Does the Infrastructure Investment and Jobs Act put sustainability in US law?

Environment

The IIJA contains several provisions that address the environmental challenges of the United States and the world.

• Climate change mitigation and adaptation: Included in the IIJA are funds for carbon capture, transportation and storage, and grid modernization. There is also a program to support new generation nuclear plants and a program to demonstrate the case for clean hydrogen. Finally, a new Office of Clean Energy Demonstrations will be created, with the aim of bringing new energy technologies to market faster and keeping the US at the forefront of innovation in this critical area.
• Accelerating electric vehicles (EV): EV is now recognized as a major component of the strategy to lower carbon emissions. The IIJA addresses a couple areas very specific to the industry, with a grant program for new alternative fuel stations, and funds for programs to support critical minerals that are essential to batteries and their recycling.
• Climate change resilience: The IIJA includes funding for mitigation of the drought in the west, coastal measures preventing sea level rise, and ecosystem restoration.
• Cleaner water: The IIJA marks a significant step forward in addressing critical water challenges, including reduction of water systems’ leaks, elimination of lead service pipes, clean-up money for land, wells reclamation, city stormwater runoff management, and emerging contaminants removal.

Social

Infrastructure has a significant impact on quality of life and social development. The IIJA provides for greatly increased investments in core infrastructure, public transportation, and digital infrastructure, all of which are expected to yield social benefits.

• Roads and bridges: The IIJA intends to fix the aging infrastructure that affects everyone’s daily life and creates hazard for communities across the country. It provides significant investment for the repair and reconstruction of roads and bridges as well as supporting major transformational projects. The legislation also includes a Safe Streets and Roads for All program to reduce traffic fatalities.
• Public transit: The IIJA provides funds to modernize public transit, replace deficient transit vehicles, and improve accessibility for the elderly and people with disabilities. This is expected to benefit the most vulnerable and disadvantaged communities, including those that lack sufficient public transit options.
• Ports, airports, and rail: As the country’s supply chains have struggled through the pandemic, we continue to experience firsthand the impact of years of neglected investment in ports, airports, and rail. The IIJA will upgrade these facilities and distribution systems that bring freight and people to the US and across the nation.
• Access to broadband networks nationwide: The act funds broadband infrastructure with the goal of achieving equal access to this critical resource throughout the US. This is particularly important as high-speed internet becomes increasingly necessary for employment, schooling/ education, healthcare, and staying connected.

Economic

The $1.2 trillion allocated for investment under the IIJA will deliver significant stimulus to the broad economy. However, there are other important economic benefits within some of the provisions.

• Efficiency: There is a significant amount of assistance embedded in the act to help the industrial sector improve energy, water, and material efficiency, reducing negative impacts on the environment while increasing profits.
• Smart data and permitting policies: The IIJA commissions scientific studies to identify more effective ways to prevent pollution and improve water, land, air, and climate stewardship. There are also revisions to permitting processes at the federal and state levels that should reduce the time and cost currently required for project permitting.
• Tax benefits: The Superfund Taxes collected on the sale of certain chemicals used to clean Superfund sites is restored by the IIJA and the end of the Employee Retention Tax Credit (ERTC) has been moved up from December 31, 2021, to September 30, 2021. The act also provides new extensions for tax filing and extended reporting requirements on the transfer of digital assets, including cryptocurrency.

We believe the IIJA really illustrates the interconnectivity between the important topics of finance, infrastructure, and sustainability. In some ways, the act is a roadmap for all stakeholders - users, developers, builders, operators, or investors in infrastructure - on how government is considering sustainable development, the implicated risks, and where they can create value.

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The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.