hire staff, upgrade technical systems, and develop new tools to improve review quality and speed up the process.[51] The funding is split between the Department of Energy, Interior, EPA, CEQ, FERC, NOAA, the Permitting Council, and the FHWA. This funding is especially important from an efficiency standpoint because the federal agencies responsible for producing and reviewing NEPA documents and issuing permits will need sufficient technical expertise and workforce capacity if the government is to successfully speed up the process in practice. But without firm deadlines, enforcing the expectation that these new resources are used to speed up reviews, the funding will be spent on managing the existing paperwork burden that maintains the status quo to little public benefit.
All of these steps are commendable, but the sheer scale of the clean energy transition requires moving beyond incrementalism. Senators Manchin and Schumer are on the right track with their outlined proposal to take a next step, and Democrats should get on board to match the fiscal commitments the U.S. has made to unleash clean energy abundance with regulatory reforms to enable these investments to translate into rapid progress on the ground.
Recommendations to Congress on Permitting Reform
As of this writing, an official text of the Manchin proposal has not been released. A one-page summary lists a new procedure for designating high-priority energy projects, firmer enforcement of NEPA review timelines, changes to litigation, categorical exclusions, and some sector-specific changes.[52]
High Priority Projects: The President would be responsible for designating at least 25 “high priority energy infrastructure projects” of “strategic national importance” for expedited review among a “balanced list of project types, including: critical minerals, nuclear, hydrogen, fossil fuels, electric transmission, renewables, and carbon capture, sequestration, storage, and removal.”
Timeline Cap: Maximum timelines of 1 year for EAs and 2 years for EISs.
Litigation Reform: Limit litigation delays by shortening the statute of limitations and requiring quicker responses by agencies in NEPA lawsuits.
NEPA Exclusions: Actively evaluate potential new Categorical Exclusions to NEPA.
The summary also suggests changes for certain project types and one specific project:
Interstate electric transmission reforms: Grants new ability to the Energy Secretary and FERC to designate projects of national interest, requires FERC to allocate transmission project cost to benefiting consumers, and allows payments to transmission host jurisdictions.
Clean Water Act Section 401 reforms
Hydrogen infrastructure placed under clear FERC jurisdiction
Approving the Mountain Valley natural gas pipeline
This proposal would work well with the steps laid out by the Biden Administration and those taken in the IIJA and IRA to help move the ball forward on clean energy deployment that is absolutely necessary to meet U.S. climate goals. Transmission is a particularly important area for reform due to the changing needs of U.S. electricity grids pursuing decarbonization in a rapidly changing climate. The Manchin-Schumer proposal includes several tools that could strengthen landowner protection and retain State input while spurring nationally vital deployment, and we suggest further action to spur grid upgrades below by incorporating the SITE Act into the deal. The proposal would also ensure that U.S. natural gas exports are available to energy-constrained allies in Europe and Asia. At a crucial time in energy markets, U.S. gas exports would be poised to meet global demand with exceptionally low-methane supply thanks to the IRA’s new methane fee and methane reduction funding, helping to avoid the worst-case scenarios of increased coal combustion or severe energy shortages.[53]
Viewed with skepticism by some on the left — who view any new fossil fuel infrastructure as anathema — the growth of U.S. natural gas exports should be viewed as the best available course of action given the current circumstances of global energy markets. For European allies struggling to replace cut off Russian supplies, the U.S. is effectively the only producer who can scale up to meet their urgent needs. And in the global view, the U.S. has a continued role to play as a supplier of natural gas with less leakage upstream.
This pragmatic approach to position the U.S. as a green supplier in energy markets is not at all limited to natural gas. As the world pushes to expand battery supply chains for new electric vehicles and grid storage facilities, or mine copper, steel, and aluminum for renewables and transmission construction, the energy transition will require growth in all sorts of raw materials production. Rather than use NEPA review as a delay mechanism to try and limit the first-order emissions of U.S. extractive industries, we should look at global supply chains in their totality and expand domestic production or production among like-minded allies with comparable labor and environmental protections to see where we can produce the maximal amount of new clean energy technology at minimal environmental impact.
Pass the Manchin-Schumer Permitting Proposal with Strengthened Timeline Goals: The quickest and best step available to speed up permitting and unleash the investments made in the IIJA, CHIPS, and IRA package is to pass the Manchin-Schumer proposal. Firming up shorter review timelines and simultaneously dedicating new resources to conduct thorough reviews quickly will help orient the federal government toward meeting the deployment challenges that come with these new investments. While the IIJA’s permitting provisions established 2-year average timeline goals, we recommend 2 years be set as the final goal for key energy projects and commend steps taken to ensure timely litigation and dispute resolution to further reduce uncertainty. Better prioritization will ensure that staff time and contracting funds are spent more efficiently, both by provisioning additional resources to reviews of strategically important projects (that tend to be the most complex) and by expanding eligibility for Categorical Exclusions for projects that ought to require less time under review.
Study and Consider Adopting Successful Permitting Reforms — including 2-Year “Shot Clock” — from Other Sectors: Congress should authorize the study of successful permitting reform in other parts of the economy, including the Federal Communications Commission’s adoption of time limiting “shot clocks” for the siting of cell phone and communications towers, with an eye toward adopting this time limit for appropriate energy projects. Applying these procedures to key green projects like grid-scale solar, wind turbines, battery storage, and transmission lines on public lands will ensure developers of rapid government decision-making that can increase certainty, reduce costly delays, and help speed up deployment. With all of the new resources available to agencies for permitting in the IRA, quick decisions will not undercut thorough examination of any localized impacts from these well-understood and environmentally critical projects.
Pass the SITE Act: The Streamlining Interstate Transmission of Electricity Act, introduced by Senator Sheldon Whitehouse, D-R.I., and cosponsored by Senators Martin Heinrich, D-N.M., and John Hickenlooper, D-Colo., (along with Representatives Mike Quigley, D-Ill., Sean Casten, D-Ill., and Scott Peters, D-Calif., in the House),[54] would empower FERC as the primary siting authority for transmission projects that are currently forced to go through lengthy and fragmented approval processes, and would also grant the ability to use a new eminent domain process for transmission that is updated to include stronger transparency and landowner protections than existing eminent domain authorities for other projects. Transmission deployment will also need to work its way through complex planning and approval processes at the private level, whether through transmission systems operators (RTOs and ISOs) or through utilities, that may benefit from further policy support and political engagement.
Maximize Regulatory Exemptions and Programmatic Reviews for Clean Energy Projects: The Biden Administration should build on its record of successful permitting improvements and continue to prioritize project delivery with all available administrative tools. Between the new ability to apply some existing Categorical Exclusions more broadly and the Manchin-Schumer proposal’s provision to expand CEs more generally, federal agencies should look for all available opportunities to speed up clean energy projects. Implementation of the Administration’s Permitting Action Plan, especially the use of programmatic reviews that can cover broad areas of analysis to be reused efficiently by individual projects rather than doing individual reviews on a project-by-project, can also ensure that agency resources are dedicated to speeding up project delivery and improving environmental outcomes. IIJA and IRA funding to clean up legacy pollution and provide technical assistance to disadvantaged communities will also help improve outcomes in line with the Biden Administration’s environmental justice goals for new energy deployment and ensure that meaningful public input, especially from disadvantaged communities, occurs early in review processes rather than serving as a source of uncertainty and delay through the courts later.
Reform at the State and Local Levels: At the state and local levels, policymakers should implement parallel reforms to slow or outdated review and permitting procedures. State and local jurisdictions are host to many crucial opportunities for clean energy deployment that will not rise to the federal level, including distributed renewable generation, local transportation networks, and denser forms of housing development. In New York, a new Office of Renewable Energy Siting established in 2020 has already improved on the older, more arduous approval process by consolidating and expediting siting and review requirements and empowering the State to override local restrictions on renewable energy that are “unreasonably burdensome”; this model should be emulated more widely by other states.[55] These actions could unlock even further clean energy investment, emissions mitigation, and economic growth opportunities for ambitious states and localities in the coming decades.
