Heidi Crebo-Rediker, adjunct senior fellow at CFR, leads a conversation with Stephen E. Flynn, founding director of the Global Resilience Institute at Northeastern University, on the bipartisan Infrastructure Investment and Jobs Act (IIJA) and how officials can utilize IIJA funding in ways that address resilience, sustainability, climate adaptation, and equity. A question-and-answer session will follow their conversation.
FASKIANOS: Thank you, and welcome to the Council on Foreign Relations State and Local Officials Webinar. I’m Irina Faskianos, vice president of the National Program and Outreach here at CFR.
We’re delighted to have participants from forty U.S. states and territories with us today. Thank you for taking the time to join us for this discussion on resilient and sustainable infrastructure. As a reminder, this discussion is on the record.
CFR is an independent and nonpartisan membership and educational organization, think tank, and publisher focusing on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine, and, as always, CFR takes no institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of topics.
We are pleased to have Heidi Crebo-Rediker and Stephen Flynn with us today. I will just give a few highlights from their bios.
Heidi Crebo-Rediker is an adjunct senior fellow at CFR and a partner at International Capital Strategies. Prior to her time at CFR, she served as the U.S. Department of State’s first chief economist. She was also the chief of international finance and economics for the Senate Committee on Foreign Relations.
Stephen Flynn is the founding director of the Global Resilience Institute at Northeastern University, where he leads courses in civil and environmental engineering, public policy, and urban affairs. He is a principal for Stephen A. Flynn Associates, which provides independent advisory services on improving critical infrastructure security and resilience, and Dr. Flynn also spent ten years as a senior fellow for national security studies at CFR. So it’s great to have him back.
So I’m going to turn it now over to Heidi to have a conversation with Steve, and then we’ll go to all of you for your questions and comments. Again, we want this to be a forum to share best practices so we encourage you to, you know, give us your insights into what you’re doing in your own communities.
So, Heidi, over to you.
CREBO-REDIKER: Thank you. Well, thank you, Irina, for convening such a great group of state and local government officials, and, Stephen, it’s great to have you back at CFR again for this. So thank you for joining us today.
This is—just in terms of the format, this is really—you know, this is Stephen’s expertise and so I will play, you know, pure facilitator and moderator. We’re going to try and do about fifteen minutes of opening remarks and I think Stephen has some slides as well.
But, you know, this is—following on our call that we had on water infrastructure, we have, again, 1.2 trillion (dollars) in funds that are coming—both formula and grant money and loan money coming out of the bipartisan Infrastructure Investment and Jobs Act, and some of it is standard issue in terms of how state and local governments access those funds and some of these programs are entirely new with entirely new objectives and parameters and way to think about how applying for them.
So on the question of resilience, this is, I think, around 50 billion (dollars). I’m probably going to—that’s, at least, what the White House announced for resilience in a very broad-based definition that takes weather, drought, heat, floods, cyber, all sorts of types of broad-based hazards, into account for a wide variety of infrastructure.
And part of what, I think, Irina and I are trying to do is get state and local governments teed up so that they are ready to and getting ready now to apply for this funding, as we had a lot of conversation in our last meeting was about how this funding is to also serve under resourced and parts of the country that have not had adequate access to these funds and these resources and this infrastructure in the past.
So under served and equity are two big words in thinking about how this money is—wants to be implemented.
With that, I’m going to hand it over to Stephen to talk about resilience and then we’ll open it up for Q&A.
FLYNN: Well, thanks so much, Heidi. And I would like to step in and just a little bit talk about infrastructure, and then the resilience piece of the infrastructure, and also speak to the sustainability and equity issue. And I do this, in part, because I want to suggest that in going after these growing number of federal resources but also private resources that are increasingly out there as a result of ESG funds, thinking about how you embed into those projects sustainability, resilience, and equity, I think, is going to be key.
So, with that as the context, opening up here, you know, my interest in infrastructure dates from my time as a Coast Guard officer and watching our, essentially, ports and sea become less than they should be if they’re going to compete on a global scale. We’re seeing in real time the disruption of supply chain, largely as a result of inadequate port infrastructure.
But I came, as my gray hair suggests, at the end of the Baby Boom era, and growing up, infrastructure was a source of national pride. But when I look through the lens of my daughter, who came up at sort of the end of the Millennials and the Generation Z folks, think about their childhood. And maybe some of you in this same age—same cohort. So when Christina (sp) was six years old, she watched the World Trade Center towers come down as a result of an act of terrorism in 2001. When she was eight years old, she watched the grid go down in the Midwest and the East as a tree, essentially, went into this power line in Ohio and caused cascading failures across our entire grid system. In 2005, when she was ten years old, she watched a major city drown as a result of a water—a flood water management system fail when Katrina was—Hurricane Katrina was just a little over a Cat One at that point here. In 2007, when she was twelve years old, commuters on the way to Minneapolis home from a rush hour here, the I-35W bridge go out from underneath her.
I could keep going on, but you get the point. When I was growing up, we, basically, had infrastructure that was a source of national pride. Our current generations have, literally, watched for the last three decades almost it deteriorate. We’re a bit like a generation who has inherited our grandparents’ mansion and we decided we can’t afford to do the upkeep.
People are driving by and saying, hey, it looks like a nice house. But those of us who are living in it know that the roof leaks. The plumbing doesn’t work very well. There’s electrical wiring shot. And we’ve been claiming, as the wealthiest country in the world, that we can’t afford to even maintain it, never mind upgrade it and provide it for our next—for our children and our grandchildren.
You know, it was the ingenuity, the treasure, some cases the industry, certainly, in some cases, even the blood of our forbearers who actually built the national infrastructure that we, obviously, have taken for granted.
