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The Opportunities of a Pan-American Infrastructure Initiative

Written by Jacob Anderson, Noah Turner, and Will Mathison


Executive Summary of Critical Points

The United States finds itself at an inflection point both at home and abroad. Domestically, the need for new and revitalized infrastructure projects is one of the few points of bipartisan agreement in Washington. Generally, the need for this to be “green” or low or zero-carbon infrastructure, especially with regard to power generation, is also understood. Abroad, a variety of challenges will test the U.S.’ capabilities. The People’s Republic of China (PRC) continues to aggressively pursue technological supremacy, market dominance, and geopolitical advantages over the US. In particular, its aggressive campaign of building power plants of all sorts, especially nuclear, threatens US preeminence in technology, markets, and international relationships.

However, the US is not alone in finding itself at a time for choosing. Her neighbors to the south, across Latin America, also find themselves needing a new direction. Latin America has been developing rapidly over the last 20 years and is in all likelihood about to outstrip its infrastructure capabilities. Regional challenges have spurred waves of migration north, to Mexico, the US, and Canada, which have been controversial in all three. Additionally, countries in the region have been approached by the PRC to partner in development projects and loans which temporarily advance the interests of both parties but leave countries in the region vulnerable to PRC pressure and espionage – a negative for both local countries and the United States. When understood in these contexts as well as the contexts of both the U.S.’ history in the region and the ecological importance of Latin America, it is clear that U.S. interests align in one direction – toward a Pan-American Infrastructure Initiative. The U.S. must partner with nations across the Americas to build green infrastructure, including power plants and grids, to counter the PRC, advance regional stability and development, and meet moral obligations in the region.


New Era, New Challengers

In every era, the US has faced challenges from abroad. Once it was the imperialism of the Western monarchies, then fascism in Europe and Asia, then Soviet communism. Today, the U.S. faces a primary peer competitor in the form of the People’s Republic of China, which seeks maritime expansion and dominance of economic and technological markets in order to fulfill an ultranationalist agenda. Among the PRC’s targets is Latin America, where since 2005 the PRC’s China Development Bank and China Export-Import Bank have invested more than 136 billion USD. In Venezuela alone, 12 of 17 loans that originated from PRC institutions were to the energy sector. Much has been made of the potential for a debt trap within these investments, but there are environmental concerns with these loans as well- when the PRC financed a dam in Ecuador, the method of repayment was not money but reduced-cost oil from Ecuador. This has incentivized Ecuador to drive further into the Amazon to find oil to pay the PRC back. At home and abroad, a frequent part of PRC investment in a country is the construction of power plants and grids. Twenty-eight Belt and Road Initiative (BRI) partner countries have expressed plans for nuclear power alone, and that is even smaller than the vast numbers of coal plants the PRC is building abroad. Domestically, the PRC is poised to take a tremendous lead in the development of nuclear technology as they are currently constructing 11 new nuclear power plants and have 18 more in advanced planning.


Domestic Challenges Across the Americas

Meanwhile, the United States finds itself in desperate need of domestic investment. According to a Council on Foreign Relations report on the state of U.S. infrastructure, “...United States infrastructure is both dangerously overstretched and lagging behind that of its economic competitors, particularly [the PRC].” The U.S. energy grid is not exempt to this sorry state, with U.S. energy infrastructure receiving a C- in the most recent report from the American Society of Civil Engineers. Meanwhile, infrastructure in Latin America has been pressed nearly to its limits. A report by McKinsey Global found that infrastructure investment as a percent of GDP was lower in Latin America than anywhere else in the world at 2.4. That report estimates Latin America will have to spend 7 Trillion USD by 2030 to improve its infrastructure networks. Taken together, then, there are indications that there is a chance for a once-in-a-lifetime confluence of policy across the Americas, uniting foreign and domestic policies from Juneau to Tierra del Fuego.


