President Biden is so bullish on his Build Back Better (BBB) proposal that it was the centerpiece of his remarks last week at the global climate summit in Glasgow stating, “My Build Back Better framework will make…the most significant investment to deal with the climate crisis that any advanced nation has made ever.” He even touted a “Build Back Better World” framework. But Biden missed an opportunity to bolster his environmental justice commitment in announcing BBB and never explicitly mentioned Justice40 in his remarks about BBB or in Glasgow.
Justice40, the environmental justice mandate that Biden ordered just days after taking office, faces its first real test in the $1.75 trillion BBB bill. BBB is poised to deliver a historic investment in clean energy and climate solutions, to the tune of $555 billion. Justice40 demands that at least 40 percent of the benefits of federal funding flow to disadvantaged communities. It directs agencies to apply the Justice40 standard to “reflect existing authorities agencies may possess for achieving the 40-percent goal as well as recommendations for legislation needed to achieve the 40-percent goal.”
After analyzing HR 5376’s components, we find the BBB bill falls far short of upholding the mandate, with only about 15 percent of funds ($82 billion) aligned with Biden’s Justice40 pledge. Last week, BBB stalled before a vote, in part to allow the White House Office of Management and Budget (OMB) to analyze the bill’s long-term economic consequences.
Greta Thunberg, the heralded teen climate activist, issued her own characteristically blunt assessment during a Youth4Climate summit saying, “Build back better. Blah, blah, blah. Green economy. Blah blah blah. Net zero by 2050. Blah, blah, blah. This is all we hear from our so-called leaders. Words that sound great but so far have not led to action. Our hopes and ambitions drown in their empty promises.”
Biden, for his part, seemed to lean into the critique noting, “We’ll demonstrate to the world the United States is not only back at the table but hopefully leading by the power of our example. I know it hasn’t been the case, and that’s why my administration is working overtime to show that our climate commitment is action, not words.”
Justice40 requires that both OMB and Congress also consider the long-term equity impacts of major energy and climate investments. There is a precious window to reassess and shift how these investments are structured to ensure the most historically impacted communities are not shut out of the benefits of this clean energy transition. For too long, impacted communities have been under the shadow of smokestacks while their wealthier, whiter counterparts have enjoyed both clean air and generous incentives for energy efficiency and rooftop solar.
Does BBB meet the Justice40 mandate?
As an environmental justice policy, Justice40 directs government agencies to ensure that at least 40 percent of the overall benefits of federal investments in clean energy and climate infrastructure flow to disadvantaged communities. Justice40 acknowledges decades of environmental burdens suffered by Black, Brown and Indigenous communities and those on the frontline of fossil fuel energy production. Justice40 arises from what community organizers have been calling for across generations, including path-breaking work in California and coalitions such as NY Renews.
Disadvantaged communities are unlikely to see more than a sliver of the benefits from BBB. We combed BBB’s HR 5376 and other reviews of the bill to create this analysis of funding allocation. Most funding is in clean energy tax credits ($320 billion or 58 percent), primarily for clean energy generation and electric vehicles.
The utility-scale clean energy investments — which include transmission lines, loan guarantees (including nuclear) and air source carbon capture payments — create new, investor-owned infrastructure that would lock ratepayers into decades of additional charges. There is no clear requirement for jobs, which Biden celebrates, to go to impacted communities and few identifiable wealth-building opportunities. There are real risks that households would be subjected to higher electricity costs while remaining tied to an unreliable grid.
Regarding EV tax credits, couples can earn up to $800,000 and still take full credits up to $12,500. A household earning $45,000 that lacks tax liability could instead see $0, despite calls for these credits to be restructured as rebates at the point of sale. Historically, we know that higher-income households — mostly white households — capture the vast majority of clean energy tax credits. Black households, at 14 percent of the population, purchase just 2 percent of electric vehicles.
By comparison, meaningful Justice40 provisions in BBB have small budgets — just $82 billion clearly advances the Justice40 goals. These include about $1 billion in dedicated funding for Tribal nations plus $20 billion in clean energy loan guarantees, dedicated funding for the cleanup of pollution ($13 billion), a dedicated electrification budget ($6 billion), 50 percent additional funding for home energy retrofits ($2.2 billion) and used EVs credit (up to $2,000 per purchase). There’s $150 billion for affordable housing, yet there’s a need to combine housing rehabs and construction with a focus on efficiency and distributed generation and storage, not just build to code.
Despite just 15 percent of BBB aligning explicitly with Justice40, numerous federal agencies can exercise their authority to direct a greater share of the remaining $473 billion to directly benefit disadvantaged communities.
Will there be a Justice40 era?
If we are going to hit Justice 40 objectives and truly “build back better” we must do more to put justice at the center of this legislation. We are hopeful that Biden’s commitment to Justice40 is authentic. The administration has made great strides in preparation for this moment, from installing 26 high-profile leaders from communities of color and frontline communities as the White House Environmental Justice Advisory Council (WHEJAC) to appointing dedicated advisors on energy justice.
Those of us in the trenches have paused aspects of our work to serve this administration because we believed that a different outcome was possible. We have toiled to make detailed recommendations and engaged in hundreds of hours of public meetings that have generated thousands of pages of notes, dashboards, and draft data sets to implement Justice40.
If Thunberg is right, that the recognition of justice in BBB is mostly lip service, then the work of some of this nation’s most highly regarded, lifelong environmental justice activists will again have been tokenized. Congress and OMB must ensure that the largest climate investment in American history flows to the Black, Brown, Indigenous and lower-income communities that have weathered the costs and pollution burdens of fossil fuels.
This time, we have the Justice40 mandate to ensure they cannot be excluded from the benefits of clean energy. We just need the will to uphold it.
Justin Schott is project manager of the Energy Equity Project at the University of Michigan.
Kyle Whyte, Ph.D., is a professor at the University of Michigan and a member of the White House Environmental Justice Advisory Council.
Their opinions are their own and do not necessarily reflect those of the University of Michigan.