PreventNew Regulations from Hindering New Technologies: New permitting hurdles or regulatory bottlenecks may also emerge as innovative technologies like direct air capture, carbon capture, utilization and storage, CO2 pipelines, hydrogen hubs, advanced nuclear, and advanced geothermal wells scale up. In new industries, a light regulatory hand can help avoid stifling fast-emerging opportunities out of undue precaution. Congress and the Biden Administration should continue to keep their eye on the ball to seize on new opportunities to speed up deployment, help nurture these new industries, and provide U.S. energy workers and households with abundance.
Conclusion
Domestic Permitting Reforms Needed for U.S. Clean Energy and Climate Success
The unprecedented new levels of U.S. clean energy investment enacted in the last two years hold vast potential for the overall U.S. economy and will spur a new clean energy sector worth trillions each year, creating millions of good, new jobs, saving consumers and business tens of billions in energy costs, and expanding U.S. technology and energy exports. But as this report has demonstrated, these benefits will only accrue fully if sweeping new permitting reforms are enacted quickly, including both in Congressional pending legislation this year and additional federal and state reforms over time.
Meanwhile, if the recommendations in this report are adopted, they can also dramatically improve and increase overall U.S. and global climate protection, reducing U.S. greenhouse gas emissions by approximately 40% by 2030 below 2005 levels, cutting the near and long-term costs of climate change impacts and lower threats to public safety, protecting worker productivity; improving public health and reducing health care cost, and enhancing national and global security. More broadly, they will set the stage for far more effective U.S. and global climate protection.
Equally, however, if these reforms are not adopted, chances are we will face trillions of dollars in annual climate change impact costs in the U.S. and globally, and climate change impacts increasingly undermining domestic and global economic growth and security. The U.S. has made the initial policy investments to set the stage for clean energy and climate change success — now we must help ourselves, and the world, finish the job. No policy actions are more important.
APPENDIX:
SUMMARY OF KEY CLEAN ENERGY AND CLIMATE PROVISIONS IN IIJA, CHIPS, AND IRA BILLS:
The first two years of the Biden Administration and the 117th Congress have come together to produce a remarkable slate of energy and climate investments across three bills, two passed with significant bipartisan support. Tallied together, the Infrastructure Investment and Jobs Act, CHIPS and Science Act, and Inflation Reduction Act will infuse our energy systems and economy with approximately $514 billion in new funding (though the process is incomplete for CHIPS: In legislative terms, the spending laid out in the bill has been authorized but not yet appropriated). Working in concert, the investments in infrastructure, research and development, demonstration projects, and deployment incentives will help spur investment in technologies at various stages of innovation from basic research to commercialization and mass adoption across a wide cross-section of the U.S. economy.
The three bills work in complementary ways. The IIJA provides investment in infrastructure like the electricity grid, EV charging networks, and rail. The IRA provides broad funding and incentives to mobilize public and private capital together to build out clean energy generation and electrified end-use applications for businesses and households. And CHIPS, while primarily focused on semiconductors and basic science, may end up dedicating a significant portion of its funds to research and development in energy and climate tech that could keep the U.S. at the frontier of energy innovation. Together they represent a triumph for clean energy, American workers and consumers, and the fight against climate change — just how big of a triumph, though, will depend on our ability to turn those investments into new physical infrastructure and clean tech on the ground.
Infrastructure Investment and Jobs Act
Not just a roads and bridges bill, the IIJA will direct tens of billions to lower carbon transportation, innovative climate programs in hydrogen and carbon management infrastructure, and electric grid improvements and innovations. Funding for public transit, passenger and freight rail, ports, and water infrastructure will also bring climate or other environmental benefits such as lower air pollution and cleaner drinking water to the American public.
Out of the $550 billion in new spending, $65 billion will go to electric grid upgrades and energy supply chains like battery materials processing, $47 billion to resilience projects, $7.5 billion for EV chargers, and $7.5 billion for cleaner school buses and ferries. Aging nuclear plants will receive $6 billion in funding to prevent retirement along with $700 million for legacy hydropower. Clean energy research and demonstration projects will receive $21.5 billion in total, split between $8 billion for clean hydrogen, $10 billion for direct-air capture, carbon capture, and storage, and $2.5 billion for advanced nuclear power generation.
Outside of the energy system investments, the IIJA also funds infrastructure programs with other important environmental implications. $105 billion will go to rail and transit. School energy efficiency will receive $2.5 billion in funding and the Weatherization Assistance Program for low-income homes is increased by $3.5 billion. Also important for environmental justice benefits are $1 billion for a “Reconnecting Communities” program to address negative impacts of legacy infrastructure and $21 billion for brownfield remediation.
The climate effects of these spending programs are more difficult to estimate than those of the Inflation Reduction Act, but Princeton’s ZERO Lab expects that the IIJA would reduce emissions by over 100 million metric tons per year in 2030.[56] Part of this finding stems from the difficulty of modeling the specific programs included, but another factor that leads these models to underestimate the emissions reduction effects of the IIJA’s programs is that they will be working in concert with the IRA by providing the infrastructural foundation for all of the new clean energy generation, transmission, and other technologies funded by the latter bill’s tax credits and new spending programs. For the IIJA programs themselves, the ability to start construction on all of these new infrastructure projects will depend on the effectiveness of the collective effort to reform permitting, including measures in the bill itself discussed below and future steps needed including Senator Manchin’s Proposal. With the right steps on review, siting, and permitting, however, the Infrastructure Investment and Jobs Act is poised to make transformative progress on U.S. infrastructure development in both “traditional” and new clean energy projects.
Inflation Reduction Act
The Inflation Reduction Act, passed by Congress in August of this year, will spend $369 billion to fund new clean energy, transportation, building, and manufacturing programs, as well as new conservation, agriculture, resilience, and air pollution initiatives. The funding is split between tax credits for individuals and businesses and direct government-funded programs. A methane fee will provide oil and gas producers with a strong incentive to reduce upstream emissions of the extremely potent greenhouse gas in their supply chains, and a program to fund methane reduction technologies will help too.
The IRA envisions major climate and energy progress through a suite of new clean energy tax credits. Many of the tax credits build upon existing tax code provisions but extend, expand, and make them technology-neutral so as to encourage the most efficient uptake possible. Financial tweaks to enable direct-pay for some eligible organizations and improved transferability will enable broader uptake of these credits as well. Many of the credits are structured so that the maximum incentives are available only after meeting domestic content and labor requirements.
Zero-carbon generation in the form of solar, wind both on and offshore, existing and advanced nuclear, and geothermal, will all be eligible for the credits. New or expanded tax credits will also be made available for carbon sequestration, existing nuclear power, clean hydrogen, and “advanced manufacturing” of key clean energy tech components. Energy efficiency incentives for individuals and businesses are expanded as well. In transportation, the law seeks to boost the entire supply chain for electric vehicles, encouraging expansion of domestic production in mining and processing raw battery materials, assembling batteries, producing the vehicles, and providing adoption incentives for consumers. All told, JCT estimates that the total expenditure on these credits will total $148 billion through 2031.
On the direct government spending side, the IRA is ambitious. The EPA will receive $27 billion to create the GHG Reduction Fund, a lending facility for green projects. The DOE’s Loan Programs Office, a similar lending program for innovative energy demonstration and commercialization, advanced vehicle manufacturing, and Tribal energy programs, receives major increases in both funding, with roughly $17 billion in new appropriations, and vastly expanded lending capacity. The methane fee will disincentivize leakage of that potent greenhouse gas, which will also be mitigated with $1.5 billion in methane reduction funding. Ports will receive $3 billion to reduce air pollution. In transportation, domestic auto manufacturing is allocated $2 billion in grants to retool for production of EVs, hybrids, and other alternative clean fuel vehicles and $1 billion in grants will be available to state and local governments for heavy-duty vehicles like buses and garbage trucks. Rural energy systems will receive significant upgrades, with $10 billion appropriated for rural electricity cooperatives and $2 billion for clean energy adoption through the Rural Energy for America Program. Conservation, agriculture, and forests receive $20 billion all together, as well.
