This memo proposes the modernization of the Enhancing Education Through Technology (E2T2) Program as part of the overdue Elementary and Secondary Education Act’s (ESEA) reauthorization. With the expiration of several programs that support technology-enabled teaching and learning—such as the Elementary and Secondary School Emergency Relief (ESSER) fund, Emergency Connectivity Fund (ECF), and the Affordable Connectivity Program (ACP)—and the increasing prevalence of digital tools in educational settings, there is a pressing need for dedicated aid to states and districts. A reimagined E2T2 can address the digital use, design, and access divides identified in the 2024 National Educational Technology Plan (NETP).

Challenge and Opportunity 

The 2024 NETP, the U.S. Department of Education’s (ED) flagship educational technology (edtech) policy document, envisions a future where all students use digital tools actively to learn, all educators have support to design those classroom experiences, and all communities can readily access foundational connectivity, devices, and digital content. The original $1 billion E2T2, established under the No Child Left Behind Act, played a critical role in developing and implementing state and local plans that reflected this vision. For example, SETDA’s 2010 report examining all states’ investments found that the top E2T2 priorities were: 

1. Professional development (top priority in 34 states)
2. Increasing achievement and digital literacy (top priority in 6 states)
3. Increase access to technology (top priority in 4 states)

However, the program lost funding in 2011 and was excluded from the 2015 Every Student Succeeds Act (ESSA). Since then, edtech has been subsumed under broader block grants, such as the Student Support and Academic Enrichment Program (Title IV-A) and Supporting Effective Instruction Program (Title II-A), resulting in a dilution of focus and resources. Furthermore, the end of the current Administration coincides with several challenges: 

• Federal Program Expirations: ED’s ESSER fund, which supported technology-enabled teaching and learning, was fully obligated by September 2024. The Federal Communications Commission’s (FCC) ECF, which provided $7.1 billion to purchase equipment, sunsetted in June 2024. Finally, the FCC’s ACP connected 23 million households to broadband at a discounted rate. Although many ACP recipients used the program to access schoolwork, the FCC exhausted its $14 billion in May 2024. A new program is necessary to sustain the significant gains made through these programs. 
• Unprepared for Emerging Technologies: As innovative tools like generative artificial intelligence (AI) make their way into educational environments, there is an increasing need to support states and districts by offering guidance and professional learning. While half of students aged 14-22 report using generative AI, including for schoolwork, 70% of educators have not yet received training on how to use AI effectively and responsibly. 
• Urgency for Digital Citizenship: Recent actions by the Surgeon General to recommend warning labels on social media, as well as bans on cell phones in schools approved by several states and local school boards, calls for additional capacity at the state and local levels to support digital citizenship education. 
• Educator Attrition: Due to increased pressures faced during the pandemic, educator attrition rates have increased. Although many policy solutions can help counter this issue, research suggests that educators who do not feel supported in their roles are more likely to leave the profession. With the average district now accessing nearly 3,000 different technology tools in a given school year, educators are more likely to feel lost in selecting and deploying the most appropriate options. States and districts require additional capacity to help educators navigate vast quantities of digital tools, thereby bolstering a feeling of professional support. 

Plan of Action

ESSA will be nine years old in December 2024, and the legislation included authorization levels for many programs only up until fiscal year 2020. The 119th Congress has an opportunity to examine the legislation and authorize new programs that respond to current challenges. 

A reimagined E2T2, authorized at a minimum of $1.8 billion, can be provided to states and districts through the ED’s Office of Elementary and Secondary Education (OESE), which has experience in administering large national programs. A 1.5% national activities set-aside, reserved by OESE and the Office of Planning, Evaluation, and Policy Development (OPEPD), can offer means for evaluating the impact of the program, as well as providing technical assistance through convenings and federal guidance on impactful investment strategies.

Similar to the original E2T2, state education agencies should receive their share of funds via Title I formula upon submission of a long-range statewide edtech plan informed through adequate community input (e.g., see the U.S. Department of Commerce’s guidance on soliciting public comments and engaging community organizations). States should be permitted to reserve a maximum of 5% of funds received to carry out various coordination activities, including the establishment of a dedicated edtech office that reports to the chief state school officer and is responsible for governing program implementation. The remainder of the funds should be subgranted through a mix of formula and competitive grants to local educational agencies and consortia of eligible entities (e.g., districts, nonprofits, higher education institutions, community anchor institutions). 

Allowable uses should include activities to close the three digital divides articulated in the 2024 NETP. For example, the reimagined E2T2 can support the current national AI strategy by allowing funds to be invested toward closing the “digital use divide,” providing opportunities for students to build AI literacy skills and use AI tools to examine and solve community problems. Funds could also be used to close the “digital design divide” by providing educators with ongoing professional development and reinforcing their abilities to align instruction with the Universal Design for Learning principles. Finally, funds could be used to close the “digital access divide” by allowing schools to procure accessible technology solutions, support students’ universal broadband access, or establish a state or local cabinet-level edtech director position. 

In 2025, federal policymakers have an opportunity to begin critical discussions around the E2T2 modernization by taking specific action steps:

• The Senate Health, Education, Labor, and Pensions Committee and the House Education and Workforce Committee can introduce steps to reauthorize ESEA, as well as seek input from educators and education leaders on new program considerations. 

• The White House Domestic Policy Council and Office of Management and Budget can advocate for the reimagined E2T2 in the president’s annual budget request.
• The Secretary of Education, alongside ED’s Assistant Secretary for Policy, Evaluation, and Policy Development and Assistant Secretary for Legislation and Congressional Affairs, can engage the public and legislators to build support for the reimagined E2T2.

Conclusion

The reimagined E2T2 represents a critical opportunity to address many pressing challenges in K-12 education while preparing students for the future. As we approach the reauthorization of ESEA, as well as consider policy solutions to fully harness the promises of emerging technologies like AI, providing systems with dedicated support for closing the three digital divides can significantly enhance the quality and equity of education across the United States. 

This memo was developed in partnership with the Alliance for Learning Innovation, a coalition dedicated to advocating for building a better research and development infrastructure in education for the benefit of all students. Read more education R&D memos developed in partnership with ALI here.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

Competent and innovative technologists are crucial to the future of U.S. national security. The National Security Commission on Artificial Intelligence (NSCAI) warns that a digital talent deficit at the Department of Defense (DOD) represents the greatest impediment to the U.S. military’s effective embrace of emerging technologies (such as artificial intelligence). 

