American Jobs Plan Would Catalyze Clean Energy Innovation

The Biden-Harris administration’s infrastructure plan released today would accelerate climate innovation and bring the benefits of research & development, technology commercialization, and manufacturing to more communities across the country. The American Jobs Plan marks a shift to a federal innovation program focused on improving technologies to address the climate crisis and prioritizing diversity and equity. The plan would lay a foundation for an economy that works for everyone and can combat our pressing social, economic, and climate crises.

U.S. Department of Energy

The scope of what President Biden is proposing is historic. The plan includes more than $180 billion for research, development, and technology demonstrations. That’s about 15 times today’s annual budget for science and energy R&D at the Department of Energy (DOE), which has played a pivotal role in the key energy technology success stories to date and represents the bulk of energy-related innovation investments across the federal government. It will be critical to ensure these funds are spent over the next few years to accelerate innovation at the scale we need and provide a foundation for further investments, but the goals laid out are an impressive start.   

The American Jobs Plan also includes important features to orient federal innovation programs toward increasing diversity and supporting underrepresented groups in the R&D process. Currently, the research and innovation economy is rife with persistent and severe racial, economic, and gender inequities at every stage of the process. Addressing these inequities is critical to building a more effective climate innovation ecosystem and ushering in a just and equitable economy. The plan proposals would bring federal support to a more diverse range of researchers across the country and, in doing so, broaden the types of problems and solutions explored through federal innovation programs.

A Much-Needed Influx of Funds

Past and current funding levels for federal innovation programs are far too low compared to the scale of the crises we face. The American Jobs Plan would provide a large investment to expand the scope of federal innovation efforts and upgrade federal R&D infrastructure. Importantly, the investments build on existing programs to complement the amazing work already underway at the Department of Energy and other agencies.

The highlights of the plan include:

  • $35 billion for climate-focused innovation, which could help round out the the federal government’s energy-focused programs with expanded efforts on underfunded sectors like heavy industry and agriculture;
  • $40 billion to upgrade federal innovation infrastructure and build out facilities that can help accelerate technology development;
  • $50 billion for a new National Science Foundation technology program paired with $30 billion at other agencies including DOE, which would help build on existing efforts at DOE to expand science and technology R&D efforts;
  • $25 billion for R&D investments and research incubators at Historically Black Colleges and Universities (HBCUs) and other Minority-Serving Institutions (MSIs);
  • More than $15 billion for demonstration projects, including for clean hydrogen, energy storage, and industrial decarbonization; and
  • Deployment and infrastructure investments and procurement policy to drive demand for innovative technologies.

The forthcoming details here will be important to ensure funding for technologies and sectors that can improve solutions to address the climate crisis, reduce pollution for overburdened communities, and advance environmental and energy justice. The timeline for using these funds also matters immensely—the federal government can and should get this money to researchers, businesses, and communities over the next few years and set up the infrastructure for further funding down the road.

Incorporating Diversity and Equity into Innovation Programs

The plan directs half the new funds for critical technology R&D to HBCUs and other MSIs, proposes a new climate-focused national lab at an HBCU, and calls for $15 billion for research incubators at HBCUs and other MSIs. It also includes dedicated R&D funding for land-grant universities to support innovators in rural communities and dedicated funding for regional innovation hubs to distribute the benefits more widely and target regional challenges.

And the plan’s proposed $31 billion for innovation funding for small businesses includes support for programs to benefit communities of color and underserved communities.

While innovation policy can certainly be a driver for economic renewal, we must ensure targeted investments in disadvantaged, deindustrialized, and marginalized communities to build a just and equitable economy. The American Jobs Plan layers equity into innovation policy throughout.

For example, the plan includes funding to build decarbonized hydrogen demonstration projects in distressed communities, target investments in energy transition places, and retrofit steel, cement, and chemical facilities to reduce pollution and make these facilities competitive in a climate-safe economy. Throughout the plan, the focus on deploying clean energy and upgrading energy infrastructure in disadvantaged communities would help bring the benefits of innovation to more places.

While these goals are promising, the details will be critical. Integrating equity and justice into federal innovation policy will require extensive, frequent engagement with communities in design and implementation of programs. It will matter a lot how applicants for funds are judged, what kinds of technologies are supported, whether investments create local jobs and foster economic prosperity for low-wealth and low-income communities, and how projects affect local pollution. Updated and expanded innovation programs must include standards to protect or expand high-quality jobs and make jobs accessible to all, especially to Black, Indigenous, and people of color (BIPOC) communities, communities transitioning away from environmentally harmful industries, and people often underserved in rural communities.

Building a Strong Innovation Program Does Not End Here

The American Jobs Plan would be a massive leap forward on climate innovation policy, which can underpin the climate action and equitable economic renewal we urgently need. But the work does not end here. Congress should use the annual budget process to move the plan forward, build on it, and complement the expansion in innovation programs by bolstering funding for existing DOE programs. Moreover, DOE and Congress must work together to get the details right and ensure that the design and implementation of the programs engages communities at every stage and prioritizes reductions in climate and health-damaging pollution, creation of good-quality jobs, and equity and environmental justice.

About the Authors

Arjun Krishnaswami

Climate Policy Lead, Innovation, Climate & Clean Energy Program

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