The climate and energy implications of the IRA are staggering, and modelers agree that the law will enable major emissions reductions over the coming decade. Estimates vary based on assumptions about fossil fuel costs and tech adoption, so each model provides a range of estimates that each vary slightly: Rhodium Group projects 32-42% reductions, Energy Innovation estimates 37%-41%, and Princeton’s ZERO Lab preliminary reports suggests that emissions could fall by an average of 42% across scenarios.[57],[58],[59]
Crucially, these models estimate economically optimal responses by individuals and industries covered by the bill’s programs and do not incorporate frictions posed by local siting conflicts or any permitting delays. Much like the goals of the Infrastructure Investment and Jobs Act, the climate and energy outcomes of Inflation Reduction Act depend on the ability of its funds to be spent on the clean energy technologies themselves rather than spending high proportions of project cost on lengthy federal reviews. As will be discussed below, the IIJA and IRA contain limited progress on this front, but work remains for Congress and the White House.
CHIPS and Science Act
The CHIPS and Science Act, touted primarily for its role in bolstering the domestic semiconductor industry and seeking to enhance U.S. competitiveness against China, also contains an underappreciated share of support for research in energy and climate. According to an estimate by the Rocky Mountain Institute, as much as $54 billion of the law’s $280 billion overall spending might flow to energy innovation.[60] Importantly, though, this funding has only been authorized and must still be appropriated by Congress before these funds will be spent.
The CHIPS and Science Act did not include explicit legal changes to permitting, but subsequent moves have acknowledged the importance of reducing permitting barriers in the bill’s policy area. After its passage in August, the Biden administration announced the creation of an interagency working group to coordinate permitting for high-tech manufacturing in light of the issue’s importance for achieving the bill’s goals.[61] Congress, too, has acted to reduce permitting barriers for high-tech industries, passing a companion bill to CHIPS that allows tech projects such as semiconductor fabs, data storage, and others to take advantage of the FAST-41 process.[62]
As a science and technology bill, the CHIPS programs are focused on the earliest stages of innovation rather than incentivizing the buildout of market-ready tech like wind turbines or electric vehicles. Instead, the climate contributions in CHIPS flow to important research hubs like the Department of Energy’s ARPA-E program, a newly established Directorate of Technology, Innovation, and Partnerships, and labs like the National Renewable Energy Laboratory along with provisions for STEM education and workforce development. Working through government research labs, universities, regional tech hubs, and in partnership with private-sector entrepreneurs, the law funds basic energy science, storage, advanced nuclear, clean steel, energy materials, and other research programs with the aim of keeping U.S. researchers at the cutting edge of the energy technology frontier. If fully funded and successful in this aim, the CHIPS and Science Act may end up being viewed as the most important move this Congress made for climate action in the period stretching from 2032 onward.
References and Notes:
[1] Lachlan Carey and Jun Ukita Shepard, “Congress’s Climate Triple Whammy: Innovation, Investment, and Industrial Policy,” RMI, August 22, 2022, https://rmi.org/climate-innovation-investment-and-industrial-policy.
[2] There are of course many other actions Congress and the Biden Administration can take to improve the economic and environmental outcomes and implementation of these major climate and energy bills. Three of these opportunities deserves specific mention here, even though they are not detailed topics of this paper: Enhancing workforce, education, and training to match worker skills to new high growth sectors, especially in clean energy. For U.S. workers to benefit maximally from these investments will require new workforce training regimes particularly those directly involving the private sector.
Improving investments in natural resource and agricultural policy, including forest, ocean, and land management. Efforts must increase to improve the role of the U.S. forest public lands and farms in helping to mitigate climate change emissions and impacts, including the potential for civilian Climate Conservation Corps. Finally, taken together these three major laws have very large fiscal and budgetary implications which cannot be separated from their other policy goals. The U.S. must continue to reduce our debt even as we make these investments.
[10]Energy Innovation analysis estimated the IRA bill would reduce carbon emissions 37% to 41% below 2005 levels by 2030. (Mahajan et al., “Modeling the Inflation.”)
[11] The Rhodium Group study said the bill would cut emissions 31% to 44% in the same period. (Ben King, John Larsen, and Hanna Kolus, “A Congressional Climate Breakthrough,” Rhodium Group, July 28, 2022, https://rhg.com/research/inflation-reduction-act/.)
[15] Raul M. Grijalva and Bruce Westerman et al., “Letter to Nancy Pelosi and Steny Hoyer,” Committee on Natural Resources (U.S. House of Representatives, Washington, D.C.), September 12, 2022, https://naturalresources.house.gov/imo/media/doc/2022-09-12%20Group%20NEPA%20Letter%20to%20Pelosi%20and%20Hoyer%20UDPATED%202.pdf.
[17] Daniel Adamson and Paul Bledsoe, “Streamline Power Line Permitting to Achieve Ira Climate Goals,” The Hill, August 18, 2022, https://thehill.com/opinion/energy-environment/3607335-streamline-power-line-permitting-to-achieve-ira-climate-goals/.
[18] “Article 10: Duration and Implementation of the Permit Granting Process,” Regulation (EU) 2022/869) of the European Parliament and of the Council (Official Journal of the European Union, June 3, 2022), 152/70-71, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0869&from=EN.
[29] “Baseline Performance Schedules for Environmental Reviews and Authorizations,” Federal Permitting Improvement Steering Council, April 8, 2020, https://www.permits.performance.gov/sites/permits.dot.gov/files/2020-04/FPISCRecommendedPerformanceSchedules2020_04062020.pdf.
[30] While comprehensive cost assessments for the permitting process do not exist, a 2014 GAO report found that DOE contractor costs for NEPA documents prepared between 2003-2012 cost an average of $6.6 million.
[43] “Accelerating Decarbonization of the U.S. Energy System,” National Academies of Sciences, Engineering, and Medicine, (The National Academies Press, Washington D.C.), 2021, https://doi.org/10.17226/25932.
[49] “Fact Sheet: Biden-Harris Administration Releases Permitting Action Plan to Accelerate and Deliver Infrastructure Projects on Time, on Task, and on Budget,” The White House, May 11, 2022, https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/11/fact-sheet-biden-harris-administration-releases-permitting-action-plan-to-accelerate-and-deliver-infrastructure-projects-on-time-on-task-and-on-budget/.
[50] Infrastructure Investment and Jobs Act, H.R. 3684, 117th Congress (2021-2022), https://www.congress.gov/bill/117th-congress/house-bill/3684/text.
[51] Sections 40003, 50301, 50302, 50303, 60115, 60402, 60505, and 70007 of the bill are all dedicated to review and permitting funding: Inflation Reduction Act of 2022, H.R. 5376, 117th Congress (2021-2022), https://www.congress.gov/bill/117th-congress/house-bill/5376/text.
[57] John Larsen et al., “A Turning Point for US Climate Progress: Assessing the Climate and Clean Energy Provisions in the Inflation Reduction Act,” Rhodium Group, August 12, 2022, https://rhg.com/research/climate-clean-energy-inflation-reduction-act/.
Democrats’ midterm election prospects are brightening as voters’ attention shifts from high prices to abortion and the Republicans’ subservience to former President Trump and rightwing extremism.
By striking down the constitutional right to abortion, the Supreme Court has galvanized suburban women. According to liberal analyst Ruy Teixeira, Democrats now have a 27-point lead among white, college-educated women in party matchups. The ruling has thrown Republican candidates on the defensive and is spurring higher Democratic registration and turnout.
Damning testimony by former Trump White House officials in the Jan. 6 hearings, plus Trump’s inexplicable refusal to hand over top secret documents he illegally took home after leaving the White House, also seems to be moving independent voters back toward the Democrats.
House, but they now call the Senate a tossup or favor Democrats slightly to hold it. Given the usual midterm trends, a split verdict in November would be a major victory for President Biden and his party.
But one key group – white working-class voters – hasn’t budged. Democrats trail by a whopping 25 points among these voters, whose unwavering support for Trump sustains his chokehold on the GOP.
FACT: 42 of the world’s 195 countries are monarchies.
THE NUMBERS: 21st century monarchies –
Western Hemisphere: Canada, Antigua, the Bahamas, Belize, Grenada, Jamaica, St. Kitts, St. Lucia, St. Vincent.