A new Digital Military Talent Initiative could help address the military’s digital-talent gap by providing an expedited path to U.S. citizenship through military service for noncitizen technologists aligned to NSCAI archetypes. Modernization of an already-existing DOD program and military enlistment policy updates could infuse digital talent by providing vetted noncitizens a pathway to accelerated naturalization through military service.

Challenge and Opportunity

A paucity of technical talent threatens the U.S. military’s current and future capability goals, as evidenced by the military’s ongoing inability to staff cyber units or achieve objectives set by the Pentagon’s Chief Data Officer. Global competition for technical talent requires the United States to get more creative with recruitment. The former Director of the DOD’s Defense Innovation Unit noted that the Pentagon’s efforts to add science and technology talent to its workforce are “insufficient” given competitors’ gains in these arenas. 

If current efforts are insufficient to meet technical talent needs, future efforts may be worse. Projections suggest the U.S. population is aging, such that fewer working-age persons will be available relative to the broader population in years to come. This trend may have an outsize negative impact on the military’s available talent pool, as the military fills its ranks predominantly with younger workers. Only 12% of the nation’s young adults are qualified and available to enlist, further exacerbating the larger recruiting shortage. Compounding the problem is the fact that military-eligible tech talent is often lost to the higher-paying private sector. Last, lack of lifestyle flexibility may make the military a hard sell, especially for innovative and free-thinking talent.

Even the newest models for bringing private-sector talent into the military, such as the U.S. Digital Corps and cyber direct-hire authorities, only harness talent from existing U.S. citizens. Proposals for training more government technologists (e.g., by creating a federal digital service academy) are limited by the number of citizens who may be willing and able to participate. 

There is a blueprint that may help overcome these challenges. During the Global War on Terror, the U.S. military enlisted over 10,000 noncitizen volunteers through the Military Accessions Vital to the National Interest (MAVNI) program. Under this program, a select group of pre-screened recruits was offered the chance to remain in the U.S. and obtain citizenship in exchange for military service. Notwithstanding an untimely termination that gave rise to a series of lawsuits, MAVNI was widely recognized as a success. It should be noted that over 14,000 individuals expressed interest in the first year that the U.S. Army sought to enlist recruits in the Global War on Terror pursuant to 10 U.S.C. § 504(b)(2)). However, the program was limited in scope. Although many MAVNI participants held advanced degrees, the skillsets the program sought (due to DOD’s self-imposed restrictions) were limited to certain foreign languages and medical specialties. Modernizing and expanding MAVNI with statutory authority commensurate with the realities of modern conflict could help mitigate technology talent shortages in the military.

Modernizing and expanding MAVNI would also align with the NSCAI’s recommendation for a “comprehensive” legislative strategy to enable “highly skilled immigrants to encourage more AI talent to study, work, and remain in the United States.” Our nation’s inadequate strategies for recruiting foreign technical and STEM talent have caused leading companies like Google to appeal for Congressional assistance, even as peer nations like Canada have developed novel, effective policies to support digital immigration. During the Trump administration, Toronto became the fastest-growing location for tech-sector jobs in North America. The upshot is clear: the U.S. military—and the United States generally—faces a widening tech talent gap that requires out-of-the-box thinking to address.

Plan of Action

We propose a two-part plan of action for launching a national Digital Military Talent Initiative. Part One entails minor modifications to existing law governing U.S. military eligibility. Part Two involves modernizing the existing MAVNI program by expanding the definition of skills deemed “vital to the national interest” and evolving recruitment and technology practices to incorporate this new talent. More detail on each of these components is provided below.

Part 1. Amend existing law governing U.S. military eligibility. 

Two paragraphs of 10 U.S.C. § 504(b) should be modified to enable the Department of Defense to access noncitizen technologists. First, 10 U.S.C. § 504(b)(2)—which governs military enlistment of individuals who are neither U.S. citizens, permanent residents, nor citizens of Micronesia, the Marshall Islands, or Palau— should be modified to read:

“Notwithstanding paragraph (1), and subject to paragraph (3), the Secretary concerned may authorize enlistment of a person not described in paragraph (1) if the Secretary determines that such person possesses a critical skill or expertise that is vital to the national interest.”

In other words, 10 U.S.C. § 504(b)(2) should be modified by removing provision (B), which currently requires that an enlistee use their referenced “critical skill or expertise” in their “primary daily duties.” This requirement unnecessarily inhibits military commanders at all levels, since critical skills and expertise often include skills and expertise deployed only in moments of the utmost exigency.

Second, 10 U.S.C. § 504(b)(3) should be modified to read: 

“A Secretary concerned may not authorize more than 10,000 enlistments under paragraph (2) per military department in a calendar year until after the Secretary of Defense submits to Congress written notice of the intent of that Secretary concerned to authorize more than 10,000 such enlistments in a calendar year.” 

This language increases the enlistment number at which the Secretary of Defense is statutorily obligated to notify Congress and does away with the 30-day waiting period that the Secretary must wait between notifying Congress and proceeding with the enlistment authorization.

These modifications are needed to accommodate anticipated recruitment under an expanded MAVNI and help the Secretary to move quickly on leveraging such a talent pool. Congressional changes can be slow and difficult to change; however, without these changes, the MAVNI program will continue to be constrained when bringing noncitizen tech talent into the military.

Part 2. Modernize the DOD’s existing MAVNI program by authorizing enlistment for certain vetted noncitizens with critical digital competencies.

The MAVNI program authorizes certain noncitizens to enlist if they possess critical skills limited to certain foreign languages and medical specialties. As the demands of modern conflict have adjusted at the speed of technological advancement, so too should the way the U.S. staffs its military. The DOD should expand the MAVNI program to include skills aligned to the NSCAI’s digital-talent archetypes, the 2021 Executive Order 14028 on improving the nation’s cybersecurity, FY2022 National Defense Authorization Act, and the 2023 Executive Order 14110 on the development and use of artificial intelligence. The DOD should also consider the following recommendations to modernize the existing MAVNI program. 

MAVNI Program Setup:

• Determine talent needs of military service-software factories, as well as tactical-level units and enterprise programs pursuing technology transformations.
• Source and prioritize needs related to specific problem statements and technology applications that can be developed with minimal risk and have potential for significant impact. 
• Educate internal stakeholders on leveraging noncitizen technologists capable of developing and shipping code in zero trust environments.
• Evolve and scale MAVNI program infrastructure in alignment with DOD zero trust principles and architecture requirements.
• Develop professional-development and career pathways that incentivize recruited technical talent to remain engaged in their military careers. 
• Gather and implement feedback from program alumni and participants on topics including recruitment, retention, training, incentives, and community-building.