So to actually have a major infrastructure legislation come through this past year, for me, was a high point and, clearly, though, this is a once not just in a generation but once in a potential lifetime opportunity to make the kind of investment we will absolutely need to make if we are going to have, essentially, the critical foundations of our communities, our states, and, ultimately, our nation, essentially, prosper in the face of the kinds of risks that we are seeing play out in the headlines all the time.
So this is important stuff, and I’m thrilled that we’ve got an audience here of so many folks in so many states to come and talk about infrastructure—(laughs)—and resilient infrastructure. So with that, let me jump to the slides that’ll frame this a little bit here for us.
So if we could jump—put those up. Hopefully, we have our master slide players here.
OPERATOR: One moment, please.
FLYNN: OK. What I suspect is the reason that has drawn a lot of the interest, though, and all of you being here—while these, hopefully, get put together here—is what Heidi said at the outset, that, you know, with a $1.2 trillion dollar Infrastructure Investment and Jobs Act, we right now have many of the federal bureaucracy working on trying to—on working on developing the requirements.
Many of these will be competitive grants, and so the kinds of ways in which you’re going to be most successful as a state or locality in accessing these funds is getting out in front of what these—likely the strings that are going to be attached and those include a focus on sustainability, resilience, and equity.
If we can move to the first slide, please.
So the big buckets you’re probably aware of, you know, large—a big chunk to roads and bridges, big chunk to electric grid, 66 billion (dollars) to rail, 65 billion (dollars) to broadband, 55 billion (dollars) to water, there’s also about 50 billion (dollars) set aside for resilience.
But all these projects, for the competitive portion of them, are going to want the proposals to integrate how they’re going to address issues of zero carbon, how they’re going to address issues of climate change and climate adaptation, how are they going to address resilience to disruptive events, how they are going to address equity.
If you’re going to have a most competitive proposal, you’re going to need to, basically, speak to those things. And as Heidi also mentioned, there are 380 programs, right? Congress spread the money around like peanut butter across all the different agencies to do stuff, plus-up programs, but they also created a 132 new programs. So we’re all finding our way.
We should keep our eye on the—(inaudible). While 1.2 trillion (dollars) sounds like a lot—and it is a significant investment—the total need that the—you know, that the American Society of Civil Engineers have identified is that we’re about 2.4 trillion (dollars) shortfall of maintaining what we have, never mind building what we want. So all this money is still not enough.
But there is out there a real big number—$53 trillion—in environmental, social, and governance investment. This has been an explosive growth of private sector funding looking for fundable projects that can move the needle on the environment and sustainability and resilience and climate adaptation that address social inequity issues and address governance issues.
There is actually more resources out there than there are fundable projects, and I want to lay down here the thought that leveraging the public sector funds, the 1.2 trillion (dollars), or any piece of that that you can get, matching it with ESG funds is, ideally, how you will actually get to true economic development transformation.
If you just chase the federal resources, like everybody’s going to be doing, it is still not going to be enough. Thinking about how you leverage it in order to actually get the real resources that are out there—the ESG funds that are available—that’s where, I think, hopefully, your heads will be at here.
Next slide, please.
What’s animating the resilience imperative is not the prevalence of risk. We’ve always had risk. We’ve always had disasters. What’s unique about the time we’re living in is we’re hyper connected and we’re adding more connections all the time, especially in the world of cyber.
What does that translate to? Every connection we make creates a dependency. When we have multiple connections, we get interdependencies. That means that what used to be a local shock now cascades in far more disruptive and destructive ways than used to in the past. We do those connections because we get benefits. We get efficiencies.
But we also bring—introduce a greater degree of risk that things will be disrupted, not even directly to us but because we depend on other things, and we’ve seen that most play out, of course, in the pandemic, but we see it play out in the supply chain and—issue. This is a challenge we really have to get out in front of if we’re going to, essentially, prosper in the—in the rest of the 21st century.
We struggle with this, in part, because—this air shot is a piece of real estate that I spent a lot of time thinking about and worrying about. What you’re seeing here is, on the left of the screen, Liberty International Airport at Newark. Then there are the runways. Then you’re seeing the Jersey Turnpike. Then you’re seeing the railhead—most people don’t pay attention to that—that actually brings the freight up into the Northeast, and next to it is the largest container terminal on the East Coast at Port Elizabeth in Newark.
Brilliantly designed by engineers for great efficiency. In a little over a mile you can move a box from a ship to a train, to a truck, to a plane, and any other variation thereof. We made this efficient, but it also creates vulnerability because if I disrupt this one point, you can see how we could have cascading effects.
So one of the key pieces that we had to think about here is in any infrastructure we design and upgrade is are we making ourselves vulnerable and would the vulnerability lead to dramatic consequences, and how we think about moving away from our myopic focus on efficiency to one that, basically, recognizes disruption may be the new norm.
The next slide.
Here’s another legacy problem. We have been, for the last couple of centuries, working on expanding our risk by, essentially, altering nature in ways in which we give ourselves more exposure. What you’re seeing here is my fair city of Boston, and what is in orange is what the Pilgrims saw when they showed up, right, and Boston then was a pretty—almost an island with a little throat that run through Roxbury.
Over time, to make the city bigger, we’ve kept filling in, and over generations we’ve filled in a lot of what is now the footprint of the city of Boston. But we did it just a little above high tide because that’s—you know, you don’t want no big hills. You’re just trying to make more space, and this space was a little bit above high tide. Why is that a problem?
One is we put, virtually, all the industrial landscape we rely on on those low-lying areas. Well, you don’t want to put it on Beacon Hill where people are living. You put it where you created new space, and what you’re seeing here is a map of where the generation stations, the electric substations—the main energy facilities are, and what it would look like if there was seven feet of water.