Middle East: Bahrain, Jordan, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
Europe: Andorra, Belgium, Denmark, Liechtenstein, Luxembourg, Monaco, the Netherlands, Norway, Spain, Sweden, United Kingdom.
Asia: Bhutan, Brunei, Cambodia, Japan, Malaysia, Thailand.
Africa: Lesotho and Swaziland.
Pacific: Australia, New Zealand, Papua New Guinea, Solomon Islands, Tonga, Tuvalu.
WHAT THEY MEAN:
Economist editor and poli. sci. pioneer Walter Bagehot explained in 1867 that monarchies hold public support better than republics because, being personal and symbolic rather than abstract and confusing, monarchies are more fun:
“Royalty is a government in which the attention of the nation is concentrated on one person doing interesting actions. A Republic is a government in which that attention is divided among many, who are all doing uninteresting actions.”
Recent TV statistics illustrate his thought in practice: 13.4 million Britons are said to have watched Queen Elizabeth II’s Platinum Jubilee ceremony last year, while a modest 1.3 million watched the 2019 Parliamentary debate on Brexit. Barbara Tuchman’s famous Guns of August introduction evokes the same mood with a bit less cynicism:
“So gorgeous was the spectacle on the May morning of 1910 when nine kings rode in the funeral of Edward VII of England that the crowd, waiting in hushed and black-clad awe, could not keep back gasps of admiration. In scarlet and blue and green and purple, three by three the sovereigns rode through the palace gates, with plumed helmets, gold braid, crimson sashes, and jeweled orders flashing in the sun. After them came five heirs apparent, forty more imperial or royal highnesses, seven queens—four dowager and three regnant—and a scattering of special ambassadors from uncrowned countries. Together they represented seventy nations in the greatest assemblage of royalty and rank ever gathered in one place and, of its kind, the last. The muffled tongue of Big Ben tolled nine by the clock as the cortege left the palace, but on history’s clock it was sunset, and the sun of the old world was setting in a dying blaze of splendor never to be seen again.”
Fifteen decades later, as the U.K. prepares for a similar event for his great-granddaughter next Monday — a moment of “sunset on history’s clock”, with attendant reflections on a life stretching from the Second World War, through the transition from Edward’s empire to Elizabeth’s Commonwealth, 15 Prime Ministers, etc., across seven decade of public service to the third decade of the 21st century — monarchy still seems to catch national and global imagination. Of the world’s 195* independent countries, 42 are monarchies — 15 Commonwealth realms including the U.K. itself, along with eight in the Middle East, one (Tonga) in the Pacific, two in sub-Saharan Africa, six in Asia, and 10 in continental Europe. R.I.P to a unique figure, and our sympathy with U.K. and Commonwealth friends this week.
* Using the State Department’s count of countries.
FUTURE READINGS:
Some looks back:
Then-Princess Elizabeth’s Children’s Hour broadcast during the Blitz in 1940 (pictured above).
And Danish Queen Margarethe, who marked 50 years last January, traces her antecedents back to a Viking named Gorm the Old (~ 900 A.D.) She is also queen of Greenland and the Faeroes Islands, technically autonomous realms “under the Danish crown.”
Also:
The current global count of monarchies is a bit less clear than the “42” figure suggests, since many countries retain hereditary ruling kings and queens of regions and ethnic groups incorporated in larger countries. Three examples:
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
In November 2016, Seattle voters approved a plan to expand the city’s light rail transit system. Almost six years later, the project still hasn’t properly begun. Instead, in January 2022 the city’s Sound Transit released a draft of their required Environmental Impact Statement, which ran more than 8,000 pages long. The final version of this EIS won’t be ready until 2023, at which point the project will already have spent hundreds of millions of dollars before a single shovel hits the ground. Current timelines, which might be delayed, call for services on the new lines to be open by 2039.
If a 23-year timeline from voter approval to project completion seems ridiculous to you, you’re not alone. America has a huge problem with not being able to build anything cheaply or quickly. One of the key obstacles is our environmental permitting process. The National Environmental Policy Act is one of America’s foundational environmental laws, but it now requires incredibly long review processes that end up doing more harm than good.
The Progressive Policy Institute (PPI) released a new report today calling for action from U.S. policymakers on the global “superbug” crisis. Antimicrobial resistant germs are killing tens of thousands of Americans annually, and the problem is only getting worse in the post-COVID age. The paper is titled, “The World Needs Better Incentives to Combat Superbugs”and is co-authored by Arielle Kane, Director of Health Care at the Progressive Policy Institute and Dr. Michael Mandel, Vice President and Chief Economist at the Progressive Policy Institute.
“Without changing how we use and develop new antimicrobials, millions more people will die, and health advances will be lost,” the co-authors write in the report.
Ms. Kane and Dr. Mandel outline a troubling public health trend that has far-reaching implications – including global economic stressors. The report authors note that roughly 35,000 Americans are killed annually by germs resistant to antimicrobials, or medicines like antibiotics and antifungals that are used to treat infections. These infections are on the rise, and without policy intervention, could kill 12 million people annually worldwide by 2050.
This crisis extends beyond a public health crisis – it is also putting the global economy at risk. According to a World Bank study, these infections could also reduce global GDP by 2%-3.5% by 2050.
The authors call for three methods in combating superbugs and the continuation of this trend, including curtailing the overuse of antimicrobials in medicine, limiting the use of antimicrobials on animals and agriculture; and new incentives to invest in the development of new antimicrobials.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Germs resistant to treatments kill roughly 35,000 Americans per year. Infections caused by drug-resistant bacteria, viruses, and fungi are on the rise, and without changes in policy, could kill 12 million people annually worldwide by 2050. Drug-resistant infections could reduce global GDP by 2%-3.5% by 2050, according to the World Bank.
The overuse of antibiotics and poor infection control during the height of the COVID-19 pandemic may have exacerbated antimicrobial resistance (AMR). AMR occurs when bacteria, viruses, fungi, and parasites evolve to no longer respond to treatments or when new pathogens that resist treatment emerge. Often referred to as “superbugs,” they pose the risk of severe illness or death.
If science doesn’t stay ahead of AMR, health care will slide backwards to the days when diseases now considered treatable — pneumonia and skin staph aureus infections — killed thousands of people each year. Yet today we’re seeing the spread of deadly strains of bacteria that can cause blood infections, pneumonia, and sepsis. That’s why the World Health Organization says that antimicrobial resistance is one of the top 10 global public health challenges threatening the practice of modern medicine.
The U.S. needs to combat these superbugs on three fronts:
• Curtailing the overuse of antimicrobials in medicine,
• Limiting the use of antimicrobials on animals and agriculture, and
• Investing in the development of new antimicrobials to stay ahead of nature.
BACKGROUND
Prior to the discovery of penicillin in 1928, diseases such as pneumonia, skin infections, meningitis, and whooping cough were often fatal. But once the use of antibiotics became mainstream in the 1940s, these infections became minor, easily treatable illnesses that no longer warranted a death sentence. The average life expectancy was extended by roughly 20 years because of the widespread use of antibiotics. But almost immediately, scientists discovered that certain types of bacteria were becoming resistant to penicillin and began working on second-generation antibiotics.
Unfortunately, scientific discovery hasn’t kept pace with evolutionary biology — both because superbugs evolve to evade antimicrobials and because new superbugs are also being discovered in the far reaches of the globe.
Without changes in scientific discovery and policy, AMR poses a risk to society and modern medicine. While pathogens are evolving to evade our current arsenal of drugs, scientific investment isn’t keeping pace in development of new antimicrobials. When COVID-19 emerged, the response was to invest in antivirals and there were roughly 260 COVID-19 antivirals in clinical development in 2020-2021. By contrast, there are only 73 new antimicrobials in clinical development because of poor incentives and a lack of investment.
PROBLEM STATEMENT
According to a recent study published in The Lancet, in 2019, 1.2 million people died directly from drug-resistant infections while AMR contributed to the deaths of 5 million additional people worldwide. This means that an infection may have exacerbated existing medical conditions and contributed to death rather than being the only causal factor.