Recruitment Process:

• Define enlistment pathways for recruited technical talent. For instance, a recruit might first enter into a non-classified military occupational specialty—whether a unique specialty for uncleared technical talent or a traditional specialty. After receiving a clearance naturalization, the recruit could a) shift to an existing enlisted role in information technology/networking, cyber, and electronic warfare, b) enter a potentially new technology-specialty role, or c) commission as a warrant or officer. 
• Understand military recruiter pain points and concerns specific to MAVNI and technical talent identification to ensure appropriate talent screening, talking points, and incentivization for both the recruiter and potential service member.
• MAVNI participants enlisting in the military are encouraged to join any of the Regular or Reserve components.
• Naturalization should occur prior to MAVNI participants reporting to initial active duty training to avoid creating any U.S. visa complications.

Conclusion

The DOD’s current technology talent deficiencies may evolve into an existential vulnerability without significant course correction, while our competitors increase investments in both R&D and STEM education. The DOD can begin addressing these deficiencies through an integrated Technical Military Talent Initiative. Such an initiative should comprise two parts: (1) amending existing law governing enlistment eligibility and (2) modernizing the existing MAVNI program to recruit talent for the military in alignment with STEM skills “vital to the national interest.”  Together, these actions will dramatically grow the U.S. military’s eligible technology talent pool, thus enabling it to better compete in future sub-threshold and armed conflict.

This idea was originally published on February 9, 2022; we’ve re-published this updated version on November 13, 2024. The views expressed are those of the authors. The analysis presented stems from the authors’ academic research of publicly available sources, not from protected operational information. All errors and omissions are those of the authors.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

The United States should continue to pursue its commitment to reduce greenhouse gas emissions by 50–52% from 2005 levels by 2030 and achieve net-zero emissions by 2050. To reach these goals, the United States must rapidly increase renewable-energy production while simultaneously building the transmission capacity needed to carry power generated from new renewable sources. Such an investment requires transforming the American electricity grid at a never-before-seen speed and scale. For example, the 2024 DOE National Transmission Planning study estimates that the American transmission system will need to grow between 2.4 – 3.5 times its 2020 size by 2050 to achieve a 90% greenhouse gas emissions reduction from a 2005 baseline by 2035 and net-zero emissions in 2050. A promising way to achieve this ambitious transmission target is to create a national High Voltage Direct Current (HVDC) transmission network overlaid atop the existing alternating current (AC) grid. In addition to advancing America’s climate goals, such an effort would spur economic development in rural areas, improve the grid’s energy efficiency, and bolster grid stability and security. This memo proposes several policy options the Department of Energy (DOE) and Congress can pursue to incentivize private-sector efforts to construct a national HVDC transmission network while avoiding permitting issues that have doomed some previous HVDC projects.

Challenge and Opportunity

The current American electricity grid resembles the roadway system before the Eisenhower interstate system. Just as roads extended to most communities by the early 1950s, few areas are unelectrified today. However, the AC power lines that cross the United States today are tangled, congested, and ill-suited to quickly move large amounts of renewable power from energy-producing regions with lower demand (such as the Midwest and Southwest) directly to large population centers with high demand. Since HVDC transmission lines lose less power than AC lines at distances > 300 miles, HVDC technology is the best option to directly connect the renewable generation needed to achieve net-zero emissions by 2050 with consumers. 

There are few HVDC lines in the United States today. Those that do exist are scattered across the country and were not designed to facilitate renewable development. As a result, the United States is a long way from the integrated nationwide HVDC network needed to achieve net-zero emissions. Many recent attempts by the private sector to begin building long-distance HVDC transmission lines between renewable producing regions and consumers—such as Clean Line Energy’s proposal for an aboveground line that would have linked much of the Great Plains to the Southeast—have been unsuccessful due to a host of challenges. These challenges included negotiating leases with thousands of landowners with understandable concerns about how the project could alter their properties, negotiating with many local and state jurisdictions to secure project approval, and maintaining investor confidence throughout the complex and time-consuming permitting and leasing process. 
However, a new generation of private developers has proposed an innovative solution that bypasses these challenges: the construction of an underground nationwide HVDC network alongside existing rail corridors. Unlike aboveground transmission built through a mosaic of property owners’ holdings, this solution requires negotiation with only the seven major American rail companies. This approach also takes advantage of the proximity of these already-disturbed corridors to many areas with high renewable-energy potential (Figure 1), does not add visual pollution to the aboveground landscape, and would weatherproof grid infrastructure against natural disasters.

Figure 1

Areas with high potential for wind and solar generation in the Great Plains and Southwest overlap with existing rail routes. Clockwise from left to right, routes of all seven class 1 railways (Source: Federal Railway Administration), heat map of average annual wind speed 80 meters aboveground (an indicator of the potential for wind energy generation; Source: National Renewable Energy

Importantly, these benefits apply to co-location next to highways or existing transmission lines as well. While this memo focuses on rail co-location, co-location next to other infrastructure should be simultaneously pursued by first removing regulatory barriers as was recently enacted in Minnesota and promoting the efficiencies gained from all forms of infrastructure co-location to relevant stakeholders. 

In addition to the political considerations discussed above, several recent advances in HVDC technology have driven costs low enough to make HVDC installation cost-competitive with installing high voltage alternating current (HVAC) lines (see FAQ for more details). As a result, incentivizing HVDC makes sense from perspectives beyond addressing climate change. The U.S. electric grid must be modernized to address pressing challenges beyond climate, such as the need for improved grid reliability and stability. Because HVDC transmission, unlike AC transmission, can maintain consistent power, voltage, and frequency, constructing a HVDC transmission network is a promising way to support the large-scale incorporation of renewable sources into our nation’s energy mix while simultaneously bolstering grid stability and efficiency, and spurring economic growth in rural areas. 

