Is there one part of our infrastructure whose poor condition worries you the most?
One is rail. Passenger rail in the United States is slower in most cases than car transportation. The only way to entice alternative transportation modes is to provide good service. In the case of rail, it requires improvements of trains and railroads. This is especially important in the absence of carbon taxes that disincentivize car usage.
Overall, infrastructure that protects against climate change still needs to grow. Even if the existing infrastructure is in good condition, climate change is a dynamic phenomenon, and its effects are expected to increase. Fortunately, the bill does include significant investment in adaptation infrastructure. In some cases, adaptation is optimal; in others, as the sunk-cost fallacy (focusing on our past investments to make future decisions) teaches us, the optimal use of infrastructure would be to build it elsewhere in the face of threat of climate change.
Finally, power transmission is an important sector that not only needs more investment but also an important regulatory reimagining. Efficient and cheap transmission is the only way to really capitalize on investments in power generation. The generation of renewable power is not always located near the main consumption hubs. If we want to take advantage of, for instance, the wind and solar energy potential of Midwestern states, we need to be able to move this energy to the population hubs on the coasts.
In many instances, transmission is a key factor in making solar and wind the most cost-effective forms of electricity generation. Since 2011, the U.S. government proposed the construction of seven major new power transmission lines. Only two have been finished. In the meantime China has built more than 18,000 miles of ultrahigh-voltage transmission lines. Solving this problem could create feasible decarbonization markets in the U.S.
Part of the transmission problem is not money (although it is not good that the original infrastructure plan in the Senate included $100 billion for transmission, and the bipartisan version has decreased it to $27 billion), but regulation and politics. There are restrictions that maintain market control in the transmission industry, keeping energy costs higher in some places and potentially benefitting incumbent utility companies. Current regulation requires transmission lines to get local approval for every state line crossed. In contrast, a gas pipeline requires only the Federal Energy Regulatory Commission’s approval. If we make transmission of renewable energy so complicated and costly, we can't expect it to be a major force in the energy industry.
Could you put infrastructure in an economic context? That is, what role does infrastructure play in the overall economic health of a society?
Infrastructure is the blood that allows the body to work, the oil in the engine. It is not something that we seek for its own sake, but it’s the framework that allows other economic activities to happen. It is so important that it can make a vital difference in moving a country from a developing to a developed nation.
City living has historically been associated with growth in productivity and quality of life, in part because of how it allows people to efficiently share infrastructure. I have done research on this topic and found that part of the productivity gap between cities in developing and developed nations is precisely explained by infrastructure. Also, infrastructure is a lot more than roads and bridges. A broad approach to infrastructure includes human infrastructure (home and community care, and education).
Another important aspect of infrastructure is that it can create jobs. The White House has calculated an average of 2 million jobs per year directly related to the infrastructure bill over the next decade; and many more can be created from economic growth derived from the bill. On the less positive side, interstate road network creation and further expansions, to name one example, have increased the ease of car usage, which has created suburbanization and even physically divided cities, often isolating minority communities.
In sum, infrastructure is fundamentally important, but care needs to be taken to prevent the negative externalities that can result and can become even more expensive to fix after they are created.