The Nature of America

Finally, an investment in a Pan-American Infrastructure project helps settle matters of nature both the nature of U.S. investment abroad and the actual ecology of the American continents. Regarding the nature of U.S. investment, the legacy of distrust and resentment in Latin America toward the U.S. for its conduct in the region goes back about as long as American involvement in the first place. The manner in which U.S. private and government activities in the region continued long traditions of exploitative and extractive institutions is well-documented, and has been used by both local and foreign actors to rally the region against the U.S. in the name of combating “imperialism.” This meshes well with the PRC’s rhetoric of combating imperialism around the globe, especially that of the United States. Making a concerted effort to make local governments and private enterprises free and equal participants, rather than exclusive tools of U.S. interests, and then making a doubly concerted effort to project the involvement as such would help both salve the legacy of U.S. wrongdoing in the region and defang PRC rhetoric about the nature of U.S. involvement abroad.

Regarding the ecology of Latin America itself, the Americas are some of the most vitally important regions for global biodiversity and ecology. Of the seventeen recognized Megadiverse countries, those that have extremely high rates of biological diversity, especially unique local species of flora and fauna, seven are in the Americas. This includes not only countries renowned for their ecological importance such as Brazil and Ecuador but also both the U.S. and Mexico. In addition, Cuba is renowned for the way in which it has developed sustainable agriculture and managed to preserve much of the local ecology in comparison to many of its Caribbean neighbors. Cuba’s state of affairs is largely driven by its economic struggles and low use of petrochemicals since the collapse of the Soviet Union in 1991.

As such, protecting the hemisphere’s ecology is vitally important in the larger fight against the effects of climate change and ensuring environmental health and stability for future generations. Protecting these environments cannot be separated from the building of low-carbon infrastructure, especially energy infrastructure. In light of the infrastructure needs of Latin America, especially energy infrastructure, the construction of nuclear power across the region is one of the most important steps we can take.


Policy Recommendations

Our primary and overarching recommendation is the development of a pan-American infrastructure initiative, beginning with a focus on nuclear energy infrastructure with the potential to be scaled up into areas such as transportation and communication. Energy is the heart of infrastructure; without power in some form, transportation networks cannot be planned for, communications networks cannot work reliably, food production and distribution faces significant challenges, health and medicine is without many modern innovations critical to positive outcomes, businesses and government cannot reliably provide services, and residencies are subject to ancient pressures of weather, water access, etc. Within this context, however, we have a few recommendations:

  1. Make the program collaborative at every opportunity. Every nation in the Americas has something to bring to the table which will be beneficial for this project. Canada has proportionally vast nuclear expertise, the U.S. is a world leader in scientific expertise and business management, and Latin America has a workforce in its prime and a hunger to equip its people with the knowledge and tools necessary to be competitive on the world stage and possess a vast wealth of resources. Everyone can contribute equally in different ways, everyone can learn, and everyone can share the benefits equally.

  2. Raise a hemispheric gas or carbon tax to help cover the cost. Gas taxes are frequently used around the world to help fund infrastructure projects but are comparatively underutilized in the United States. Similarly, a tax on carbon dioxide and/or methane emissions is repeatedly suggested as a method for both funding low-carbon energy development and encouraging the transition to the same. A gas or carbon tax, or both, would therefore be a natural method to pay for such a project. It would have the added benefits of encouraging countries wishing to do business in the Americas to lower their carbon emissions, making a market of nearly a billion people harder to access without doing so.

  3. Consider a Phase II. Although energy is the key to any further infrastructure development, it is far from the only form of infrastructure needed in the Americas. Once the energy network has been thought out and construction has begun, it would be appropriate to consider a Phase II plan looking at other desperately needed infrastructure investments such as roads, hospitals, etc. With the smaller-scale experience of the energy-focused Phase I, Phase II will benefit from modern energy infrastructure, established pan-American connections, and real-world experience in making projects like this work.

Conclusion

Almost every country in the Americas faces serious infrastructure concerns for the future. For the U.S., this is coupled with increasing competition with the People’s Republic of China, which seeks to overtake the U.S. in both economic and technological importance, as well as concerns about how to mitigate the effect of human activity on the global climate. All of these issues come together at one single point, which the U.S. has a once-in-a-lifetime chance to take advantage of: the U.S. must gather public and private actors across the western hemisphere and create a pan-American infrastructure initiative, beginning with the construction of nuclear energy infrastructure across North and South America.

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