A nationwide HVDC network would also increase grid stability by connecting the four large interconnections that make up the shared American and Canadian power grid (Figure 2). Currently, the two largest of these interconnections—the Eastern and Western interconnections—manage 700 and 250 GW of electricity respectively. Yet, these interconnections are connected by transfer stations with a capacity of only about 1 GW. A recent study led by NREL modeled the economics of building a nationwide HVDC macrogrid that would tie the Eastern and Western interconnections together. The study concluded that such an investment would have a net benefit-to-cost ratio of 1.36 due to the possible ability for a nationwide HVDC grid to (i) shuttle renewable energy across the country as different power sources begin and end generation capabilities each day, and (ii) respond more nimbly to power outages in regions affected by natural disasters.

Figure 2

The four interconnections comprising the American and Canadian electricity grid: the Western, Eastern, ERCOT (Texas), and Quebec interconnections. Colors within the Eastern interconnection represent the territories of non-profit entities established to promote and enhance grid reliability within the territories shown on the map. These grid-reliability non-profits should not be confused with independent system operators (ISOs). (Source: National Electricity Reliability Council (NERC)).

Many private companies are already starting to realize an upgraded U.S. grid via new co-located HVDC transmission lines. For example, Minneapolis-based Direct Connect, with financial backing from American and international investors, has begun the permitting process for SOO Green, a buried HVDC line along a low-use railway that will link the Iowa countryside to the Chicago area. Direct Connect estimates that the SOO Green HVDC link will spur $1.5 billion of new renewable-energy development, create $2.2 billion of economic output in Iowa and Illinois, and create thousands of construction, operation, and maintenance jobs. Although geographically short, the line is also significant because it will join the Midwest (MISO) and PJM Independent System Operators (ISOs), two of the seven regional bodies that manage much of the United States’ grid. The combined territory of the MISO and PJM ISOs stretches from the wind-rich Great Plains to demand centers like Chicago and the Northeast corridor. Facilitating HVDC transmission in this project will allow renewable power to be efficiently funneled from regions that produce lots of energy to the regions that need it. 

The Champlain Hudson Power Express joining NY-ISO and the Quebec interconnection is another example demonstrating the promise of buried, co-located HVDC transmission. The project is projected to save New York homes and businesses $17.3 billion over 30 years through wholesale electricity costs by supplying Quebec hydropower to New York City. The line is currently permitted and under construction and when finished will stretch 339 miles underneath Lake Champlain & the Hudson River and underground through New York State to a converter in Astoria, New York City. The terrestrial portions will be built alongside existing railroad and highway right of ways. 

While these two projects and the handful of other buried and  co-located HVDC lines currently in permitting, permitted, or under construction are important projects, far more transmission needs to be built to meet the U.S.’ climate goals.  As a result, scaling underground co-located HVDC rapidly enough to achieve the transmission required for net-zero emissions in 2050 requires federal action to make these types of lines a more attractive proposition. The policy options outlined below would encourage other privately backed HVDC projects with the potential to boost rural economies while advancing climate action.

Plan of Action

The following policy recommendations would accelerate the development of a national HVDC network by stimulating privately funded construction of underground HVDC transmission lines located alongside existing rail corridors. Recommendations one and two are easily actionable rule changes that can be enacted by the Federal Energy Regulatory Commission (FERC) under existing authority. Recommendation three proposes that the DOE Grid Deployment Office should consider rail co-location in its NIETC designation process. Recommendation four is a more ambitious proposal for federal tax credits which would require Congressional action.

Recommendation 1. FERC should issue a new order that requires ISOs to review new renewable generation and new transmission projects on separate tracks to decrease permitting time delays.

New merchant transmission projects (transmission lines developed by private companies and not by rate-regulated utilities) such as SOO Green and the Champlain Hudson Power Express are often reviewed by ISOs in the same interconnection queue as new generation projects. Due to the high volume backlog of new, often speculative, renewable generation project proposals, transmission projects can wait for years before they are reviewed. This then creates a vicious cycle holding back the clean-energy sector: a delayed review of the transmission capabilities required by new renewable-generation projects ultimately chills the market for generation projects as well.

FERC recently reformed its regulations for interconnection requests (FERC Order 2023). FERC’s  expectation is that switching to a first-ready, first-served system, clustering projects together in groups to be approved en masse, and increasing both submission deposits and withdrawal penalties should prevent speculative submissions and reduce approval times. Order 2023’s removal of the reasonable effects standard (i.e. hardening deadlines for transmission providers to complete impact and interconnection studies) as well as allowing multiple generation projects to share interconnections should also reduce wait times. 

FERC Order 2023 is a laudable first step to address interconnection backlogs; however there is a chance that reality may not match FERC’s expectations. Therefore, FERC should continue to improve the regulatory regime in this area by issuing a new order that requires ISOs to review new renewable generation and new transmission projects on separate tracks. Such a rule would greatly decrease the permitting time for co-located HVDC transmission projects. 

Recommendation 2. FERC should encourage ISOs to re-examine older transmission interconnection rules that are appropriate for AC transmission regulation but do not take into account the benefits of HVDC. External capacity rules, which govern the ability to trade power across ISO boundaries, are a specific area in need of action because they can create barriers to building HVDC transmission across ISO boundaries. 

One granular example is described in SOO Green’s complaint to FERC about the PJM ISO (FERC Docket EL21-103).  Under current rules set by the PJM ISO, energy generated outside of the PJM service area can participate in PJM’s energy marketplace only if grid operators can directly dispatch that energy. This rule was established because grid operators cannot otherwise control the free flow of power through cross-ISO AC transmission, but it results in the exclusion of external, non-dispatchable renewable energy resources from PJM’s market.  However, HVDC lines offer the capacity to schedule current flow at pre-agreed upon times, allowing PJM to directly control transmission and negating the need to control energy dispatch. PJM should look for solutions to this issue from ISO New England and NYISO’s external capacity rules, which have enabled them to import external capacity through HVDC lines into their territories. 

FERC should encourage PJM ISO to revise its external capacity rules to enable less burdensome pathways to market participation for external resources connecting through HVDC transmission. PJM can look to ISO New England and NYISO as examples.

Recommendation 3. As the DOE proposes possible National Interest Electric Transmission Corridors (NIETCs), it should pursue co-location with rail, highways, and existing transmission whenever possible.

