An executive order issued last week builds from procurement-related provisions in the Build Back Better Act and expands the federal government’s responsibility to consider the emissions created by its purchases.
Last week, the Biden administration issued an executive order (EO) that lays out a series of steps to move the federal government—and, by implication, the rest of the country—toward a low-carbon future. While the administration’s goals for electric vehicle purchases have been widely touted, the federal “Buy Clean” program is at least as far reaching. This program would direct federal agencies to “expand consideration” of the carbon footprint of the materials used in their construction projects. This previously announced goal is to be addressed initially by a newly formed Buy Clean Task Force that would make recommendations to support such expanded considerations. This blog post examines this section of the EO and considers its viability. Given the uncertain future of the Build Back Better Act, it’s worth going over the key elements of this relatively unconstrained EO.
The first element explores how the government plans to account for a given material’s carbon footprint. Here, as in the Build Back Better Act, the accounting is to be comprehensive , including all stages of production, upstream processing, and extraction of fuels and feedstocks—termed a life-cycle approach.
For example, suppose a construction company wants to bid to build a road. Not only would the company need to report the carbon emissions associated with the concrete it is pouring and the cement in that concrete, but also the leaks of methane associated with the natural gas that the cement company uses in the process. Presumably, the carbon footprint of the steel involved would include the carbon dioxide associated with the electricity used by its electric arc furnace and, again, the methane leaks to cover the upstream natural gas, if any.
To be sure, this is the ideal method of accounting. But such a detailed process creates significant challenges related to the development of software and other protocols that can undergird a green materials procurement system.
Federal construction projects and federally funded projects are all expected to be covered. Surely these projects will include federally funded roads and bridges, and perhaps military equipment of all kinds (likely subject to opt-outs). But do the covered projects extend to the steel in electric vehicles and other federal vehicles? What about newly constructed buildings? Presumably, the task force will need to define the strictures.
More intriguing, however, is the phrase “federally funded projects.” This delineation would represent a profound extension of embodied green materials procurement if it applies to the federal Highway Trust Fund, which pays for about one-fourth of all road building and maintenance in the United States, mostly through grants to state and local governments. In 2019, Highway Trust Fund spending amounted to $47 billion. This amount is enough to fulfill at least one of the goals of the EO: to stimulate markets in green construction materials and spur innovation.
The EO itself mentions cement and steel, which certainly are on everyone’s list of sectors that need help in greening their products. But whether other materials are covered remains unclear.
The EO is puzzling on this score, as it does not say outright that the focus is on carbon dioxide and other greenhouse gas emissions. Are reductions in conventional air pollutants and water pollutants also supposed to be tracked and scored?
With the scope and ambition so large in the EO, the question of cost comes up. Unquestionably, roads built with “clean” cement and steel will be more costly than roads built with traditional materials, so the bids using green materials will be higher. If budgets don’t rise to accommodate higher project costs, then fewer projects will be funded—not to mention that the agencies will need larger staffs and larger budgets to navigate the embodied material procurement world.
Making It Work
For green procurement to work, federal agencies need to do the following:
- define what is “green” or use the quantity of life-cycle carbon dioxide emissions as a metric to describe a project
- devise life-cycle software and other protocols (i.e., environmental product declarations) that allow bidders to provide footprint estimates alongside the rest of their bid
- develop auditing procedures to keep the bidding process honest and transparent
- figure out how to weight the footprint relative to other attributes of the bid (e.g., by using the social cost of carbon, the footprint could be monetized and added to a project’s ultimate cost)
The EO says nothing on (1) and (4) but acknowledges that environmental product declarations will be needed, along with auditing and reporting protocols. In fact, the EO tasks the General Services Administration with tracking the carbon emissions disclosures made by major federal suppliers under applicable law. Indeed, the EO goes further by asking the task force for recommendations on how potential bidders can get financial and technical assistance for their reporting requirements; the EO also directs the task force to recommend pilot programs for getting the entire enterprise started. But in this case, it’s not clear exactly what a “program” entails: An agency? A few solicitations?
In asking the task force to recommend financial and technical assistance for materials suppliers to reduce emissions, the EO is including a request that could dwarf the rest of the green procurement effort. Of course, the US Department of Energy already administers grant, loan, and other programs to help speed green innovation. It’s unclear whether the EO wants the task force to go beyond these programs, comment on the existing ones, or both.
How Does the Executive Order Relate to the Build Back Better Act?
Although Democrats in Congress worked with the Biden administration to harmonize the ideas around green procurement, the two branches of government could go in different directions. The big differences are as follows.
First, recent drafts of the Build Back Better Act include appropriations that can make green procurement happen—essentially backing up some of the promises made in the EO. The Federal Highway Administration is expected to receive $900 million for state projects that receive federal money, to reimburse additional costs that result from reducing the carbon footprint of those projects. This amount of funding is only a drop in the bucket of annual spending from the federal government to the states, but it’s quite significant for opening up state government projects to green procurement.
Second, under the Build Back Better Act, the General Services Administration is expected to receive $3.25 billion both for purchasing low-carbon materials and for improving the energy efficiency of its purchases. The US Environmental Protection Agency could receive $250 million to help with its development of environmental product declarations for construction materials—which undergirds green material procurement—along with another $100 million to figure out what constitutes a “green” material used in a transportation construction project.
Thus, with the money provided in the Build Back Better Act—alongside the structure, goals, and mandate provided in the EO—much progress toward reducing embodied carbon in construction materials can be anticipated.