The Cost of Delay in Addressing America’s Infrastructure Needs

The U.S. government could save trillions in infrastructure costs by acting now, not later

By Matt Brown

 

As the federal government postpones addressing America’s infrastructure needs, the cost of delay continues to climb. A new Common Good analysis reveals that the cost of delay is growing at a pace of $40 billion per year for a total of nearly $3.9 trillion. Yet a three-page legislative fix could solve much of the problem.

In 2015, the nonpartisan Common Good, where I am Executive Director, published a report titled “Two Years, Not Ten Years,” that concluded that delays associated with infrastructure permitting in the United States impose costs totaling about $3.7 trillion. That includes direct costs associated with construction delays, plus economic and environmental costs of failing to upgrade America’s dilapidated infrastructure.

The new analysis reveals an increase of nearly $200 billion in five years, since the 2015 report drew heavily on data provided by the 2012 “Infrastructure Report Card” of the American Society of Civil Engineers (ASCE). The new analysis draws on the 2017 Report Card.

Though several categories of costs have remained unchanged, in part because the ASCE did not produce newer numbers, others have shifted since 2012. Energy costs, for instance, have declined somewhat, due in large part to a burst in renewables development toward the end of the Obama administration.

Costs for roads, bridges, and water infrastructure, however, have both increased since 2012, reflecting another half-decade in which decay outpaced investment. Those increases more than matched the drop in energy costs, leading to the continued climb in the overall cost of delay.

The $3.9 trillion total is essentially waste, and could be avoided by simply improving our permitting system. The costs fall into three main categories: over $600 billion in direct costs due to delay-related factors, like increased overhead; nearly $3 billion in economic losses due to prolonging infrastructure deficiencies, like shipping bottlenecks and brownouts; and nearly $300 billion in environmental costs due to delay in addressing ongoing inefficiencies.

That total is remarkably close to the size of the entire US infrastructure backlog, now estimated by the ASCE to be $4.6 trillion. That shows how much opportunity there is for our nation in reducing the time required to fix our infrastructure, as some of these savings from avoiding waste could be applied to the backlog. In addition, the overall economic and environmental benefits from modernized infrastructure will significantly exceed the costs.

“Two Years, Not Ten Years” called for a dramatic reduction of red tape so that infrastructure can be approved in two years or less, as it typically is in “greener” countries like Canada and Germany. The report is widely cited as the basis for permitting reforms initiated by executive order by the Trump administration, but legislation to cut the red tape permanently is still required.

Common Good has proposed a three-page legislative fix to streamline permitting by giving officials the authority and the responsibility to move projects forward and by returning the review to its original public-focused intent. And it doesn’t require changing, much less gutting, environmental protections.

The legislation would create clear lines of authority to make decisions on a timely basis. It would authorize an environmental official to focus the review on material issues, not thousands of pages of trivial detail. The White House could resolve disagreements among bickering agencies, federal law would preempt delays by state and local governments on interstate projects, and lawsuits would be expedited and limited to material environmental harms, not foot faults. This legislation could save nearly $4 trillion in waste, and enhance public health and safety in the process. Those are astonishing numbers. One can only hope that they will draw the attention of Congress.

Recent media attention has focused on the amount of funding needed to rebuild America’s infrastructure – and what the mix of public and private sector funding should be. Clearly significant public resources are essential, and it’s the debate over them – and Congress’s reluctance to find a public-sector funding source – that has postponed action. But what could justify their inaction on the broader issue of permitting delay, and the almost $4 trillion worth of waste that it causes?

That waste, as well as the nation’s overall infrastructure needs, will only grow in light of additional improvements that will be required to prepare for the effects of changing weather patterns. As weather becomes increasingly erratic, for instance, power transmission and wastewater systems will be under increased stress, as last year’s hurricane season demonstrated.

The cost of delay is already nearly $3.9 trillion, and it’s growing by $40 billion a year due to Congressional inaction. Congress seems to be hoping that taxpayers – and voters in the midterm elections – don’t mind.

Matt Brown is Executive Director of Common Good, the nonpartisan reform coalition. For more information, visit www.commongood.org

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