Previous attempts by Congress to establish greater federal power over transmission siting and permitting have revolved around the DOE’s authority to designate areas as NIETCs. NIETCs are regions that the DOE identifies as particularly prone to grid congestion or transmission-capacity constraints. Creation of NIETCs was authorized by the Federal Power Act (Sec. 216), which also grants FERC the authority to supersede states’ permitting and siting decisions if the rejected transmission project is in a NIETC and meets certain conditions (including benefits to consumers (even those in other states), enhancement of energy independence, or if the project is “consistent with the public interest”). This “backstop” authority was created by the Energy Policy Act of 2005, was recently reformed in 2021’s Infrastructure Investment and Jobs Act, and was further clarified by FERC Order 1977 through the creation of a landowner bill of rights. 

While a laudable attempt to spur transmission investment and respect landowners, the revised authority in its current form is unlikely to lead to the sudden acceleration of transmission siting and permitting necessary to achieve the United States’ climate goals. This is because NIETC designation, as well as any FERC action under Section 216, (i) trigger the development of environmental impact statements under the National Environmental Policy Act (NEPA), and (ii) may still engender strong political opposition by states and landowners whose properties would be part of proposed routes but would not receive any benefits from transmission investments.

The DOE recently released a list of proposed NIETCs, which if designated would be the first corridors in the country.  Some of the NIETCs were designed with co-location in mind, for example the NY – NE ISO link is located alongside roadways and mid-Atlantic routes are co-located with already existing transmission. However, rail co-location was not mentioned, yet the DOE’s proposed NIETCs overlap with the nation’s class 1 railways in many locations, especially in the Southwest and Midwest. In order to speed up the NEPA review process and reduce NIETC opposition, the DOE should i) consider discussing rail co-location in addition to highway and transmission infrastructure during the upcoming public engagement process, and ii) promote the possibility of co-location to transmission developers in all relevant NIETCs after they are officially designated.

Recommendation 4. Create federal tax credits to stimulate domestic manufacturing and construction of HVDC transmission, including HVDC lines along rail corridors.

Congress should create two federal investment tax credits (ITCs) to stimulate a market for American HVDC lines. One tax credit should be directed to American manufacturers of cross-linked polyethylene (XLPE) which serves as the material for the liner in HVDC cables. Since most producers are based in Asia, such an incentive would help ensure a reliable domestic supply of this essential material. The second tax credit should be directed to HVDC line developers who propose new regionally significant transmission projects that join ISOs or the three interconnections together. Since the United States’ grid grew in an ad-hoc, decentralized way, a Congressional tax credit of this type would further build on FERC’s recent order 1920, which requires transmission providers to think more big picture, long-term and strategically by developing a long-term regional transmission plan that covers at least the next 20 years. 

Such a tax credit was recently introduced into Congress. In 2023, Sen. Martin Heinrich (D-NM) proposed a 30% ITC for “regionally significant” transmission projects which was also introduced in a companion bill by Rep. Steven Horsford, (D-Nev). Their Grid Resiliency Tax Credit Act would provide a 10-year credit for projects that begin building before 2033. The bill is currently under discussion by the Senate Finance committee and should be amended to also include a tax credit for XLPE manufacturers. The expiration of parts of the Tax Cuts and Jobs Act in 2025 will focus attention on tax legislation in the next Congress and offer a legislative window for transmission construction and component manufacturing tax credits. In the potentially acrimonious debate about the future of tax policy, transmission tax credits could be a rare point of agreement and an opportunity for both parties to invest in American manufacturing and infrastructure growth.

Conclusion

A significant increase in transmission capacity is needed to meet the United States’ efforts to achieve net-zero emissions by 2050. Creating a nationwide HVDC transmission network would not only greatly aid the United States’ efforts to address climate change, it would also improve grid stability and provide sustained economic development in rural areas. Direct Connect’s SOO Green project and the Champlain Hudson Power Express are examples of innovative solutions to legitimate stakeholder concerns over environmental impacts and individual property rights – concerns that have plagued previous failed efforts to construct long-distance HVDC transmission. The federal government can stimulate private development of HVDC  infrastructure via rule changes to the transmission interconnection process by FERC, promoting rail co-location in the NIETC design and designation process, and by passing new HVDC transmission-specific tax credits.

This idea was originally published on May 5, 2022; we’ve re-published this updated version on November 12, 2024.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

Current hiring processes for political appointees are opaque and problematic; job openings are essentially closed off except to those in the right networks. To democratize hiring, the next administration should develop a public jobs board for non-Senate-confirmed political appointments, which includes a list of open roles and job descriptions. By serving as a one-stop shop for those interested in serving in an administration, an open jobs board would bring more skilled candidates into the administration, diversify the appointee workforce, expedite the hiring process, and improve government transparency.

Challenge and Opportunity

Hiring for federal political appointee positions is a broken process. Even though political appointees steer some of the federal government’s most essential functions, the way these individuals are hired lacks the rigor and transparency expected in most other fields.

Political appointment hiring processes are opaque, favoring privileged candidates already in policy networks. There is currently no standardized hiring mechanism for filling political appointee roles, even though new administrations must fill thousands of lower-level appointee positions. Openings are often shared only through word-of-mouth or internal networks, meaning that many strong candidates with relevant domain expertise may never be aware of available opportunities to work in an administration. Though the Plum Book (an annually updated list of political appointees) exists, it does not list vacancies, meaning outside candidates must still have insider information on who is hiring.

These closed hiring processes are deeply problematic because they lead to a non-diverse pool of applicants. For example, current networking-based processes benefit graduates of elite universities, and similar networking-based employment processes such as employee referral programs tend to benefit White men more than any other demographic group. We have experienced this opaque process firsthand at the Aspen Tech Policy Hub; though we have trained hundreds of science and technology fellows who are interested in serving as appointees, we are unaware of any that obtained political appointment roles by means other than networking.

Appointee positions often do not include formal job descriptions, making it difficult for outside candidates to identify roles that are a good fit. Most political appointee jobs do not include a written, formalized job description—a standard best practice across every other sector. A lack of job descriptions makes it almost impossible for outside candidates utilizing the Plum Book to understand what a position entails or whether it would be a good fit. Candidates that are being recruited typically learn more about position responsibilities through direct conversations with hiring managers, which again favors candidates who have direct connections to the hiring team.

Hiring processes are inefficient for hiring staff. The current approach is not only problematic for candidates; it is also inefficient for hiring staff. Through the current process, PPO or other hiring staff must sift through tens of thousands of resumes submitted through online resume bank submissions (e.g. the Biden administration’s “Join Us” form) that are not tailored to specific jobs. They may also end up directly reaching out to candidates that may not actually be interested in specific positions, or who lack required specialized skills.