Now, we could get seven feet of water in a couple of days if a storm decided to come up and create storm surge. But we also have some projections that say we could be facing seven feet of storm surge rise in the next—by the end of the century. That’s a higher number but we’ve been conservative so far.
Here’s the challenge in thinking about not just resilience but climate adaptation. We actually have stuff that may not be around in twenty or thirty years in a safe place, and if we’re making investments in infrastructure that should last for decades we should be figuring this out now.
And this is going to be a key requirement with the projects that you, ultimately, are looking at is is it able to withstand rising sea level risks. In the storm surge that rising sea level exacerbates, and we have a challenge here because we live in many coastal places or on inland waterways that are subjected to flood, and we know, of course, the same is true out west in areas that have vulnerable to wildfire.
Our core issue is that we have organized ourselves often around assets and sectors when things have become very interdependent, and this quick slide just helps—slide helps to show that everything is connected. If I lose electric power, it disrupts the transportation system, it disrupts water systems. If I lost water, I can’t cool energy.
We are siloed often with projects and thinking about how I solve housing, how to solve transport or how do we solve energy, when, in fact, the way our real lives work is they’re interconnected, and successful efforts of building resilience will be one who acknowledge those interdependencies and look at ways for all boats to rise, basically, to address these concurrently.
Where we see this becoming a here and now issue was probably most dramatically played out in Puerto Rico with Hurricane Maria in September 2017. Hurricanes hitting Puerto Rico is not new. But what made this categorically a catastrophic disaster was that all of the lifeline systems failed simultaneously.
When you lost energy, you lost the ability for communications and technology. You didn’t have power for water and irrigation. You’ve lost your ability to—you didn’t have fuel because you couldn’t transport it. The port was disrupted. On it goes.
The reality is our risk is from this interdependency and we have to think about projects and infrastructure that address all these lifeline systems at the same time, not the we’re just going to do transport this year and next year we’ll worry about power, and so forth. We have to think about these together.
I—(inaudible)—the case here, though, that this is actually not just woe is us. This actually is something—this slide makes two points. One, increasingly, resilience is going to be a comparative advantage. Those who have a choice are going to gravitate to the places that are most able to handle disruption.
There’s not going to be any most risk-free places, and so the places that actually are more resilient are places where companies are going to locate and where people who have the means are going to want to locate, and those that are not are not.
But here’s the problem. If we, basically, do it—I think this happened here and the story of Mexico Beach and Florida and Hurricane Michael in 2018, where only one building is resilient. And the brilliance about this new building that was built there here was that they went a little bit above code and the only damage they had with a Category Five making landfall was to their bathroom window while all around them you see a slab where houses were blown away.
We know how to build more resilient structures. But you don’t want to end up as an island of resilience in a sea of fragility. Not a very attractive place to live right now with a great house if everything around you is waste.
So part of the other key message is we have to think about how we aggregate and look at the resilience around the risk that’s shared in a watershed or is shared in a wild land, that is shared in a coastal region.
Here, I think, is a core challenge we have at the national level that the bill is—that the law is designed to address but I worry could, in fact, make it even more—could exacerbate this issue. We have an overwhelming lack of capacity in rural America, in American—our Native American tribal nations, with capacity to even be able to plan and to put project proposals together.
This has been recently mapped out by a nonprofit called Headwaters Economics. All that orange you see here—the lighter color—that’s all places that have, like, no planners, like, zero and/or a few that are shared across a few towns. How are we going to take the places that are most vulnerable in our country where equity is greatest if they don’t even have the means to plan? And so at the state level, obviously, providing capacity is key, and I’m going to suggest an idea and going to finish up with this about how to do that.
One of the things that we’ve been working on in New England that I’ve been spearheading an effort is to take this other great resource we have, I would argue, one of the infrastructures that we didn’t identify as critical but we have found in the pandemic is truly is, is our education infrastructure. Try running households without having schools open.
But higher education is a tremendous asset as well. What you have in colleges and universities, publics and privates, are cutting-edge expertise to help think about how to deal with these complex risks that we’re facing, to address sustainability, address resilience, climate change, and equity—you know, folks who’ve spent a lot of time, like I have to do, writing proposals. So there’s expertise there.
We need a workforce that actually can deliver on this infrastructure, and making sure that we actually have a workforce that can support a green economy, a blue economy, is something that universities and colleges, community colleges, are going to have to do. So let’s get them involved.
And the other great thing that they can do is facilitate the cross jurisdictional needs, the multi-sector needs, the private-public needs, so bringing them to bear. And as one illustration of, I think, where this is already showing some fruit, with the funding that the Economic Development Administration had through Build Back Better grants, there were five awards made for phase one grants in New England. Four of those were university led. One at my university, Northeastern, involved Massachusetts, Maine, and Rhode Island.
I think it was an attractive program to the federal government because it was multi-state and it’s looking at biomanufacturing, creating a cluster. The University of Rhode Island’s led an outstanding proposal for a blue economy tech cluster, and the University of Maine has led one on northern forest bio economy cluster. The University of Connecticut took one in offshore wind. There are other examples around the country.
But I highlight this because if we’re thinking about trying to come up with the appropriate projects to address resilience, sustainability, and equity, all our states have an asset in them—our public and private universities, our community colleges—and engaging them is key.
So, in conclusion—last slide—and just to give you an example of one we’re trying to work in real time, because to be sort of practical about this and I’m hoping that there are many best practices that are out there, but our challenge for a single rural community is not just they lack capacity, but even the best project isn’t sizable enough to attract sufficient investment. It’s not going to be that attractive for federal and it, certainly, isn’t attractive for major private investors.