Then came the COVID-19 pandemic. The Centers for Disease Control and Prevention (CDC) data show that resistant hospital-onset infections and deaths increased at least 15% during the first year of the pandemic. This could be because of an increase in hospital-acquired infection as more people were hospitalized, or because infection control languished as hospital staff were over-burdened with COVID-19 or because antibiotics were overused as people presented with ambiguous respiratory symptoms. But the fact remains that without changing how we use and develop new antimicrobials, millions more people will die, and health advances will be lost.
OVERUSE
About 80% of antibiotics used in the United States aren’t used by humans, but by livestock — cows, pigs, and chickens. Many industrial scale farms use antibiotics prophylactically — to prevent disease and to accelerate growth — which contributes to drug resistant pathogens living in the food and water supply. The European Union has recently banned prophylactic antibiotic use in livestock, but the U.S. and other countries don’t limit how farmers can use antibiotics.
But the overuse doesn’t stop there. In 2019, farmers under attack from a bacterial infection that threatened to decimate Florida citrus groves received permission from the Trump administration to use controversial bactericides on their trees. The Environmental Protection Agency allowed farmers across California, Florida, and Texas to use streptomycin and oxytetracycline — drugs typically used for syphilis, tuberculosis, and urinary tract infections — on their citrus plants. Using medical-grade antimicrobials increases the risk that pathogens develop resistance to these treatments in soil, water, and eventually humans.
Finally, antibiotics are overused in the practice of medicine, which is the final key driver of antimicrobial resistance. The CDC reports that 70% of the bacteria that cause two million hospital-acquired infections annually are resistant to at least one antibiotic. Although there were declines in hospital-acquired infections before the onset of the COVID-19 pandemic, hospital infections surged in recent years. This might have been because of increased antibiotics prescribed to prevent secondary lung infections brought on by a COVID hospitalization. Between March and October of 2020, 80% of hospitalized COVID patients were prescribed antibiotics.
While the prescriptions may be medically necessary, increased use contributes to resistance if science can’t stay ahead of AMR. Infection control efforts may have also lapsed under staff shortages and over-burdened hospitals.
Additionally, the CDC estimates that at least 30% of outpatient antibiotic prescriptions are unnecessary, most commonly prescribed for viral respiratory infections, such as viral bronchitis, otitis, and sinusitis. With millions hospitalized for respiratory problems, COVID likely exacerbated the overuse.
Even necessary antimicrobial use contributes to the weakened efficacy of treatments over time. Each time pathogens are exposed to antimicrobials, they have the opportunity to adapt to evade them. But unnecessary use means that patients have no medical need for the drugs, may damage their own health from taking the drugs unnecessarily, and add to the weakening of the drugs over time.
Back in July, federal regulators began requiring that health insurers disclose their prices for the services they cover both in- and out-of-network.
The idea is to help health care consumers better understand what their co-pays and liabilities may be depending on where they go for care.
The rule reveals, but doesn’t solve, a fundamental flaw of the U.S. health care system: widespread price variation.
As an experiment, I used a price estimate tool for OhioHealth, a large health system in Ohio. I typed in “Arthroplasty Hip/Knee Total,” a full knee replacement surgery, and searched the price as an uninsured patient. And within the same health care system, the price varied from $57,297 at Riverside Methodist Hospital to $67,842 at Grant Medical Center.
As a radical Democrat of a Jeffersonian persuasion, I’m no fan of hereditary privilege. But if anyone could make a monarchist of me, it would be Elizabeth Alexandra Mary Windsor, aka Queen Elizabeth II.
Her death at 96 today ends an extraordinary, epoch-spanning reign of 70 years. She was a teenaged princess during the Blitz, when Great Britain stood alone against the merciless Nazi war machine. On turning 16, she donned a uniform and served as a truck mechanic until the allied victory over Germany in 1945.
She ascended to the throne in 1952, in time to reign over the dissolution of the British Empire and its eclipse by the superpowers. On her watch came the long, pinched years of post-war deprivation, the nerve-wracking tensions of the Cold War and nuclear brinkmanship, and the outbreak of sectarian terrorism in Northern Ireland.
Of course, it wasn’t all trail and tribulation. The 1960s brought a tremendous explosion of art, comedy, theater, and music that produced the Beatles and the British Invasion and made “swinging London” a global capital of popular culture.
Margaret Thatcher, the end of the Cold War, Tony Blair and the Third Way, Brexit — through all the ups and downs and social churn, Queen Elizabeth was the constant, the sturdy embodiment of constitutional and cultural continuity. Hers was a reassuring role, and she played it bravely, intelligently, and with the old-fashioned virtue of grace.
My sympathies to her family and subjects. Elizabeth wasn’t America’s queen — but some of us will miss her, too.
FACT: The Trade Adjustment Assistance program expired June 30.
THE NUMBERS: TAA beneficiaries by sector, FY2021 –
Total
107,454
Manufacturing
80,588
Wholesaling
3,422
Information
2,227
Mining/energy
1,801
Retail
701
Agriculture
71
Accommodation/food service
0
WHAT THEY MEAN:
As 158 million American workers return from the Labor Day break to shops, offices, restaurants, factories, labs, grocery and retail checkout registers, construction sites, and bedside computer terminals, the Bureau of Labor Statistics abounds with good news. Businesses are hiring 6 million workers per month. Layoffs, contrariwise, are running about 1.3 million per month, 400,000 per month below pre-COVID levels. And the tally of unemployed workers, at 5.67 million last July, was the lowest since the golden summer of 2000 and barely half the 11.23 million currently open jobs.
Against this September’s blue and sunny labor-market skies, a policy cloud: the expiration June 30th of Trade Adjustment Assistance (“TAA” for short), a 60-year-old program dating to the Kennedy Administration which offers job training and other benefits to workers displaced by trade competition or job shifts abroad. The end of these benefits is a challenge. But it is also an opportunity for fresh thinking, laid out in a joint piece today by PPI’s Ed Gresser and Workforce Development Policy Director Taylor Maag, which suggests going beyond simple renewal to make TAA benefits more widely available to displaced workers regardless of the cause of job loss. A couple of quick descriptive points, and then a thought on the reason for a fresh approach:
Scale and Coverage: Over the past decade TAA served an average of 91,000 displaced workers per year. Coverage is nationwide; of the 107,454 workers in the 2021 TAA cohort, 12,638 are in Texas, 11,012 in Oregon, 3,112 in Minnesota, 1,420 in Connecticut, 1,231 in Kentucky, and so on. By sector, about 75% of last year’s TAA beneficiaries (80,588 of the 107,454) were in manufacturing, as compared to 1,809 in mining and energy, 61 in agriculture and 24,966 in variety of services industries (e.g., 701 in retail, 3,422 in wholesaling, 2,227 in information industries, none in accommodation and food service, and so on). Demographically, the 2021 beneficiaries have a median age of 51; two-thirds are men; half have high school degrees, GEDs or less; ethnically they are 65% white, 13% African American, 11% Hispanic, 9% Asian and 2% Native American.
Distinctiveness: After its 18 renewals and revisions, with especially significant ones in 1974, 2002, and 2015, TAA has become a sort of pilot program in active labor-market policy. Its services go well beyond between-jobs income support to include self-help options for workers with widely differing career goals and local opportunities. Workers certified as TAA-eligible receive a menu of benefits: two years of job training for those interested in new career paths; temporary wage insurance for older workers taking lower-paying jobs; health care tax credits; and relocation support for workers planning a move to areas with more employment opportunities.
A comment on results: Examining the results in 2018, New York Fed researcher Ben Hyman found a strong though temporary benefit: “Ten years out, TAA-trained workers have $50,000 higher cumulative earnings, driven by both higher incomes and greater labor force participation. Yet annual returns fully depreciate after ten years. … Returns are further concentrated in the most disrupted regions.”