Given these challenges, there is significant opportunity to reform the political appointment hiring process to benefit both applications and hiring officials.

Plan of Action

The next administration’s Presidential Personnel Office (PPO) should pilot a public jobs board for Schedule C and non-career Senior Executive Service political appointment positions and expand the job board to all non-Senate-confirmed appointments if the pilot is successful. This public jobs board should eventually provide a list of currently open vacancies, a brief description for each currently open vacancy that includes a job description and job requirements, and a process for applying to that position.

Having a more transparent and open jobs board with job descriptions would have multiple benefits. It would:

• Bring in more diverse applicants and strengthen the appointee workforce by broadening hiring pools; 
• Require hiring managers to write out job descriptions in advance, allowing outside candidates to better understand job opportunities and hiring managers to pinpoint qualifications they are looking for; 
• Expedite the hiring process since hiring managers will now have a list of qualified applicants for each position; and 
• Improve government transparency and accessibility into critical public sector positions.

Additionally, an open jobs board will allow administration officials to collect key data on applicant background and use these data to improve recruitment going forward. For example, an open application process would allow administration officials to collect aggregate data on education credentials, demographics, and work experience, and modify processes to improve diversity as needed. Having an updated, open list of positions will also allow PPO to refer strong candidates to other open roles that may be a fit, as current processes make it difficult for administration officials or hiring managers to know what other open positions exist.

Implementing this jobs board will require two phases: (1) an initial phase where the transition team and PPO modify their current “Join Us” form to list 50-100 key initial hires the administration will need to make; and (2) a secondary phase where it builds a more fulsome jobs board, launched in late 2025, that includes all open roles going forward. 

Phase 1. By early 2025, the transition team (or General Services Administration, in its transition support capacity) should identify 50-100 key Schedule C or non-career Senior Executive service hires they think the PPO will need to fill early in the administration, and launch a revised resume bank to collect applicants for these positions. The transition team should prioritize roles that a) are urgent needs for the new administration, b) require specialized skills not commonly found among campaign and transition staff (for instance technical or scientific knowledge), and c) have no clear candidate already identified. The transition team should then revise the current administration’s “Join Us” form to include this list of 50-100 soon-to-be vacant job roles, as well as provide a 2-3 sentence description of the job responsibilities, and allow outside candidates to explicitly note interest in these positions. This should be a relatively light lift, given the current “Join Us” form is fairly easy to build.

Phase 2. Early in the administration, PPO should build a larger, more comprehensive jobs board that should aim to go live in late 2025 and includes all open Schedule C or non-Senior Executive Service (SES) positions. Upon launch, this jobs board should include open jobs for whom no candidate has been identified, and any new Schedule C and non-SES appointments that are open going forward. As described in further detail in the FAQ section, every job listed should include a brief description of the position responsibilities and qualifications, and additional questions on political affiliation and demographics.

During this second phase, the PPO and the Office of Personnel Management (OPM) should identify and track key metrics to determine whether it should be expanded to cover all non-Senate confirmed appointments. For example, PPO and OPM could compare the diversity of applicants, diversity of hires, number of qualified candidates who applied for a position, time-to-hire, and number of vacant positions pre- and post-implementation of the jobs board. 

If the jobs board improves key metrics, PPO and OPM should expand the jobs board to all non-Senate confirmed appointments. This would include non-Senate confirmed Senior Executive Service appointee positions.

Conclusion

An open jobs board for political appointee positions is necessary to building a stronger and more diverse appointee workforce, and for improving government transparency. An open jobs board will strengthen and diversify the appointee workforce, require hiring managers to specifically write down job responsibilities and qualifications, reduce hiring time, and ultimately result in more successful hires.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

The Inflation Reduction Act and the Infrastructure Innovation and Jobs Act are set to drive $300 billion in energy infrastructure investment by 2030. Without permitting reform, lengthy review processes threaten to make these federal investments one-third less effective at reducing greenhouse gas emissions. That’s why Congress has been grappling with reforming the National Environmental Policy Act (NEPA) for almost two years. Yet, despite the urgency to reform the law, there is a striking lack of available data on how NEPA actually works. Under these conditions, evidence-based policy making is simply impossible. With access to the right data and with thoughtful teaming, the next administration has a golden opportunity to create a roadmap for permitting software that maximizes the impact of federal investments.

Challenge and Opportunity

NEPA is a cornerstone of U.S. environmental law, requiring nearly all federally funded projects—like bridges, wildfire risk-reduction treatments, and wind farms—to undergo an environmental review. Despite its widespread impact, NEPA’s costs and benefits remain poorly understood. Although academics and the Council on Environmental Quality (CEQ) have conducted piecemeal studies using limited data, even the most basic data points, like the average duration of a NEPA analysis, remain elusive. Even the Government Accountability Office (GAO), when tasked with evaluating NEPA’s effectiveness in 2014, was unable to determine how many NEPA reviews are conducted annually, resulting in a report aptly titled “National Environmental Policy Act: Little Information Exists on NEPA Analyses.”

The lack of comprehensive data is not due to a lack of effort or awareness. In 2021, researchers at the University of Arizona launched NEPAccess, an AI-driven program aimed at aggregating publicly available NEPA data. While successful at scraping what data was accessible, the program could not create a comprehensive database because many NEPA documents are either not publicly available or too hard to access, namely Environmental Assessments (EAs) and Categorical Exclusions (CEs). The Pacific Northwest National Laboratory (PNNL) also built a language model to analyze NEPA documents but contained their analysis to the least common but most complex category of environmental reviews, Environmental Impact Statements (EISs).

Fortunately, much of the data needed to populate a more comprehensive NEPA database does exist. Unfortunately, it’s stored in a complex network of incompatible software systems, limiting both public access and interagency collaboration. Each agency responsible for conducting NEPA reviews operates its own unique NEPA software. Even the most advanced NEPA software, SOPA used by the Forest Service and ePlanning used by the Bureau of Land Management, do not automatically publish performance data.

Analyzing NEPA outcomes isn’t just an academic exercise; it’s an essential foundation for reform. Efforts to improve NEPA software have garnered bipartisan support from Congress. CEQ recently published a roadmap outlining important next steps to this end. In the report, CEQ explains that organized data would not only help guide development of better software but also foster broad efficiency in the NEPA process. In fact, CEQ even outlines the project components that would be most helpful to track (including unique ID numbers, level of review, document type, and project type).

