House T&I Examines Private Sector Role in Addressing Climate

On March 17, the full House Transportation and Infrastructure Committee held a hearing titled “The Business Case for Climate Solutions.” Addressing climate change was a key priority in last year’s House Democratic infrastructure bill, the Moving Forward Act (H.R. 2), which may be used as a starting point for this year’s infrastructure bill. Throughout the hearing, Members and witnesses alike referred to provisions in H.R. 2 in anticipation of continued movement on the subject.

The eight-person panel of witnesses included:

  • Jack Allen, Chief Executive Officer, Proterra, Inc.
  • Shameek Konar, Chief Executive Officer, Pilot Flying J (on behalf of the National Association of Truck Stop Owners)
  • Troy Rudd, Chief Executive Officer, AECOM
  • Rafael Santana, President and Chief Executive Officer, Wabtec Corporation
  • Frederick W. Smith, Chairman and Chief Executive Officer, FedEx Corporation
  • Laurie Giammona, Senior Vice President for Customer Care, Pacific Gas and Electric Company
  • Tom Lewis, National Business Line Executive for Climate, Resilience, and Sustainability, WSP USA
  • Charles Hernick, Vice President of Policy and Advocacy, Citizens for Responsible Energy Solutions

Chairman Peter DeFazio (D-OR) opened the hearing by discussing the transportation sector’s outsized role contributing to greenhouse gas emissions in the United States compared to other sectors. Light-, medium- and heavy-duty road vehicles represent a combined 82 percent of transportation emissions and thus were the primary focus of the hearing, though emissions from rail and to a smaller extent, aircraft, were also discussed.

Following were among the recurring threads from the hearing:

Technology and innovation

Every witness in some way touched on electrification as a strategy for reducing emissions. But there are many moving parts with respect to implementing electric vehicle (EV) technologies, including what some referred to as the “chicken and egg problem”, namely that the presence of more EV drivers will create demand for vehicle charging infrastructure, but without sufficient charging infrastructure, drivers are reluctant to purchase EVs. Konar, on behalf of fueling station owners, underlined that fuel retailers are agnostic to the type of fuel they provide but until there is more consistent consumer demand for electric vehicles, one action the federal government can take is to invest in EV charging infrastructure in a way both accommodates new demand on the power grid (i.e. through assistance to the utility sector, especially renewables) and allows fuel retailers to provide reliable charging sources to customers. Rudd (AECOM) highlighted that one opportunity for the federal government to ensure interoperability in the charging network is to invest in dynamic charging embedded in roadways in addition to traditional charging stations. He also indicated that there is private capital willing to invest in electrification, presenting opportunities for public-private partnerships.

Beyond electrification, hydrogen power was also a topic of discussion, though when asked about the applicability of hydrogen fuel cells for transit, Allen (of electric bus and heavy truck maker Proterra) indicated that battery electric will continue to be a better solution, especially as the drive range of battery electric buses increases. He indicated that “Class A’ vehicles (combination tractor-trailers) may be a better application for hydrogen technology, a point that was echoed by Konar. In his testimony, Santana (from Wabtec, maker of locomotives and rolling stock components) discussed his company’s exploration of hydrogen combustion engines (in addition to battery-hybrid) that are retrofittable to existing diesel-powered locomotives.

Federal investment in research and development will continue to play a role in advancing new fuel technologies, but according to CRES’s Hernick, there should be an “all of the above” approach to R&D that emphasizes electrification, fuel efficiency, and new fuels.

FedEx’s Fred Smith cited a governance innovation that may lead to more efficient operations among FedEx’s fleet of 680 aircraft: air traffic control reform. Specifically, he discussed technology updates, increased staffing of the air traffic control system, and updated air traffic management policies and guidance as potential solutions.

Domestic and global economic factors

The topic of investing in the domestic workforce came up in multiple instances. Allen indicated that most battery cells for electric vehicles (in his case, buses) are not produced in the U.S., and that incentives to bring battery cell technology manufacturing jobs to the U.S. would shift the balance. He also discussed partnerships with the federal government to provide opportunities (with a particular focus on people of color, women, and the formerly incarcerated) to train employees on electric technologies. Rep. Pete Stauber (R-MN) also referenced the human rights concerns associated with battery component minerals sourced in certain countries, which could be mitigated by using domestically-sourced materials.

In response to a question from Rep. Garret Graves (R-LA) about how the social cost of carbon should be assessed in the context of a global economy in which different countries, for example China, emit at different rates, Fred Smith indicated that one of the most promising solutions is a border adjustment tax for which goods imported into the U.S. that do not meet a designated carbon footprint standard are subject to a tariff, and there is an adjustment on our exported goods that have met those standards. When pressed further on the subject by Graves, Smith indicated that the biggest impediment to the U.S. being export-competitive is that we are competing with countries that have a deductible value-added tax.

Delivering sustainable infrastructure

Finding opportunities to speed capital construction timelines for sustainable projects was another recurring theme. Hernick pointed to options like One Federal Decision (recently repealed by the Biden Administration, though they say they are examining similar options to replace it) and targeting a two-year timeframe for permitting decisions as potential solutions.

With respect to building resilient infrastructure that can withstand future climate events, WSP’s Lewis said that federal emergency relief funding procedures, as currently written in the Stafford Act, provide an incentive for rebuilding the same infrastructure that was damaged, despite its proven susceptibility to damage in the event of a major climate event. He indicated that new legislation could override this incentive and allow for improvements to withstand such events in rebuilt infrastructure.

Lewis further indicated that currently, different organizations use different standards to assess infrastructure lifecycle costs. A better approach, he stated, would be to have federal guidelines on acceptable tools or standards. These guidelines would allow for projects that are best for sustainability and resilience to get priority for federal funding. Rudd echoed this, saying that it’s important to change the procurement scoring system so that the allocation of funds does not simply prioritize low costs, but also emphasizes innovation, sustainability, and resilience in project design.

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