Where to now? The original argument John F. Kennedy made for TAA, as a complement to the Trade Expansion Act of 1962, provides a useful point of departure. His case, made with the standard New Frontier clarity and force, is that reducing tariffs and opening foreign markets promotes growth, fights inflation, helps new industries grow, and raises consumer living standards; but can also increase competition and stress at home. In such cases, he says:
“[C]ompanies, farmers and workers who suffer damage from increased foreign import competition [should] be assisted in their efforts to adjust to that competition. When considerations of national policy make it desirable to avoid higher tariffs, those injured by that competition should not be required to bear the full brunt of the impact. Rather, the burden of economic adjustment should be borne in part by the Federal Government. … Just as the government met its obligation to assist industry in adjusting to war production and again to return to peacetime production, so there is an obligation to render assistance to those who suffer as a result of national trade policy.”
Kennedy’s logic held up for six decades and could be used again for a simple renewal. But it has a couple of weaknesses that suggest the need for a bolder approach. One relates to the particular circumstances of 2022 as opposed to those of 1962, 1974, 2002, or 2015. The other is more basic and troubling.
First, Kennedy and his successors argued for TAA as part of a national trade-liberalizing policy, in which the various benefits of an open market and export growth should be balanced with support for dislocated workers in previously sheltered industries. But with the U.S. at least for now not trying to cut tariffs, trade-related dislocation appears more likely to come from the opposite direction – trade lawsuits of the type that destabilized the solar power industry this spring, the costs that Trump-era tariffs on industrial inputs impose on U.S. machinery and automotive manufacturers, or (indirectly) retaliations against U.S. exporters. In these circumstances the case for a special program for import-related job loss is probably weaker than it was in the past.
Second, Kennedy’s case for special help for trade-displaced workers has always had an unspoken and troubling corollary: some workers in distress, particularly in the manufacturing sector, get more help than others. Specifically, the manufacturing sector accounted for 7.0% of layoffs in 2021, and 6.2% of layoffs over the last decade. Meanwhile, displaced manufacturing workers made up 75% of TAA beneficiaries in FY2021 and 72% over the past decade. Retail, construction, and food service/accommodation workers who make up larger shares of annual U.S. layoffs typically make do with standard unemployment insurance. In more individual terms, TAA’s self-help policy options are much more open to a displaced auto plant worker than to a displaced auto shop worker, or to a textile worker than to a waitress or a gas station attendant.
With these facts in mind, Gresser and Maag suggest that Congress should consider something new: not removing TAA benefits as options for trade-dislocated workers by simply letting the program expire, but making them more broadly available to displaced workers, regardless of sector or cause of job loss. This is a complex question, requiring some budget thinking and possibly some reorganization of job-training and displaced-worker support more generally. But as they note in their post-Labor Day piece today, there is no better time to think about reforming and revising old labor policies than a sunny year in which jobs are plentiful and layoffs rare.
FUTURE READINGS:
TAA data and status
DoL’s TAA database, with counts of petitions and worker certifications from 2010 forward.
An evaluation from Ben Hyman of the New York Fed, 2018.
And a Ways and Means Committee renewal hearing featuring workers, firm owners, and state officials, 2021.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
What should the Biden administration and Congress do as Trade Adjustment Assistance expires? Consider a new approach: Renew it but drop the trade clause and reach more workers.
John F. Kennedy’s Trade Act of 1962 marked a watershed in U.S. trade policy, leading after a few years of negotiations to the largest single tariff cut in American negotiating history. It was also, though this is less well-remembered, a watershed in worker adjustment policy. The 1962 Act created the Trade Adjustment Assistance (TAA) program, which helps workers losing jobs to import competition by offering benefits that went well beyond the support available for other displaced workers. Kennedy’s argument for it noted that reducing tariffs and opening foreign markets promotes growth, fights inflation, helps new industries grow, and raises consumer living standards; but can also increase competition and stress at home. To address this, he suggested a new federal support program:
“[C]ompanies, farmers and workers who suffer damage from increased foreign import competition [should] be assisted in their efforts to adjust to that competition. When considerations of national policy make it desirable to avoid higher tariffs, those injured by that competition should not be required to bear the full brunt of the impact. Rather, the burden of economic adjustment should be borne in part by the Federal Government. … Just as the government met its obligation to assist industry in adjusting to war production and again to return to peacetime production, so there is an obligation to render assistance to those who suffer as a result of national trade policy.”
Over the six decades since, TAA has represented a liberal-internationalist bargain, blending trade liberalization and support for exporters with a commitment to vulnerable workers. As Kennedy and each of his Democratic successors recognized, openness to foreign trade helps to catalyze the U.S. economy but can also harm less competitive domestic companies and their workers. They also recognized the value of a federal commitment to an active labor market policy that helps displaced workers develop new skills and find career paths, enabling them to support families and continue their contribution to communities and to the nation’s economy. Congress has reauthorized TAA 18 times since. The renewals in 1974, 2002, 2011, and 2015 were particularly ambitious, with the 21st century renewals adding coverage for workers grappling with internet-based competition, workers displaced by plant shifts abroad, and farmers. The most recent iteration, completed in 2015, offered reemployment services including training (on the job training, academic training, and apprenticeship), income support for those enrolled in training, job search services, relocation, and transportation benefits as well as wage subsides for older workers.
TAA thus pledged that as the U.S. reduced trade barriers, those who lost their jobs due to shifts in production and foreign labor would be adequately supported by the government to find new and often better employment. In FY2021, for example, the Department of Labor certified 801 petitions for TAA support, providing help to over 107,000 displaced workers. A statistical snapshot drawn from the Labor Department’s most recent annual report finds that 80,000 of these beneficiaries or 75% of the cohort come from the manufacturing sector. Their median age is 51; half half high school degrees or GEDs, 31% some additional schooling, and 19% are college graduates. By gender, two-thirds are male; by race and ethnicity, two-thirds are white, 13% African-American, 11% Hispanic, and 9% Asian-American.
However, in the past decade since the 2015 reauthorization, the program has changed little. Most recently, Congress left TAA out of the stimulus and recovery packages passed in response to the COVID-19 pandemic and likewise out of the recently passed CHIPS and Science Act. As a result, TAA officially expired at the beginning of July 2022, and workers displaced by trade competition or job shifts abroad no longer can receive its support.
Where to now? TAA often received criticism, sometimes on budget grounds and sometimes on efficacy grounds. Its critics claim that the program failed to reach eligible workers, due to lack of program awareness and hoops to access services. As Andrew Stettner of The Century Foundation observed in a 2021 appearance before the House Ways and Means Committee, “Workers can only qualify for TAA if a union, local government agency, or a group of three or more workers files a petition that proves that job losses at a specific facility/unit are directly tied to trade. This is a laborious process that takes an average of 61 days from the time a petition is filed (which itself may come after a plant is closed), and as a result many potentially qualified workers do not receive coverage.”
These critiques have some force. To Stettner’s point, TAA’s impact is inherently limited by its qualification rules: A worker seeking help must know first that a special program for trade-related job displacement exists, and then be able to show that trade or jobs abroad contributed to their job loss.
Nonetheless, bipartisan policy analysis shows that TAA has had some significant success over time. New York Fed economist Ben Hyman in 2018 after comparing employment outcomes for TAA beneficiaries with outcomes for non-beneficiaries in similar circumstances, found that “ten- years out, TAA-trained workers have $50,000 higher cumulative earnings, driven by both higher incomes and greater labor force participation,” though earnings converge after a decade. An earlier Peterson Institute for International Economics paper highlighted significant change for the better in the 2002 TAA renewal, including increased uptake in services sectors and increased participation in skill development opportunities by affected workers. On the center-right, a recent AEI report found that TAA generally has had long-term impact on earnings for workers receiving services, especially those that received the full benefit of skills training. Additionally, as part of the 2011 reauthorization, the TAACCCT grant program was created. This program encouraged partnerships between community colleges and the workforce system to develop accelerated pathways to careers for adult learners. And a report by New America found individuals that participated in TAACCCT-funded programs were more likely to complete their training, earn a relevant credential, and find in-demand employment.
Not only have multiple sources and research found that TAA has had considerable and valuable impact for trade-displaced workers, but TAA also has a potentially greater importance as a pioneer of generous benefits that other federal programs do not always consistently offer to displaced workers. These include the length of the training benefit (two years) for workers committed to developing new skills, wage subsidies for those in training or based on age eligibility, and the option for workers in particularly distressed areas to get financial support for relocation and job search elsewhere. This type of holistic approach is increasingly important to ensure people persist and complete in their training to prepare for in-demand opportunities. And it is a good model for a better, more active support program for workers generally.
