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John Arnold on Why It’s So Hard to Build Things in America

On Bloomberg’s Odd Lots, Arnold Ventures’ co-founder and co-chair discussed the need to speed up infrastructure development.

Image of worker on scaffolding.
(Ron Watts/ Getty Images)

On a recent episode of Bloomberg’s Odd Lots podcast, Arnold Ventures co-founder and co-chair John Arnold went deep on the need to speed up infrastructure development to solve many of today’s crises, and the growing bipartisan consensus around ensuring housing, clean energy, and transportation all become more affordable and reliable for the American people. 

Here are three takeaways from that interview: 

1. Environmental regulations that were created to serve as a check on harmful projects are also standing in the way of clean energy. 
Following environmental disasters like the Cuyahoga River fire and Santa Barbara oil spill, the United States passed a series of bipartisan laws intended to help tackle pollution. Now those laws are being misused to block or delay infrastructure like energy transmission and power generation by solar, wind, and geothermal that are necessary to meet our nation’s climate goals and fuel our economy. 

[T]here was a reason why there was broad both voter support and bipartisan support for [environmental laws],” Arnold said. And it has had good impact over the years, but things have changed.” 

Part of the problem, Arnold explained, is that courts have become more aggressive in interpreting these laws, which makes it more difficult for developers to build. And opponents to new development have become smarter about utilizing laws to stall and cancel projects. 

That does several things,” Arnold said. It greatly increases the cost to the developer to do it. It increases the time to bring these important infrastructure projects to the market. And it just provides this kind of general sense of malaise that’s developed across both the end users of these infrastructure projects as well as the developers.” 

2. The Inflation Reduction Act (IRA) opened the door to a bipartisan coalition around permitting reform. 

The IRA includes extensive provisions to drive new clean energy production, but it also brings sharply into light the barriers our current regulatory system creates for getting projects deployed.

The reality is that modeling things on spreadsheets versus actually building physical infrastructure are two radically different things,” Arnold said. So then the next 12 months [after the IRA’s passage] was about, holy cow, we need to change and make it easier to build because, instead of trying to stall and cancel projects, in order to have an energy transition in this country, we need to build a lot of things.”

This realization means that environmental groups appreciate the need to decarbonize now have an interest in cutting the red tape that stands in the way of needed infrastructure. This dynamic creates a bipartisan path forward in Congress and state legislatures. 

3. Philanthropies can play a role in making sure government policy strikes the right balance.

People often bristle at infrastructure being built in their backyard, but the nation needs clean energy generation and transmission, critical minerals mining, and good transit options to power our economy. Philanthropies like Arnold Ventures can help identify policies that balance interests and bring together coalitions. This means testing new ideas, studying the effectiveness of policies, and providing alternative perspectives from the usual policy players. 

One thing we bring is that we don’t have financial incentive or financial conflict on things that we’re advocating for, whereas almost everybody else in DC or a state legislature who’s out there lobbying [has] a financial stake in the system that they’re trying to protect,” Arnold said. So we’re providing that tension in the system.” 

Overall, this means giving policymakers the information they need to make smart decisions. 

They should get kind of the full scope and have as much information as they can. And I think that’s what our role is.” 

    Listen to the entire podcast here: John Arnold on Why It’s So Hard To Build Things in America