Put simply, meshing this complex web of existing softwares into a tracking database would be nearly impossible (not to mention expensive). Luckily, advances in large language models, like the ones used by NEPAccess and PNNL, offer a simpler and more effective solution. With properly formatted files of all NEPA documents in one place, a small team of software engineers could harness PolicyAI’s existing program to build a comprehensive analysis dashboard.

Plan of Action

The greatest obstacles to building an AI-powered tracking dashboard are accessing the NEPA documents themselves and organizing their contents to enable meaningful analysis. Although the administration could address the availability of these documents by compelling agencies to release them, inconsistencies in how they’re written and stored would still pose a challenge. That means building a tracking board will require open, ongoing collaboration between technologists and agencies.

• Assemble a strike team: The administration should form a cross-disciplinary team to facilitate collaboration. This team should include CEQ; the Permitting Council; the agencies responsible for conducting the greatest number of NEPA reviews, including the Forest Service, Bureau of Land Management, and the U.S. Army Corps of Engineers; technologists from 18F; and those behind the PolicyAI tool developed by PNNL. It should also decide where the software development team will be housed, likely either at CEQ or the Permitting Council.
• Establish submission guidelines: When handling exorbitant amounts of data, uniform formatting ensures quick analysis. The strike team should assess how each agency receives and processes NEPA documents and create standardized submission guidelines, including file format and where they should be sent. 
• Mandate data submission: The administration should require all agencies to submit relevant NEPA data annually, adhering to the submission guidelines set by the strike team. This process should be streamlined to minimize the burden on agencies while maximizing the quality and completeness of the data; if possible, the software development team should pull data directly from the agency. Future modernization efforts should include building APIs to automate this process.
• Build the system: Using PolicyAI’s existing framework, the development team should create a language model to feed a publicly available, searchable database and dashboard that tracks vital metadata, including:
  • The project components suggested in CEQ’s E-NEPA report, including unique ID numbers, level of review, document type, and project type
  • Days spent producing an environmental review (if available; this information may need to be pulled from agency case management materials instead)
  • Page count of each environmental review
  • Lead and supporting agencies
  • Project location (latitude/longitude and acres impacted, or GIS information if possible) 
  • Other laws enmeshed in the review, including the Endangered Species Act, the National Historic Preservation Act, and the National Forest Management Act
  • When clearly stated in a NEPA document, cost of producing the review
  • When clearly stated in a NEPA document, staff hours used to produce the review
  • When clearly stated in a NEPA document, jobs and revenue created by the project
  • When clearly stated in a NEPA document, carbon emissions mitigated by the project

Conclusion

The stakes are high. With billions of dollars in federal climate and infrastructure investments on the line, a sluggish and opaque permitting process threatens to undermine national efforts to cut emissions. By embracing cutting-edge technology and prioritizing transparency, the next administration can not only reshape our understanding of the NEPA process but bolster its efficiency too.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

Without market-shaping interventions, federal and state subsidies for energy-efficient products like heat pumps often lead to higher prices, leaving the overall market worse off when rebates end. This is a key challenge that must be addressed as the Department of Energy (DOE) and states implement the Inflation Reduction Act’s Home Electrification and Appliance Rebates (HEAR) program. 

DOE should prioritize the development of evidence-based market-transformation strategies that states can implement with their HEAR funding. The DOE should use its existing allocation of administrative funds to create a central capability to (1) develop market-shaping toolkits and an evidence base on how state programs can improve value for money and achieve market transformation and (2) provide market-shaping program implementation assistance to states.

There are proven market-transformation strategies that can reduce costs and save consumers billions of dollars. DOE can look to the global public health sector for an example of what market-shaping interventions could do for heat pumps and other energy-efficient technologies. In that arena, the Clinton Health Access Initiative (CHAI) has shown how public funding can support market-based transformation, leading to sustainably lower drug and vaccine prices, new types of “all-inclusive” contracts, and improved product quality. Agreements negotiated by CHAI and the Bill and Melinda Gates Foundation have generated over $4 billion in savings for publicly financed health systems and improved healthcare for hundreds of millions of people. 

Similar impact can be achieved in the market for heat pumps if DOE and states can supply information to empower consumers to purchase the most cost-effective products, offer higher rebates for those cost-effective products, and seek supplier discounts for heat pumps eligible for rebates. 

Challenge and Opportunity 

HEAR received $4.5 billion in appropriations from the Inflation Reduction Act and provides consumers with rebates to purchase and install high-efficiency electric appliances. Heat pumps, the primary eligible appliance, present a huge opportunity for lowering overall greenhouse gas emissions from heating and cooling, which makes up over 10% of global emissions. In the continental United States, studies have shown that heat pumps can reduce carbon emissions up to 93% compared to gas furnaces across their lifetime. 

However, direct-to-consumer rebate programs have been shown to enable suppliers to increase prices unless these subsidies are used to reward innovation and reduce cost. If subsidies are dispersed and the program design is not aligned with a market-transformation strategy, the result will be a short-term boost in demand followed by a fall-off in consumer interest as prices increase and the rebates are no longer available. This is a problem because program funding for heat pump rebates will support only ~500,000 projects over the life of the program—but more than 50 million households will need to convert to heat pumps in order to decarbonize the sector.

HEAR aims to address this through Market Transformation Plans, which states are required to submit to DOE within a year after receiving the award. States will then need to obtain DOE approval before implementing them. We see several challenges with the current implementation of HEAR: 

• Need for evidence: There is a lack of evidence and policy agreement on the best approaches for market transformation. The DOE provides a potpourri of areas for action, but no evidence of cost-effectiveness. Thus, there is no rational basis for states to allocate funding across the 10 recommended areas for action. There are no measurable goals for market transformation.  

• Redundancy: It is wasteful and redundant to have every state program allocate administrative expenses to design market-transformation strategies incorporating some or all of the 10 recommended areas for action. There is nothing unique to Georgia, Iowa, or Vermont in creating a tool to better estimate energy savings. A best-in-class software tool developed by DOE or one of the states could be adapted for use in each state. Similarly, if a state develops insights into lower-cost ways to install heat pumps, these insights will be valuable in many other state programs. The best tools should be a public good made known to every state program. 

