Executive summary
The United States (US), the world’s largest economy, grew steadily between 2010 and 2019. The economic downturn caused by the pandemic was reversed swiftly and in 2021, the recovery was more rapid than in most OECD countries. Yet, the pace of the recovery is easing due to surging energy prices arising from the Russian war in Ukraine and supply chain disruptions related to the pandemic. Over the past decade, the United States managed to decouple emissions of greenhouse gases (GHGs), air pollutants, water abstractions and, more recently, domestic material consumption from economic and population growth. However, high consumption levels, intensive agricultural practices, climate change and urban sprawl continue to put pressure on the natural environment. The shale gas revolution has turned the country into a net energy exporter. There are significant disparities in population exposure to air pollution, but national averages of most air pollutants are below national standards. Freshwater abstractions have decreased but per capita total abstractions remain among the highest in the OECD. Water quality has improved, but excess phosphorous remains a main threat and comprehensive information to monitor water quality is lacking.
The United States met its 2020 interim climate target and is broadly on track to reach its 2025 objective. Still, US gross GHG emissions per capita and per gross domestic product (GDP) are among the highest in the OECD due to the dominance of fossil fuels in the energy mix. The recent ramping up of ambition and acceleration of action to address climate change is a welcome development. The government reaffirmed its commitment to strengthen implementation of the Paris Agreement under the United Nations Framework Convention on Climate Change. The government has set goals to reduce net GHG emissions by 50-52% below 2005 levels in 2030 and to achieve net-zero emissions by 2050. Landmark climate legislation, the Inflation Reduction Act (IRA), was passed in 2022. It provides at least USD 369 billion for investment in programmes aimed at tackling climate change. Nevertheless, additional actions will be required to reach the 2030 target and to keep the target of net zero by 2050 within reach.
Chronic underfunding of infrastructure investment contributed to the accelerated ageing of infrastructure generating a multitude of socio-economic impacts, ranging from public health to environmental pressures to economic challenges. The impacts of climate change increase the need for resiliency. The 2021 Infrastructure Investment and Jobs Act (IIJA) provides the largest and most comprehensive funding for infrastructure in recent US history. Alongside the IRA, it will help close a significant portion of the US infrastructure funding gap by providing USD 1 200 billion, including about USD 550 billion for new projects. Following the passage of the IIJA, EPA is making significant investments in the health, equity and resilience of communities, allocating more than USD 60 billion of funding. Investments in water will leverage State Revolving Funds, which have a demonstrated track record in facilitating low-cost, long-term financing for investment in water-related infrastructure.
The wave of massive investment in a short timeframe arising from the IIJA (five years), alongside the IRA (ten years), is expected to intensify competition in supply chains and the labour market. Moreover, after completion of IIJA capital investments, reliable funding capacity is needed at local level to operate and maintain the infrastructure over operational lifetimes.
The successful implementation of infrastructure investment requires robust cross-sectoral (inter-agency) and multi-level (between federal, state, Tribal and local jurisdictions) collaboration. Infrastructure governance in the United States faces shortcomings, notably related to long-term strategic vision and ensuring efficient and effective procurement. The permitting process is a main factor behind the long duration of certain infrastructure projects. To implement the vision of the IIJA and the IRA and meet time-bound climate, environmental and social objectives, further streamlining of the permitting process is needed without undermining the integrity of the process. Mainstreaming climate considerations in all projects will be critical to avoid undermining progress towards climate targets.
Environmentally related taxes accounted for 0.7% of GDP in 2020 in the United States, which is the lowest among the G7 and lower than the OECD average of 1.4%. Environmentally related taxes are a minor source of tax revenue in the United States compared to other OECD countries. Similar to other OECD countries, energy and transport account for most environmentally related taxes. Climate- and air pollution-related taxes dominate, while taxes related to biodiversity and oceans are relatively few. Excise taxes have recently been reinstated on certain chemicals and petroleum products. The IRA authorised a new methane fee.
Although only a third of GHG emissions is subject to a positive carbon price, the United States has considerable experience with a variety of tax incentives to mobilise private capital for investment in renewable energy. The IRA modifies and extends tax credits to further mobilise investment in renewable energy. In addition, the Act provides funding to EPA to establish the Greenhouse Gas Reduction Fund grant programme, a portion of which will be used to capitalise financing entities to deploy funds for projects that reduce air pollution.
