Growing agreement that government regulations are driving up the costs of vital infrastructure
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Growing agreement that government regulations are driving up the costs of vital infrastructure

We may have an unprecedented opportunity to reform the National Environmental Policy Act.

With all the recent focus on infrastructure, the past year has seen numerous articles in the media along the lines of this Vox article, “Why Does It Cost So Much to Build Things in America?” The better-researched articles, including that one by Vox’s Jerusalem Demsas, focused attention on environmental litigation.

Among the numerous examples cited in these types of pieces are: 

  • Boston’s notorious Big Dig project ballooned from an initial estimate of $3.2 billion to a final cost of $14.8 billion due in part to extensive litigation resulting in numerous costly mitigation measures.
  • Maryland’s Intercounty Connector toll road was initially estimated to cost $216 million in 1984 ended up costing $2.56 billion when completed in 2012, after decades of environmental litigation.
  • The much-delayed and over-budget Purple Line in Maryland recently reported “a new $3.4 billion construction price — an almost 80 percent increase,” according to The Washington Post.

A detailed research paper by Leah Brooks of George Washington University and Yale’s Zachary Liscow found that the cost to build a mile of Interstate highway had tripled between the 1970s and today. While materials and labor obviously cost more now, Brooks and Liscow identified the key turning point in cost escalation was the empowerment of ‘citizen voice’ by the National Environmental Policy Act (NEPA), other federal statutes, and their counterparts such as CEQA in California.

Supporting evidence comes from the White House Council on Environmental Quality, which found that, as of 2018, environmental reviews for 60% of federal highway projects took more than six years, while only 7% were completed in under two years.

Until recently, it was considered unacceptable to suggest serious reform of NEPA and similar regulatory laws, seen as equivalent to giving up on clean air, clean water, and dealing seriously with climate change. Yet some researchers have suggested that timely construction and environmental protection need not be at odds. For example, Alon Levy and colleagues of the Transit Costs Project at New York University’s Marron Center recently documented huge differences, by country, in the cost per kilometer of new subways.

The United States and the United Kingdom were near the top at between $500 million and $600 million per kilometer. Italy and Spain were near the bottom with a per kilometer cost of $100 to $200 million. Levy pointed out that Italy handles environmental clearance via the ‘administrative state’ rather than unlimited citizen litigation. By contrast, Germany ($300 million per kilometer) and the United Kingdom ($600 million per kilometer) feature extensive ‘citizen voice’ regarding infrastructure.

The good news is that many moderate and Democratic pundits are now noting that NEPA and similar regulations pose a severe threat to the Biden administration’s climate-change agenda. In a lengthy opinion piece, The New York Times‘ Ezra Klein cited environmental and NIMBY (not-in-my-backyard) groups’ opposition to projects such as long-distance high-voltage lines, natural gas (and future hydrogen) pipelines, offshore wind projects, solar field projects in California deserts, and mining for key minerals needed for electric cars and other electrical infrastructure. 

While lauding the environmental benefits of NEPA and related laws, Klein argued: “[The laws] are, too often, powerful allies of an intolerable status quo, rendering government plodding and ineffectual and making it almost impossible to build green infrastructure at the speed we need.”

Klein also quoted Alex Trembath of the Breakthrough Institute saying, “A bunch of the regulatory law doesn’t penalize or regulate pollution. It penalizes and regulates technology, infrastructure, and growth.”

These concerns are increasingly showing up in deep-blue California. In 2020, its legislature enacted Senate Bill 288, which exempts bike, pedestrian, and transit projects (but not highways) from the California Environmental Quality Act, or CEQA. A 2022 bill by State Sen. Scott Wiener would extend the exemption to the conversion of general-purpose highway lanes to carpool lanes. The recent controversy over the University of California-Berkeley expanding enrollment without expanding on-campus housing prompted Sen. Wiener to also propose exempting many student housing projects from CEQA. On the Berkeley issue and CEQA, The Times’ Klein noted:

Zoom out from the specifics, though, and look at what it reveals about how government, even in the bluest of blue communities, actually works. Why was it so easy for a few local homeowners to block U.C. Berkeley’s plans, over the opposition of not just the powerful U.C. system but also the mayor of Berkeley and the governor of California? The answer, in this case, was the California Environmental Quality Act — a bill proposed by environmentalists and signed into law in 1970 by Gov. Ronald Reagan that demands rigorous environmental impact reviews for public projects and that has become an all-purpose weapon for anyone who wants to stymie a new public project or one that requires public approval.

If CEQA exemptions can be enacted in California, could NEPA reform at the federal level become possible?

Hypothetically, if there were a Democratic sweep in the House or Senate this November, we might see some NEPA exemptions for favored green infrastructure—though most environmental groups would likely fight doggedly to prevent even that, given their members’ frequent opposition to mines, transmission lines, etc.

But history suggests that the president’s party almost always loses seats in mid-term elections, so what if the predicted Republican sweep yields a majority in one or both houses of Congress? That could, or should, open the door for a bipartisan approach to reforming NEPA, the Clean Air Act, and several other laws that empower citizen litigation.

Of course, there would still be environmental reviews carried out by the relevant government agencies, and individuals and organizations could still submit their comments on the lead agency’s draft environmental report. But none of those groups would be allowed to sue the agency, holding up a project for years, once it was cleared by the agency’s environmental review.

The same Republicans who have gone all-out to have the Federal Highway Administration rescind its anti-new highway capacity guidance document would likely favor junking endless litigation opportunities against highway projects. Meanwhile, the Biden administration and many of its supporters in both chambers should favor the same for the infrastructure essential for further electrification of the American economy.

As of early last year, what eventually emerged as the $1.2 trillion Infrastructure Investment and Jobs Act, or bipartisan infrastructure law, seemed unimaginable to most people, especially those who read the details of the U.S. House of Representatives’ anti-highway reauthorization proposal. Yet even with our divided Congress, the bipartisan infrastructure bill got 69 votes in the U.S. Senate and ended up being adopted unchanged by the House and then signed by President Joe Biden.

We’re a long way from November’s congressional elections, but 2023 could present a unique opportunity for meaningful bipartisan NEPA reform. With Democrats and Republicans recognizing the failures of the National Environmental Policy Act, the entire infrastructure community should take this opportunity to work together to make meaningful reforms.

A version of this piece first appeared in Public Works Financing.