The key is to think about how you bundle, and so we’ve been looking at three mill towns—Millinocket, East Millinocket, and Madison, Maine. They’re next to rivers where they had paper mills that all went—like so many places in rural America, they’ve been shuttered because of, you know, the way our economy has changed.
But they have access to a centuries-old clean energy power source called hydropower, and they have hydroelectric plants and they have wastewater plants that were built for those mills, and repurposing them to think about doing it to create a green economy. And some of the ideas here are taking an airport into solar farm and a biomass power generation center and the—(inaudible)—bark digester here, taking bio material as a way to draw us—these are real projects that have real potential to not just be done in these three mill towns but there are ninety mill towns across New England that, similarly, no longer have the mills but have the hydroelectric sources. Thinking about inventorying those and then bundling even small communities together, and if I can do fifty of those projects now Goldman Sachs is interested because now real money can move to actually make stuff happen.
The key is to think about not just infrastructure as replacing the backlog of stuff that’s broken or poorly maintained, but is sparking innovation, the economy that’s going to compete, that’s going to transform our rural communities and states who have been left outside of the boom times that we had over the last fifteen, twenty years.
We can do that. But we have to think in a coordinated way, we have to think regionally, and we have to think about not just using public dollars but private dollars.
And with that, I hope I’ve done enough to generate the conversation here, and I’ll go back to you, Heidi.
CREBO-REDIKER: So, first of all, thank you so much. That was great, and I love the idea of trying to get state and local governments hooked up with some of the local—state and local, public and private universities, that can actually help them put together the types of project proposals that will get their projects funded in a way that needs to be shaped, I think, a little bit differently than we’ve traditionally done.
We have a couple of questions already in the Q&A, but the first one I wanted to throw your way, Stephen, is, you know, the whole concept of, like, doing multimodal where you’re thinking about, you know, looking at, you know, how—you know, how—you know, a port, a highway, an airport, and a rail system might work together to actually mitigate some of the resilience risks that are out there, from both being interconnected and from weather and, you know, storm surge or what have you.
But the programs that are being rolled out right now we’re still in—from the federal side, they’re, like—they are as siloed as they’ve ever been. You’ve got Department of Transportation broken up into these silos and you’ve got Department of the Interior with, you know, all their silos. You’ve got EPA. I mean, all of these different federal programs are—unfortunately, they’re still as siloed as they were, you know, ever.
Is there—you know, what—do you think that they are going to take a positive view of a multi-modal resilience request for grants or is that something where you’re still going to have to go to the Department of Interior to talk about this risk or, you know, to—or Department of Transportation to talk about a port risk?
FLYNN: Yeah. My sense here is, you know, it’s going to be hard. Some agencies are going to be better at this than others. The White House has made clear that they want this level of integration as, not surprisingly, that’s almost always been the case. The challenge is getting it down to the program manager level.
I think the key here is that it probably means that you are actually going to have to shop for different programs. But my experience has been when you go to the federal players and saying, your money is actually going to be matched by this other grant I’m getting from the Department of Energy, you know, along with what we’re getting from housing and so forth, that’s a bit of a criteria often in these issues here is, you know, we’re putting resources in. Can we get a bigger bang for the buck from it here? Yeah, because—and if you can bring the private sector piece as well, that you have ESG funding, that also is going to be differentiated as well. And it’s not that every one of these is going to work that way, right. It has some level of sophistication.
One of the jobs of Mitch Landrieu that—you know, a former mayor of New Orleans—has been charged with by President Biden is just this kind of herding of cats. But, again, the key is—I put those numbers in front. One point two trillion. Woo, it’s got our attention—53 trillion (dollars) in ESG funding—it’s because our—you know, our—those folks in the private sector understand we have to make these investments for resilience, for sustainability, and for addressing equity issues, and those can be leveraged as well. In most cases, without the adequate public investment to seed it, you’re not going to access to the private funding.
So, yes, it’s not going to be easy and this is why, again, bringing in—you know, there are going to be some consultants. So what I really worry about here is the places that have been growing in this country have been doing kind of very well—the Floridas and the Texases and the Californias, Virginia, and so forth—they have lots of planners and they’re kind of geared up. Hey, we can chase these resources.
The places that have been in the Rust Belt and rural America that have been under served, that can’t even afford a planner—I mean, we’re still talking about this as trying to address equity issues—we could leave them further behind if we don’t find a way to bring the capacity to allow smaller communities, some of the states that are more strapped for capability, to come to the table. And the way I think, in part, that’s done is that collaboration. We’ve done a drive in New England. You know, in New England there’s an old expression here, which is a great neighbor is a fence.
You know, so—(laughs)—you know, playing well with each other is not a natural attribute of most New Englanders. But what a reality is here is it doesn’t make sense. When you look at risk—when you want to build the blue economy, you know, doing it in just Portland, Maine, doesn’t make a whole lot of sense. You’ve got the whole seaboard there that you can tie it to.
So the willingness to look across border as well, I think, is going to be important to look at, you know, addressing the issue in a watershed, addressing the issue in a coherent economic unit, a cluster, that says I’m tying things together and I’m not bound by just one town or one county or one state line. I’m thinking about it more holistically.
That’s the key to building more resilient communities and it’s going to take a nimbleness. But the resources are there. So that should give us, hopefully, the impetus to push the envelope.
CREBO-REDIKER: So, I think, Pennsylvania was actually very effective in getting—in pulling a lot of bridge projects rebuilding bridges across the state in order to get grant—federal grant and loan money.
So it’s, like, I think, that is absolutely the way to go. If you work—to the extent that you can make, you know, one small project a very big project when you approach for funding, I think, that’s—that could be a very compelling application.
