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1 [1] (April 22, 2021)

handle is hein.crs/govedbt0001 and id is 1 raw text is: Congressional Research Service Inforrming the legislative debate since 1914 April 22, 2021 Climate Change: Selected Federal Economic Development Tools and Policy Considerations Social, economic, and ecological risks associated with climate change, such as those documented in the U.S. Fourth National Climate Assessment and by the Intergovernmental Panel on Climate Change, have significant economic development implications. These include increased demand for federal economic development interventions, such as for infrastructure resiliency, and support for labor and economic dislocations resulting from energy transition. This In Focus considers potential federal economic development tools to help address climate change, as well as policy considerations. Climate and Economic Development Climate change countermeasures take two general approaches: (1) mitigation, to reduce greenhouse gas (GHG) emissions or enhance GHG removals from the atmosphere; and (2) adaptation, to increase resilience to climate change's effects. Some measures span both approaches. Economic development activities can also play a role in both. Mitigation options typically target (1) supply-side technologies or physical assets, such as transitioning from fossil fuel to renewable energy sources; or (2) redirecting demand-side consumer choice or social behavior, such as through improved consumer information, GHG pricing mechanisms, or tax incentives for GHG-reducing actions. However, even with globally aggressive actions to abate GHGs, the future global average temperature would likely increase above 1.50 Celsius (from a preindustrial baseline) by mid-century. Therefore, climate change adaptation has become an increasingly bipartisan objective (for example, H.R. 4058 in the 116th Congress). Increases in the frequency and severity of natural disasters has raised congressional awareness of, and interest in, disaster resilience and response. Adaptation could avoid human and societal losses and reduce fiscal risks of federal relief and recovery expenses. Adaptation may include new policies, such as disaster funding reforms, or technologies such as resilient building technologies and other infrastructure. Climate change also creates other changed circumstances, including shifting growing seasons, opening of Arctic navigation routes, and the impetus to develop new technologies. Direct Tools and Programs Several federal economic development programs have direct application to climate mitigation and adaptation. Renewable Energy Incentives Energy infrastructure is a common target for economic development investment. A number of federal agencies and entities provide incentives for research, development, and deployment of renewable energy (RE) systems that reduce emissions. The President's FY2022 budget requests technology demonstration funding to advance renewable technologies and to support new economic bases and jobs. In existing programs, The Department of Agriculture's (USDA) Rural Energy for America program, first established to support rural economic development, funds energy audits and RE technical assistance for small businesses. See CRS Report R40913, Renewable Energy and Energy Efficiency Incentives: A Summary of Federal Programs, by Lynn J. Cunningham and Rachel J. Eck. * The Department of Energy's (DOE) State Energy Program funds states to deploy RE and promote energy efficiency. * DOE's Renewable Energy Production Incentive provides payments to eligible facilities to encourage private investment and subsidize initial operations. Energy Transition Programs Historically, the federal government has subsidized (largely via tax policies) fossil fuel and nuclear power industries and electricity generation, though the emphasis of federal investment has shifted over the past decade. See CRS Report R44852, The Value of Energy Tax Incentives for Different Types of Energy Resources, by Molly F. Sherlock. Regions and businesses continue to make major transitions in their energy systems and fuel trade. Transition efforts and considerations include increasing access to reliable energy supplies, developing more efficient energy technologies, and reducing energy poverty; rapid changes in the relative costs of energy technologies and fuels, particularly for certain RE equipment, natural gas, and oil; and the expanding natural gas supply and associated pollution risks. Transitions also relate to various regulatory and financial incentives aimed at decreasing fossil fuel use. Although these transitions are driven primarily by market forces and public policy, they may also be influenced by efforts to curb high-emissions energy uses, such as coal combustion. Several federal programs address the economic impact of the coal industry's decline, including: the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative, an Appalachian Regional Commission (ARC) program available to applicants within its service area; ittps://Crsreports.congress.gt 0

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