Decades of research have established that low-income households, Indigenous communities and people of colour in the United States are disproportionately exposed to pollution and other environmental risks. At the federal level, the focus on environmental justice (EJ) has been progressively strengthened and mainstreamed across government agencies. Key developments include the whole-of-government Justice40 initiative to steer 40% of the benefits of relevant federal programmes towards disadvantaged communities as well as the creation of the Office of Environmental Justice and External Civil Rights within EPA. Ensuring that benefits are targeted to the most overburdened and disadvantaged communities is critical to achieving EJ goals. However, there are multiple challenges inherent in identifying and defining such communities. EJ screening and mapping tools, such as EPA’s EJScreen and the Climate and Economic Justice Screening Tool developed by the White House Council on Environmental Quality, are powerful means to identify areas for further action. Nevertheless, to date, there has been no consistent approach to defining disadvantaged, underserved or overburdened communities across federal agencies and states.
Marine litter, comprised mainly of plastic, is a pressing global issue. Global plastic production, consumption and waste has increased exponentially since the middle of the 20th century. Plastic use in the United States has been increasing over time, doubling between 1990 and 2019. The growth in plastic production, use and waste has led to increasing volumes being mismanaged and leaking into the environment, which can result in marine litter. This can lead to contamination of freshwater systems, entanglement of, or ingestion by various forms of marine life and other serious consequences for society and the environment. The United States was the top generator of plastic waste globally in total volume and per capita. US sources of plastic waste leakage into the environment include mismanagement of waste domestically and by trading partners.
Waste collection rates in the United States are high, similar to other OECD countries. However, US plastic recycling rates lag behind other countries. US recycling is heterogeneous and complex, and secondary plastic is generally not cost-competitive with primary plastic. Local recycling programmes commonly face challenges of contamination, low collection and limited kerbside pick-up. Virgin plastic prices remain low compared to recycled material (partially due to subsidies for fossil fuels used as feedstock for virgin production). Landfill disposal costs are often low, which does not incentivise material recovery. The EPA’s National Recycling Strategy is a positive step forward, with a goal to more than double the national recycling rate of municipal solid waste to 50% by 2030. Achieving higher rates of plastics recycling will likely require new policy instruments to improve economic incentives for recycling.
Federal investments in research to address marine litter have been significant. The EPA Trash Free Waters Program has developed the Escaped Trash Assessment Protocol that considers site conditions, material types and item types. The National Oceanic and Atmospheric Administration’s Marine Debris Monitoring and Assessment Project surveys and records the amount and types of marine debris and litter on shorelines. Despite these advances, there is no comprehensive national monitoring system for plastic production and use, or plastic pollution, including waste production and leakage. Marine litter datasets are not well integrated and there is no way to track the effectiveness of policy responses.
The United States has made important advances to develop legislation to address marine litter, notably through the 2006 Marine Debris Act updated most recently as the Save Our Seas 2.0 Act. The Act provides the core of the government’s response to marine litter, which focuses on provision of financial assistance and information to subnational governments. There is, however, no use of economic instruments, such as landfill fees and taxes, pay-as-you-throw and extended producer responsibility measures at the federal level.
The US policy response to address marine plastic and litter has several gaps. Clear and ambitious targets on marine litter are lacking. In this respect, the United States lags behind other OECD countries. National targets to reduce single-use plastics and to use recycled content, among others, could help put the United States on an advantageous path to reduce the impacts of plastic pollution.
Almost all federal policy instruments are enabling instruments with lower levels of compulsion. Most of these are focused on macroplastic leakage from mismanaged waste or litter. While EJ and equity considerations are rising on the US policy agenda, they have not yet been systemically considered in the context of marine litter.
The US response could include stronger instruments to address marine litter across the plastics lifecycle, drawing inspiration from policies at subnational level and international experience. For example, it could apply a national ban on some of the most frequently littered items. Regulations and economic instruments could target the production, use and end-of-life stages of the macro- and microplastics lifecycle. These include extended producer responsibility, regulatory standards, tariffs or taxes, or labelling. Federally driven policy, co-ordination and harmonisation could reduce risk of fragmentation of producer requirements stemming from the proliferation of initiatives at the subnational level.