You started with Florida on your last response. Mary Alford is a commissioner in Florida, who asked about why no—you know, because the sums are so significant, and 1.2 trillion (dollars) is a very large number but it’s a drop in the bucket compared to what the actual needs. It’s a good down payment. And so her question is the National Infrastructure Bank, which I have a long history personally with, and it did not make it into the bipartisan bill. It got dropped at the very last minute. It is a great idea.
The one thing that I, you know, was—I’m consoled with the fact that there are a number of loan programs that exist in both. The Department of Transportation has TIFIA loans that do the same type of—it’s actually the whole—the Warner National Infrastructure Bank bill was based on the TIFIA loan program for transportation, which has been augmented in terms of the types of modes of transportation that it will fund.
There’s also a huge amount of loan funding, government federal funds that are cheap and available from the Department of Energy. So they have huge lending authority. In fact, there’s a guy there named Jigar Shah who runs the loan program, and they’re—you know, they have—you know, they are open for business and they have their act together and they’re good to go.
It’s not a bank. It’s not consolidated with other types of infrastructure but it’s there. Same thing with rail. We have, you know, big lending programs that are available for rail. They’re complicated, and it goes back to Stephen’s point where you probably want to go and connect with a university or, you know, someone who has done—who’s worked through the loan programs before to figure out how to access those funds.
I am disappointed that there’s no infrastructure bank, but it’s just not going to happen this time around because that was the big shot. So we’ll see—
FLYNN: I’ve been advocating for that for years as well and, I mean, it’s, clearly, the kind of model that we need. But, you know, this—again, 1.2 trillion (dollars) is important, right. It really is an impetus.
But there are ways to think creatively about using those funds and we need to, and I think we do need to start demonstrating it as a down payment. It’s like the point I tried to make at the outset, right. We’ve taken our infrastructure for granted and it’s undermining our competitiveness, and we’re seeing it play out right now in the supply chain realm.
You know, people took largely—(inaudible)—grant that included most of the private sector that the physical mechanisms for moving goods matters. It’s not just the contractual ability to go anywhere on the planet and find the lowest priced product and be able to get it just in time to when you need it.
What made that possible is the conveyor belt of a—an extraordinary intermodal transportation system that became highly concentrated because of the rewards of efficiency, and our challenge about having 40 percent of all the nation’s cargo come into just the Port of L.A. and Long Beach is that that’s where most of the distribution centers and the important Alameda Corridor with the railheads and, of course, a large consumer market as well.
And you can go to another port to move a shipment but there’s not any of that shore side infrastructure. And so we really need to say—and this is a key element of resilience and applies in the energy realm as well, is to think more in terms of networks that can be disaggregated. On dark days they can, basically, island themselves and operate like a micro grid that can be networked together and provide same levels of efficiency that often the big mainframe systems that we have today do.
So in the case of the maritime it is short sea shipping, infrastructure that allows you not just to stay in a congested urban area but rail that goes you into the interior. We would then have access to surface transportation that can move it where it needs to go.
This is the kind of investment, you know, that our forbearers made when they built the inland waterway system and the canals that we rely on that now people just sort of use as bike paths, right. That was the core of our economy and there’s still need for those capabilities. But it’s got to be clean energy if we’re going to be in a better place, and we’ve got to make sure that there’s affordable housing.
The key is that we have to be able to talk about infrastructure in ways that provide value to our—you know, to citizens to make sure that they’re willing to make the investment but also that is comprehensive if we’re going to get this resilience outcome.
CREBO-REDIKER: So we have a question from Patrick Walsh—Patrick, I don’t know where you’re from because it doesn’t say it on the Q&A—but how do we get legislators and other policymakers to care about resiliency when most are thinking short term? Many are looking for port projects that will get them reelected, and somebody else chimed in that, as Patrick said above, resiliency must be long term. New York City Waterfront Resiliency Committee is working for New York City.
Maybe you can approach that and then connect it with a later question from Mary Alford—how is ESG funding different from the National Infrastructure Bank?
FLYNN: Well, mainly, from my time at the Council on Foreign Relations, I’ve had the privilege of testifying thirty-two times and I think it is now before Congress. I can say they are very slow learners. (Laughs.) I can’t tell you exactly how to do it. I’ve been sort of trying to pound it for a long time.
But here’s, I think, an element of the resilience piece, that story that needs to be thought—you know, better captured. We’re seeing with the more frequency of disasters and the intensity of disasters that the cost is just—is unsustainable.
You know, the degree to which we have multibillion-dollar disasters, you know, has exploded over the last two decades, and almost every one of them now is, it’s in no small part for that case I made before about because we’re so hyper connected that a disaster will have far more destructive and costly consequences.
And so the investment in mitigation, you know, ideally—you know, the old ratio is, like, one to six. Every dollar you put in will save that resource relative to the cost when disasters happen, as they will with greater frequency.
So there is both a near-term need because now we’re seeing it every year, every season, play out on the wildfire risk, the flood risk, a hurricane risk, the tornado risk, that says we’ve got to up our game and be able to mitigate these more effectively so we can avoid these catastrophic losses.
At the same time we’re making long-term investments in infrastructure, every one of those investments should embed a resilience best practices into them and sustainability best practices. You know, how to change—you know, it’s this chicken and egg, of course, challenge here in part. If citizens aren’t really that engaged around this then, you know, the elected leaders often reflect that, and it kind of goes both ways.
I think it’s key for all of us is to raise the awareness of the value of our infrastructure in terms of what it does for us. People often only see it when it’s not there anymore. (Laughs.) So you have to do a much better job telling the story of why it is these investments need to be made, and that’s why I shared that story at the outset, again, of, hey, when I grew up this was the way it was.