This last point leads to a final, unsettling fact for advocates of the TAA program. TAA has by nature always included a troubling inequity, inherent in Kennedy’s original case for special support for workers displaced by import competition. That is, workers who lose jobs to trade competition can get more generous benefits than workers who lose jobs to recession or domestic competition. Is there really a strong ethical case to distinguish between (say) a displaced clothing factory worker and a displaced waitress or gas station attendant, and view the former as more in need of benefits or more entitled to benefits than the latter?
So, we return to the expiration of the program this year, and potential next steps. By missing the opportunity to renew and update TAA at all, federal policymakers are yet again forgetting about working Americans and the policies that were designed for them specifically. On the other hand, with the Biden administration so far not seeking to open new export markets and declining opportunities to liberalize the U.S. trade regime, does the historic liberal-internationalist bargain — more open markets, support for displaced workers — still apply? And if it is less applicable in current circumstances, should we not therefore think about an opportunity to generalize the program, so that it supports not only trade-affected workers but other workers in industries that have been hard hit over the past two and a half years from the pandemic and technological advancement?
Looking ahead, here is our take: Since TAA is expired, Congress should take this time to think about ways we can do better. Here are three ideas that could address critiques to the program and make sure it better serves workers in our 21st century economy.
Expand Eligibility: Consider expanding services to reach a broader group of workers — perhaps any worker – facing dislocation, for international or domestic reasons beyond their control. This would still include trade-affected workers but would also open the benefits to those dislocated from industry decline based on automation, climate-related provisions (i.e., coal) and/or fallouts from the pandemic (i.e., retail & hospitality industries).
Market & Streamline Services: TAA Administrators must better ensure that eligible workers know the program exists and are able to access benefits. This means a more robust public relations campaign, better partnership with other systems (i.e., workforce boards, community colleges) and community-based organizations that are reaching people on the ground as well as collaboration with employers so they can accurately communicate opportunities to at risk employees.
Prioritize Skill Development: While reemployment services like job search are important, we need to do a better job of helping people prepare themselves for new in-demand jobs, which often means opportunities to up-skill. Skill development opportunities available through TAA are critical to make sure dislocated workers find employment that helps them find new and better jobs.
To make these changes work, policymakers also must think about the budgetary implications. In FY 2021, prior to expiring, TAA served a total of 107,000 workers with an appropriation of $633.6 million dollars. The precise number of workers a generalized program would serve is unclear, but current statistics on TAA use and the universe of potential new beneficiaries can provide some guideposts. On one hand, the 80,000 manufacturing workers in the FY2021 cohort is about 6% of total manufacturing-sector layoffs, and total layoffs in a year typically average about 1 million. On the other, the most likely users are long-term unemployed workers unable to find new jobs quickly, and the total long-term unemployed population has varied in recent years between the current 1.2 million and 3 million. Such figures suggest that a million displaced workers might be something of an upper bound. To serve this many dislocated workers across an array of disrupted industries and the long-term unemployed, TAA’s budget would have to increase about ten-fold, reaching roughly $6 billion annually. However, that number shouldn’t alarm policymakers and probably can be reduced. Determining whether a particular worker’s layoff is ‘trade-related’ requires a significant investment in administrative overhead and costs. A more generalized program would reduce the time and money spent on proving eligibility. Additionally, with an expanded TAA, other federal workforce programs may be duplicative and unnecessary. This means programs could be consolidated or cut, which could also help reduce costs.
In sum, the TAA program is an important one, delivering valuable benefits to hundreds of thousands of workers each year. Congress should remember this impact and make sure it does not simply disappear. It should also remember, though, that trade is far from the largest cause of job displacement, and all workers — especially those in lower-skilled jobs that are subject to increased disruptions as the economy changes — deserve support. With the program lapsed, federal policymakers should consider ways to improve and broaden it. An updated policy could focus beyond trade and international competition, and provide adjustment assistance for all economic disruption, would help empower working Americans to advance by giving them access to the skills and financial support necessary to find new and emerging in-demand work. This is critical to enhance workers’ confidence, broaden economic opportunity, and help our nation grow from the bottom up and middle out.
In November 2006, Superior Court Judge Peter Busch upheld a preliminary injunction against the city of San Francisco, preventing them from moving forward with their plan to build new bike lanes and bike infrastructure. Busch ruled that the city hadn’t properly followed the environmental review process mandated by the California Environmental Quality Act, or CEQA. In November 2008, San Francisco was finally finished with the review. All it took was more than 2.5 years, 1,353 pages and more than $1 million in direct costs. This allowed San Francisco the chance at a public hearing in January of the next year, after which the bureaucratic process could either continue or face more delays.
If you think a two year, million dollar, 1,000+ page environmental report simply to build new bike lanes in an already developed city seems absurd, you’re not alone. Americans are more concerned than ever about addressing climate change, but one of America’s foundational environmental laws is functionally preventing us from doing so. The National Environmental Policy Act—and its state level equivalents such as CEQA—make it far too difficult to take major actions that would help lower carbon emissions. NEPA is a fundamentally broken piece of legislation and should be entirely repealed.
Since the Civil War, the president’s party has had a net loss of seats in 36 out of 39 midterm elections. However, this year could be different. With the Supreme Court’s decision to repeal a women’s right to choose, Democratic voters have become increasingly energized. That, combined with a slate of extremist Republic candidates, has increased the odds that Democrats will hold the Senate and turn what was expected to be a red wave in the House of Representatives into a drip.
But if Democrats want to further strengthen their chances in the Senate and the House, they will need to restore parent’s trust in all our schools.
As Will Marshall, founder and president of the Progressive Policy Institute recently noted, faith in public schools is approaching a nadir. Less than 30% of Americans have confidence in their children’s schools, and since the onset of the pandemic, 1.4 million children have left the public school rolls.
As Americans across the country celebrate their long weekend, marking the end of summer, PPI wants to remind everyone the reason for this holiday — American workers — and offer a new way for our government to celebrate them.
Labor Day became a federal holiday in 1894, to acknowledge the contributions and achievements of American workers. As the economy shifted from agriculture to manufacturing, workers pressed for better working conditions and higher pay, and the holiday commemorated that struggle.
While today, we applaud those who fought for progress, we also must acknowledge that we are living in a very different world than we were a century ago. Today, jobs are changing, and new jobs are being created due to technical advancements. As a result, workers, especially those in jobs at risk of being automated, need to learn new skills to remain relevant. On top of that, the nation is still recovering from a global pandemic which disrupted service industries that are critical to our nation’s tourism, health, and learning, including retail and hospitality industries as well as health care and teaching careers.
We need new policies that truly help American workers economically advance.
Yet federal policymakers have done little to support working Americans that have been hardest hit by these shifts. While stimulus dollars provided workers emergency assistance, there has been too little policy innovation aimed at getting people back to work in good jobs that offer new opportunities for upward mobility.
This neglect has affected workers returning to jobs that are facing severe labor shortages — changing hours and ways of operation (i.e., health care workers and teachers); workers that have been laid off and need re-skilling to find in-demand employment and workers that have left the workforce entirely due to personal and familial needs. These challenges are affecting workers across an array of careers, industries and circumstances— leaving more and more people feeling frustrated and forgotten.
This Labor Day, PPI urges our government, to recommit to workers across our nation. This recommitment does not mean pouring more dollars into the status quo, but focusing on quality skill development strategies — deploying new and innovative policies that work to solve persisting challenges facing workers.
Federal policymakers should continue to look at apprenticeship models, scaling these opportunities across an array of industries to ensure more Americans can access quality earn and learn programs. They should expand opportunities in the short-term — including more flexible postsecondary programs that better meet the needs of individuals, their families and businesses — and they should work to harness the power of private markets and innovations in technology to provide new ways of delivery learning that are tied to industry demand.
These approaches can help solve talent shortages in industries that are key to our health, education and safety; create opportunities for individuals to access skill development opportunities so they can prepare for the jobs of today and tomorrow and provide the necessary supports individuals need to retain employment while also supporting their families.
