Decarbonizing America’s infrastructure could be Biden’s climate moonshot

Call it the President Joe Biden industrial decarbonization “moonshot” moment.

Biden’s planned spending of up to $3 trillion to overhaul the country’s crumbling infrastructure gives him a historic opportunity to marry his ambitious climate change agenda to a government-funded supercharging of the transition of America’s heavy industry sector — steel, concrete and chemicals — to carbon-neutral status.

Successful industrial decarbonization hinges on joint government-industry investment to develop the new technologies and renewable energy systems, including hydrogen, that will define the carbon-neutral economy of the future. The U.S. is already playing catch-up in this regard. The United Kingdom recently earmarked an initial $1.4 billion USD to fund government-corporate decarbonization partnerships.

Such targeted infrastructure spending would do more than just fulfill Biden’s pledge to put “sectoral decarbonization” at the center of his administration’s “green recovery efforts.” It also dovetails with his stated objective of positioning the U.S. as a global leader in “high-growth industries of the future.” Harnessing federal spending to heavy industry decarbonization would also ensure that the literal building blocks of Biden’s infrastructure program don’t produce a planet-baking carbon surge. The United Nations’ Intergovernmental Panel on Climate Change (IPCC) has warned that carbon reductions are essential to limit global warming to 1.5 degrees Celsius by 2050, and that failure to meet that target will greatly increase “climate-related risks to health, livelihoods, food security, water supply, human security, and economic growth.”

Infrastructure spending to accelerate the country’s steel sector to carbon-neutral status offers Biden the most obvious initial bang for infrastructure investment buck. The U.S. is the world’s fourth-largest steel producer. Transitioning U.S. steel to carbon-neutral production processes would help reduce the estimated 8 percent of total global carbon emissions pumped out annually by the world’s steel sector. And U.S. steel sector decarbonization will also help ensure that the projected steel output surge to service rapidly expanding green technologies including wind turbines and electric vehicles doesn’t negate their positive environmental impacts.

Biden needs to move fast. Some of the U.S. steel sector’s biggest foreign rivals are already proactively rolling out initiatives to transform their production systems to carbon neutral over the next three decades to cater to the lucrative new “green steel” market of the future. Four of the world’s top five corporate steel producers have all recently announced plans to reduce their carbon emissions over the next three decades. They include Luxembourg-based ArcelorMittal, Japan’s Nippon Steel, South Korea’s POSCO and China’s state-owned Baowu Steel. 

While such corporate commitments to carbon neutrality are essential, they are inadequate without state support. Heavy industry sector decarbonization will require meaningful government involvement through funding backed by supportive policy and regulatory initiatives. POSCO last month underscored the financial challenge of that transition when it revealed that replacement of its nine existing high carbon emission blast furnaces with carbon-neutral facilities will cost the “equivalent to its 30-year operating profit.” 

Biden can look for inspiration to a new international multistakeholder policy tool dedicated to accelerating and scaling-up the decarbonization of heavy industry to align with a 1.5-degree Celsius global warming trajectory. The Global Framework Principles for Decarbonizing Heavy Industry outline the role of government and private industry to ensure the successful decarbonization of heavy industries including steel, cement and chemicals through allocation of public financing for emissions reduction plans. The Framework Principles specify investment in low- and zero-carbon technologies as a top government and corporate priority to help phase out fossil fuel use in industrial processes.

That decisive role of government echoes the Biden administration’s own “climate finance plan” that hinges on “promoting the flow of capital toward climate-aligned investments.” The Framework Principles are grounded in a recognition that decarbonization efforts include protections for biodiversity, human rights and human health to ensure a just and equitable transition to a decarbonized industrial future.

Biden declared in January that the U.S. needed to “seize the opportunity” afforded by what he described as the world’s “profound climate crisis.” Biden should bridge the gap between that rhetoric and reality by allocating infrastructure spending to make industrial decarbonization a top priority of his climate change agenda.

Phelim Kine is the senior director at the Washington, D.C.-based environmental campaign organization Mighty Earth focusing on Asia. He leads its heavy industry decarbonization brief.