I mean, we’ve got to find a way to make this more relatable. But this is an investment in our competitiveness. You know, every time there’s a major disruption folks evaluate where they want to live and how they want to invest, and, increasingly, they’re going to look for the places that are better able to handle that risk.
And so if you are a place that is playing footloose and fancy free, this is not a sustainable strategy in the kind of disruptive world we’re in. You know, it does require people acknowledging some facts of life like climate change is happening and the frequency, intensity of these events are one offs or acts of God that we have no control over.
You know, we often talk about disasters as—almost as unknowable. Actually, we know a lot—(laughs)—and what we know most and are able to do increasingly is to model how disasters will play out on things that we value. And then if people say, I’m still willing to live with the risk, well, we’re a democracy. They’d be willing to do that.
But we could do a much better job, I think, of showing folks where the water is going to go, where this is—what it’s going to disrupt, and when you lose those power you lose hospitals. You lose maternity wards. You lose, you know, your ability for your water to flush your toilets. You know, you make things in a much more understandable way and get—and help to drive that message in that, hopefully, leads to the investment.
CREBO-REDIKER: So, Patrick Walsh, who asked the question originally, is from Massachusetts, from the Joint Committee on State Administration and Regulatory. So he can reach out to you directly, Steve, right?
FLYNN: I would welcome that. (Laughs.)
CREBO-REDIKER: OK. So, question from—the next question from Wayne Domke, who is a trustee in—(audio break). Is research in fusion included in these infrastructure funds? My understanding from the Department of Energy’s loan program is that they’re actually looking for applications right now.
I would just—I would go and check. Stephen, maybe you know. I’m pretty sure that they’re looking for proposals to fund fusion at the Department of Energy.
FLYNN: Yeah. I’ll just say that, you know, virtually all the agencies’ research budgets have been plussed up and they are very much driven by you need to address equity. You need to address climate change. You need to help, you know.
And so this, again, goes to, potentially, partnering with colleges and universities because they’ve got to have more competitive proposals, if they’re partnering with the community, if they’re partnering with the state, if they’re partnering with, you know, an infrastructure manager, the Department of Transportation, and so forth.
Everybody wins, and a key is don’t waste your time, you know, talking to professors like me. Go to the presidents. I mean, governors can get presidents anytime they want, and presidents are mayors of their own cities. I mean, most of them are, you know, in a pretty—they get a lot of resources that they command.
And a neat outcome, actually, of COVID, as terrible as it’s been, is it drove higher education to have to come together. Folks that often were competing with each other, you know, now had to talk with each other. They had to come up with common plans of how to deal with, you know, students, vaccinations, and all the rest of it here.
And what we were able to do and, particularly, in Connecticut and Rhode Island was to leverage that cooperation that was already there amongst the leaders of these institutions, the presidents, and saying, hey, can you work with the state to support recovery? But that’s just an ask. I mean, really, if you ask the leadership of these institutions they’re vested in this, and I think it can give you more capacity than maybe you hadn’t thought of in the past.
CREBO-REDIKER: So I’m just going to remind everybody, you’re welcome to ask questions live. If you raise your hand, we can get—we’ll get you live asking your question. You don’t have to just use the chat, even though the chat’s fine.
Mary Alford has the question about how is ESG funding different from the National Infrastructure Bank, and I think, given the slide that you have, you might want to take a stab at that.
FLYNN: Sure. The core here is that we’re seeing a generational shift in investment where, particularly, you know, the Millennials and the Generation Y are going, you know, I don’t just want a return on my investment. I want to make sure we’re doing some good.
You’re seeing more and more pressures on boards of directors, on companies, that they have to demonstrate they’re not causing harm, that they’re advancing equity goals, they’re advancing environmental sustainability goals, and so forth. And so big players—the Goldman Sachs of the world—have large funds that are set up that have to go to projects that actually can demonstrably move the needle on helping community—you know, helping to advance sustainability goals, equity goals, climate change goals.
So if you’re able to demonstrate that a project—it has to, of course, be something that has a return for the investor. But if you’re able to demonstrate that the project is, in fact, going to improve along those lines of, you know, the environment, like a climate adaptation project would satisfy an E in ESG funds, if it’s going to improve the community’s resilience and improve its social capital that are under served.
The three communities that I highlighted in Maine, these are very small towns, but they’re all in opportunity zones. These are tax-deferred zones that the federal government created out of the 2017 tax act that, again, a lot of rural communities were not well positioned to take advantage of.
But there is more capital in opportunity—qualified opportunity funds than there are fundable projects. So bottom line here is it is about interacting with key private investors. But when you’re looking at the larger funds, again, you know, you’re not going to hit them up for 3 million (dollars) or 5 million (dollars). You know, they’re going to want to see, you know, a hundred million dollars. Now we can talk.
But for small communities, you can get there by bundling childcare centers, by bundling a series of climate adaptation projects across multiple communities. Then you can get these large investment players to come to the table. And, potentially, in the state economic development side, of course, if you’re leveraging, hey, we’re putting public resources to do the things that don’t necessarily have a good return on investment but are requisite for, you know, being able to broadband, we need broadband in order to get, you know, workforce housing. I can’t get workers if they got to show up and there’s no broadband.
So, hey, we’re going to use the federal funds to support that. Now you can invest in workforce housing. It can be located near this new clean energy project, which is going to be, you know, manufacturing bio—you know, bio forest goods and that kind of thing that, again, can fit on that—check these boxes off on ESG. That’s how you have to be thinking, I think, to access those enormous resources.
And it’s doable, and the private players will help you with that. But scale is important.
CREBO-REDIKER: And just to go back—on the National Infrastructure Bank versus grants and all the loan programs versus grants, the loans are meant to be repaid. So even if they’re—you know, if they’re coming from any of the federal government pots, if they are loan programs there has to be some commercial viability that they’re going to be repaid in one way, shape, or another.