This is critical to ensure American workers are better off, can economically advance, and we avoid further leaving behind those that are working so hard to keep America thriving. If we could do that — now that would be something to celebrate.
FACT: 1.4 million Americans have Pacific Island roots.
THE NUMBERS: U.S.-Pacific Island economic links –
Aid $20 million
Imports $486 million
Remittances $300 million
WHAT THEY MEAN:
Speaking last month to the Pacific Islands Forum (the annual assembly of 18 countries and territories around the South Pacific*), Vice President Harris regretfully observes that “in recent years the Pacific Islands may not have received the diplomatic attention and support that you deserve.” To make up for lost time, she announces an array of new political and economic supports, to be finalized this September at the first U.S.-Pacific Islands summit ever held:
Opening new embassies in Tonga and Kiribati (both countries of about 100,000 people, now served by the U.S. embassy in Suva, the capital of Fiji), along with an AID office in Fiji and a new Peace Corps volunteer program.
Raising annual U.S. aid to Pacific Island states from $21 million to $60 million for “economic development and ocean resilience” along with “infrastructure programs that are sustainable, high quality, climate friendly, and very importantly do not result in insurmountable debts.”
Pledging to conclude a long-pending South Pacific Tuna Treaty and cooperative policies to reduce illegal/unreported/unregulated fisheries.
All this will be amplified, presumably with more ideas, by a “U.S. National Strategy on the Pacific Islands” to be published sometime after the summit. Some explanation below, plus a couple of suggestions:
Background: The South Pacific expanse spans 3,000 islands, spread out over an expanse of sunlit water as large as Asia, Europe, and North America combined. These islands combine to form 14 independent countries, two French departments, one U.S. state plus three insular territories. They are home to 50 million people, of whom 35 million live in Australia and New Zealand, 9 million in Papua New Guinea, 1.5 million in Hawaii, and 2.5 million in the other 15 countries and territories combined.
This region suddenly seems like an arena for big-power diplomatic competition. Some of its rapidly proliferating Chinese aid programs are civilian and visually striking: a ring road around Papua New Guinea’s capital Port Moresby, a large hospital on the coastal road east of Suva in Fiji, a “royal military band” facility in Tonga. Others carry murkier overtones of intelligence and high naval strategy: leaked mutual defense and telecommunications arrangements between China and the Solomon Islands, the sudden withdrawal of coral atoll-state Kiribati from the Forum after a visit by the Chinese Foreign Minister, etc. With this subtext, the VP’s concern and interest presumably goes beyond abstract hope to raise the American diplomatic profile.
The policy outlined in her speech focuses, along with climate and fisheries policy, on aid and infrastructure development. These are useful and needed no doubt; on the other hand, the impact of aid likely has some limits. On one hand, the Pacific Islands are already the world’s most aid-saturated region. By the Sydney-based Lowy Institute’s calculations, they receive $2.4 billion in aid annually. This amounts to 10 percent of the region’s economy, a figure sixteen times higher than the 0.6% average for all low- and middle-income countries. Adding more may encourage the governments of very small countries – setting aside Papua New Guinea, the populations range from 11,000 in Nauru to 900,000 in Fiji – to take on more aid than they can manage.
More conceptually, a strategy focused particularly on aid may miss an area of American “comparative advantage”, which Harris’ speech notes in observing that 1.4 million Americans trace family to the Pacific islands. A useful insight here comes from the influential 1993 essay Our Sea of Islands, in which the late Tongan intellectual Epeli Hau’ofa argued that the people of Pacific island nations should see themselves as citizens of a large ocean continent extending to expatriate communities in the United States, Australia, and New Zealand, rather than as comparatively helpless residents of small and isolated islands. He notes in particular the large role these communities play in island economies through remittances and exchanges of goods (clothes, TVs, refrigerators etc. going to the islands; crafts, agricultural goods, information coming in turn), and concludes with a caution against very heavy reliance on aid: “Ordinary Pacific people depend for their daily existence much more on themselves and their kin, wherever they may be, than on anyone’s largesse.”
With this in mind, two policy options for the VP and her administration associates as they think about next steps:
1. Trade preferences:Americans bought $0.5 billion worth of goods from Pacific islands last year. This is a tiny sum in the $2.8 trillion world of U.S. goods imports, but a large part of the islands’ export portfolio. A simple way to bolster it would be renewal of the Generalized System of Preferences, the main U.S. trade program for developing countries, which lapsed in 2020. Before the lapse, it provided substantial support for growth and employment through candied and sushi-grade ginger and taro from Fiji, canned tuna from the Solomon Islands, taro and cassava from Tonga. A more ambitious option would be creation of a special trade program analogous to the Caribbean Basin Initiative’s permanent duty-free access to the U.S., which could offer additional support for processed fish exports.
2. Reducing remittance costs: The 1.4 million Americans from Pacific Island and Native Hawaiian families noted in Harris’ speech are a source of income almost equal to trade. Remittances — wires of money from workers abroad to families — account for 7%-10% of Pacific island GDP, and peak at levels of 43% of GDP for Tonga and 21% for Samoa. Assuming a roughly equal division between the islands’ three main remittance sources (the U.S., Australia, and New Zealand), this would probably mean about $300 million per country. The challenge is that, by World Bank tallies, Pacific islanders abroad pay a lot more than other remittance senders for their generosity: bank and wire fees eat up 11% of remittance value for Vanuatu, 9.8% for Tonga, and 8.4% for Samoa. Reducing these costs to 2.9% of remittance — the figure for equally remittance-reliant El Salvador — this would free up as much as 2% of national income for some countries, all of which would go directly to families.
Summary: Harris’ remarks are a thought-provoking read and a good beginning for policy; but one has room for more.
* Australia, Cook Islands, Marshall Islands, Federated States of Micronesia, Fiji, French Polynesia, Marshall Islands, Nauru, New Caledonia, New Zealand, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, and associate member Tokelau. Outlier Kiribati withdrew on July 14.
FUTURE READINGS:
Some quick geography/economy background: Geographers traditionally divide the South Pacific into three areas with Fiji more or less in the middle. Melanesia, just north and east of Australia, includes Papua New Guinea, the Solomon Islands, New Caledonia, and Vanuatu, which have large extractive-industry economies driven by timber and mining exports to China. Polynesia, the largest expanse of ocean, goes east from Fiji through Tonga and Samoa to Tahiti, Hawaii and Easter Island (and also includes New Zealand’s Maori community), with fisheries along with taro, vanilla, ginger, and other specialty agriculture. Most Polynesian trade is with the U.S., Australia, and New Zealand. Micronesia, in the north heading toward Guam, has six countries mostly made up of small coral atolls with especially high climate change risk; three of these (Palau, the Marshall Islands, and the Federated States of Micronesia) have special trade access to the U.S. dating to their independence. Fiji, in the center, is a middle-income state with a diversified economy with the region’s main air and maritime logistics centers and the University of the South Pacific, along with a large tourism sector, agriculture, and light manufacturing.
U.S. policy:
Remarks by Vice President Kamala Harris to the Pacific Islands Forum.
The White House promises more in the run-up to next month’s Summit.
A regional overview from the Forum Secretariat looks at climate change response, COVID, nuclear weapons tests legacies, and big-country diplomacy.
Epeli Hau’ofa’s Our Sea of Islandsessay and other writings on Pacific islands culture and government in We Are the Ocean.
The Diplomat on Kiribati’s withdrawal from the Forum.
Brookings Institution China scholar Patricia Kim on the possible implications of the China-Solomon Islands security document.
Trade:
Trade Fact series editor/PPI Vice President Gresser, then in government, visits a Fijian ginger factory and GSP exporter in 2018. They were buying sushi-quality vinegar from Oregon and Florida-made machinery, and selling candied ginger and sushi ginger back.
And a look at the GSP program, with a friendly critique of Congressional reauthorization bills and suggestions for next steps.
Remittances:
The World Bank on remittance flows to Pacific Island nations during and after COVID.
… and the Chinese Embassy in Tongan capital Nuku’alofa reviews deliveries of water tanks, computers, and tractors along with building a “royal military band” facility.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