I’m going to go live to Kyle Jacob Murphy with a live question, and if you could just tell everyone where you’re from and what you do before you ask, that would be helpful.
Q: Certainly. You already said my name for me. Thank you very much. I am a paid intern with Senator Runestad in the Michigan Senate and I was kind of just sent here to see what was up.
I really like it so far, but I had a couple questions about everything I’ve seen so far. So in terms of, like, when we say resilient, do you mean how to—can withstand the disasters of the next fifty years, a hundred years, or resilient as in just won’t fail on us? And—oh, you can answer that one first.
FLYNN: Sure. I’d be happy to try to take that on.
So it really depends. If you really think about baking in resilience you’re looking at its overall life of—the protected life of—if it’s a physical asset—like, you’re talking about, say, a bridge, right, and you’re saying I built this bridge and expect it to be around for eighty years, then you’re looking at risk over that likelihood over those eighty years and you want to design it so that it can, ideally, mitigate the risk, that if the events that you think are going to happen would lead it to catastrophic failure, right? You’ve built it for eighty years. You want it—and want it to last that lifespan.
There may be more extreme events than you can design for. Under those scenarios here, you also want to have a capacity to recover from the event. So some of the big thinking—I, actually, have a colleague who is a professor of civil and bioengineering who developed this twenty years ago, essentially, taking the cost of electric fuse and putting it into the structures of buildings so that it takes most of the energy when the ground moves with an earthquake is dissipated into these replaceable members of the building, and so the building can be quickly put back to service.
So these are some of the designs that are out there. The challenge has been no building code has required this so there’s no demand for the innovation. And so the public—the insurance sector and the private-public sector have to work together to, essentially, think this through. But the key is you’re looking at the lifecycle—the expected lifespan of the investment and you’re saying is it going to be able to perform over that lifespan, and have I adequately embedded things that, ideally, mitigates the risk that it will fail during that lifespan.
And so some things that are much shorter term you don’t need to do as much. Some things that are not as connected as other things you don’t have to do as much. The key is looking at the—doing this consequence analysis as a part of the cost benefit of making the appropriate mitigation measures.
CREBO-REDIKER: And would it be fair to say if it’s a critical piece of infrastructure that is connected that the cyber vulnerability is something that would be needed to be solved for sort of ASAP? It’s not one of those things that’s just, like, planned out—
FLYNN: Absolutely. Now—
CREBO-REDIKER: —the next fifty years we care about it, but, no, it’s actually, like, right now?
FLYNN: As I highlighted, we’ve gone to the Internet of Things, really, just as early—I mean, as late as 2007, not that long ago, we didn’t—had hardly no physical infrastructure tied to the net. You know, we did it for email, you know, and web pages as they were being developed. Now we’ve taken most of the physical infrastructure we have and we, essentially, put sensors and we put controls, increasingly, that are accessible by the web.
So as we saw, of course, with the Colonial Pipeline last year—a bit of critical infrastructure. If you don’t have fuel, life is really hard for lots of things. You can disrupt it not by an act of sabotage but you can do it by a cyber physical attack, taking out the cyber means for doing that.
And so one of the priorities in the significant funding in the Infrastructure and Jobs Act for cyber investments, but it’s the cyber physical piece that, really, is something that I worry a lot about and it’s something that we have to be thinking about right now. We rushed to embed cyber infrastructure because it gave us efficiencies. It gave us, again, visibility. We used to have to send a human being out to check the pipeline. Now I can monitor with the sensor and do it from my smart phone. Cool, except now somebody who’s got, you know, mischievous or a nefarious reason wants to do some harm to that, same control, and cause real problems.
So we’ve got risk and we do have to, in fact, think about how we invest in that. And again, the cost of not doing this is enormous. We’re seeing it play out in the headlines almost every day, and so this is something we can’t afford not to do and that’s how we have to, again, talk about it.
And, by the way, when we come on the other side of that, when we build things to be more resilient they’ll do less harm to our environment. They will be—they will, ultimately, assure better service and function that will allow us to be a more productive and competitive economy.
CREBO-REDIKER: So the—just thinking about one of the questions that was asked earlier about short-termism of legislators, the good thing about the whole resilience bucket of funds is that it is new money that is not—it’s not the way that we traditionally have gone and just accessed pots of money from state and local—for state and local governments from the federal government in the past.
So you can augment. If you’re a local legislator, you should be happy about augmenting the amount of funds that you bring back if you can access a bigger pot.
We have Jon Thompson from Sedona, Arizona, with a question. We sometimes hear an estimate of how much it will cost to update all of our critical infrastructure. But has anyone calculated the annual cost if we were able to keep it updated indefinitely? And since we seem to keep adding new infrastructure systems while rarely retiring existing ones, how is any of this sustainable?
And, Jon, we all volunteer to sacrifice to come to Sedona to actually help you with this issue. (Laughter.) It’s, like, one of the most beautiful places on the planet.
FLYNN: Yeah. I mean, we are going to have to—I, roughly, put things into three buckets in terms of how we have to think about it and often these get merged and confused. There’s a sustainability bucket that’s, largely, about let’s stop doing harm. All right. Let’s stop doing the things that we know are going to contribute to risk, and we know that if we continue, essentially, to pump CO2 into our—you know, in our atmosphere, that’s going to be it.
So things that will get to carbon zero or things that prevent further harm. Resilience is, largely, about designing for whatever we were doing we haven’t done enough of it and we’re going to be facing—even if we went to carbon zero today, we have decades of still—of consequence with more frequent, more intense, weather events and so forth here. That’s just what’s happened to Mother Nature. Regardless of its source, that’s where we are. And so how do we design in that reality? How do we operate in the reality?
And then there’s the big climate adaptation piece, especially as applies to sea level rise. I mean, the fact is some of the places that we’re in are not going to be sustainable decades from now. And so making an investment today that’s supposed to be around for decades that’s going to be underwater in thirty years or fifty years or sixty years, that’s not very smart. We have to then think longer term.
And so I put those three buckets because there’s, clearly, things that we can do right now to ameliorate risk around the sustainability side and, actually, there’s a lot that’s out there. That’s probably where most effort has been put.
The resilience is a relatively newer space. But as there is a lot—as I tried to articulate in this short time we’ve had together here, there’s a lot around how to design for resilience at a(n) asset level and then there’s also how to do it as a part of regional and urban planning to deal with risks like watershed flooding and so forth here.
Architects are doing this work, engineers are doing this work, and there’s—the scientists are providing best modeling tools. Network scientists are allowing us to understand connections and (interconnections ?). We are a lot smarter about how to actually do this in measurable ways to then solve the cost benefit analysis than we thought of.
But we’re also going to face the very hard choices that some of the infrastructure we have, some of the places where we live, may not be sustainable, and that’s going to require, you know, some retreat of investments there and making plussed-up investments in other places, and those are the hardest decisions politically for us to have to have a dialogue about. But we need to start having that conversation sooner versus later because it’ll take you a long time to do the adaptation at a time when we see—you know, again, those sea level rise, the seven-foot that I showed you in Boston—the thing is, is that if you have—storm surge just pushes that amount of water in the storm so it could be ten feet of water that shows up. But it’ll recede. But as we keep adding up more water then, obviously, that becomes a nuisance tide. Every high tide, basically, becomes that flood event, and at some point stuff are, literally, underwater.
So, you know, this isn’t going away. We’ve got to figure out how we step up to it. But there’s opportunity here as well. If we get this right—the rest of the planet is also faced with this. So I’m glad this is sponsored by the Council on Foreign Relations and I run the Global Resilience Institute, is because these are shared challenges that every community and every part—every continent is facing, and those who develop the best practices are going to be, potentially, in a place to export those as a part of a successful economy. But, again, you will also attract people to invest and live in your areas if you get this right, and woe to you if you don’t.
CREBO-REDIKER: OK. So we have a whole two minutes left. I’m going to run through, quickly, Mary Alford has posted a number of good links and a best practice in the chat. And, Mary—I’m sorry, Alison Alter from Austin is a councilmember in the office of the mayor—of city council of Austin has a question. More information on how ESG funding might work. How should we think about accessing that funding and to do what kind of projects?
And then I will answer Steve Carrow’s question. Share a link on the best summaries of and how to understand the IIJA. I’m going to put something that Mitch Landrieu has drawn together that’s the first stab at that and I’ll post that in the chat while Steve is addressing the ESG question.
FLYNN: Yeah, and I guess I would probably—just as you run down to the time here, please reach out to me. I’d be happy to help you make some connections. I’ve been having these conversations with some of the major ESG funders and they’re some of the household words you know on Wall Street.
But there also are real opportunities—pension funds, others, that are really moving into the space. But having, essentially, fundable projects, projects that have some return and which you can measure that it actually is going to improve sustainability goals, resilience goals, that can actually account for and be managed well on the governance side. Those will be key. There still will have to be return to investment again. This is not just purely grant money. This is—but there’s opportunity.
Again, what I really want to encourage here is to think much more creatively, not just chasing, you know, this pot of gold at every individual rainbow, but, really, think about we’re at this unique time in our generation where you have actually a surge of private funding recognizing this is real and we have to do something about it, and for the first time in forty years real federal resources starting to flow to address this issue. And shame on us if we don’t get this right—you know, if we don’t do more. And, again, that message is, well, we really have to be looking out for the communities who have limited means: our Native American tribal nations, our small rural communities, states that have not been growing so don’t have many planners. Let’s make sure we do this in an equitable way, and a way to do that, in part, is by being good neighbors, reaching out in a big city and partnering with other smaller cities that don’t have those means, and then bundling efforts together. Not every man for himself, zero sum. That’s not going to work.
We’re not going to get to a better place unless we work in a much more collaborative and cooperative way, and we’ll have strengthened our civil society and our civic society if we do that. There’s a lot of opportunity here to right some of the things that have been going not very well in our country if we do it right.
And I want to applaud and thank all of you who are on the frontlines in states and locals managing these issues day to day despite limited resources, exhausted because of COVID. Thank you for coming here today to have this conversation with us. And if there’s ways that I can be helpful, I would, you know, welcome that—[email protected], and Irina and Heidi can connect you as well.
CREBO-REDIKER: So I just posted the bipartisan infrastructure law guidebook on how to access and what all the programs are in the chat. If you can’t see it for some reason, I think Irina can send it out to the whole group. And then I’m going to turn this over to Irina to close out.
Stephen, thank you so much. Everybody, thank you for joining today. I hope this is helpful. And over to Irina.
FASKIANOS: Thank you so much, both Heidi and Steve. Appreciate it. And I just want to wrap up and say we will send a link to this discussion and the transcript. We’ll include Steve’s email address and the link that Heidi just posted so you don’t have to scramble to get it from the chat.
You can follow Dr. Flynn with the Global Resilience Institute on Twitter at @Resilience_NU and Heidi at @HeidiRediker. And, as always, please go to CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for more expertise and analysis, and email us, please, at [email protected] with ideas on other topics you want us to cover and how else we can support you in the very important work that you are doing.
So thank you all again for being with us today and, again, thank you, Heidi and Steve.