Despite these challenges, DOE has a clear opportunity to increase the impact of HEAR rebates by providing program design support to states for market-transformation goals. To ensure a competitive market and better value for money, state programs need guidance on how to overcome barriers created by information asymmetry – meaning that HVAC contractors have a much better understanding of the technical and cost/benefit aspects of heat pumps than consumers do. Consumers cannot work with contractors to select a heat pump solution that represents the best value for money if they do not understand the technical performance of products and how operating costs are affected by Seasonal Energy Efficiency Rating, coefficient of performance, and utility rates. If consumers are not well-informed, market outcomes will not be efficient. Currently, consumers do not have easy access to critical information such as the tradeoff in costs between increased Seasonal Energy Efficiency Rating and savings on monthly utility bills. 

Overcoming information asymmetry will also help lower soft costs, which is critical to lowering the cost of heat pumps. Based on studies conducted by New York State, Solar Energy Industries Association and DOE, soft costs run over 60% of project costs in some cases and have increased over the past 10 years.

There is still time to act, as thus far only a few states have received approval to begin issuing rebates and state market-transformation plans are still in the early stages of development.

Plan of Action 

Recommendation 1. Establish a central market transformation team to provide resources and technical assistance to states.

To limit cost and complexity at the state level for designing and staffing market-transformation initiatives, the DOE should set up central resources and capabilities. This could either be done by a dedicated team within the Office of State and Community Energy Programs or through a national lab. Funding would come from the 3% of program funds that DOE is allowed to use for administration and technical assistance. 

This team would:

• Collect, centralize, and publish heat pump equipment and installation cost data to increase transparency and consumer awareness of available options.
• Develop practical toolkits and an evidence base on how to achieve market transformation most cost-effectively.
• Provide market-shaping program design assistance to states to create and implement market transformation programs.

Data collection, analysis, and consistent reporting are at the heart of what this central team could provide states. The DOE data and tools requirements guide already asks states to provide information on the invoice, equipment and materials, and installation costs for each rebate transaction. It is critical that the DOE and state programs coordinate on how to collect and structure this data in order to benefit consumers across all state programs.

A central team could provide resources and technical assistance to State Energy Offices (SEOs) on how to implement market-shaping strategies in a phased approach.

Phase 1. Create greater price transparency and set benchmarks for pricing on the most common products supported by rebates.

The central market-transformation team should provide technical support to states on how to develop benchmarking data on prices available to consumers for the most common product offerings. Consumers should be able to evaluate pricing for heat pumps like they do for major purchases such as cars, travel, or higher education. State programs could facilitate these comparisons by having rebate-eligible contractors and suppliers provide illustrative bids for a set of 5–10 common heat pump installation scenarios, for example, installing a ductless mini-split in a three-bedroom home.

States should also require contractors to provide hourly rates for different types of labor, since installation costs are often ~70% of total project costs. Contractors should only be designated as recommended or preferred service providers (with access to HEAR rebates) if they are willing to share cost data.

In addition, the central market-transformation team could facilitate information-sharing and data aggregation across states to limit confusion and duplication of data. This will increase price transparency and limit the work required at the state level to find price information and integrate with product technical performance data.

Phase 2. Encourage price and service-level competition among suppliers by providing consumers with information on how to judge value for money.

A second area to improve market outcomes is by promoting competition. Price transparency supports this goal, but to achieve market transformation programs need to go further to help consumers understand what products, specific to their circumstances, offer best value for money. 

In the case of a heat pump installation, this means taking account of fuel source, energy prices, house condition, and other factors that drive the overall value-for-money equation when achieving improved energy efficiency. Again, information asymmetry is at play. Many energy-efficiency consultants and HVAC contractors offer to advise on these topics but have an inherent bias to promoting their products and services. There are no easily available public sources of reliable benchmark price/performance data for ducted and ductless heat pumps for homes ranging from 1500 to 2700 square feet, which would cover 75% of the single-family homes in the United States. 

In contrast, the commercial building sector benefits from very detailed cost information published on virtually every type of building material and specialty trade procedure. Data from sources such as RSMeans provides pricing and unit cost information for ductwork, electrical wiring, and mean hourly wage rates for HVAC technicians by region. Builders of newly constructed single-family homes use similar systems to estimate and manage the costs of every aspect of the new construction process. But a homeowner seeking to retrofit a heat pump into an existing structure has none of this information. Since virtually all rebates are likely to be retrofit installations, states and the DOE have a unique interest in making this market more competitive by developing and publishing cost/performance benchmarking data. 

State programs have considerable leverage that can be used to obtain the information needed from suppliers and installers. The central market-transformation team should use that information to create a tool that provides states and consumers with estimates of potential bill savings from installation of heat pumps in different regions and under different utility rates. This information would be very valuable to low- and middle-income (LMI) households, who are to receive most of the funding under HEAR.

Phase 3. Use the rebate program to lower costs and promote best-value products by negotiating product and service-level agreements with suppliers and contractors and awarding a higher level of rebate to installations that represent best value for money.

By subsidizing and consolidating demand, SEOs will have significant bargaining power to achieve fair prices for consumers.

First, by leveraging relationships with public and private sector stakeholders, SEOs can negotiate agreements with best-value contractors, offering guaranteed minimum volumes in return for discounted pricing and/or longer warranty periods for participating consumers. This is especially important for LMI households, who have limited home improvement budgets and experience disproportionately higher energy burdens, which is why there has been limited uptake of heat pumps by LMI households. In return, contractors gain access to a guaranteed number of additional projects that can offset the seasonal nature of the business.

Second, as states design the formulas used to distribute rebates, they should be encouraged to create systems that allocate a higher proportion of rebates to projects quoted at or below the benchmark costs and a smaller proportion or completely eliminate the rebates to projects higher than the benchmark. This will incentivize contractors to offer better value for money, as most projects will not proceed unless they receive a substantial rebate. States should also adopt a similar process as New York and Wisconsin in creating a list of approved contractors that adhere to “reasonable price” thresholds.

Recommendation 2. For future energy rebate programs, Congress and DOE can make market transformation more central to program design. 

In future clean energy legislation, Congress should direct DOE to include the principles recommended above into the design of energy rebate programs, whether implemented by DOE or states. Ideally, that would come with either greater funding for administration and technical assistance or dedicated funding for market-transformation activities in addition to the rebate program funding. 

For future rebate programs, DOE could take market transformation a step further by establishing benchmarking data for “fair and reasonable” prices from the beginning and requiring that, as part of their applications, states must have service-level agreements in place to ensure that only contractors that are at or below ceiling prices are awarded rebates. Establishing this at the federal level will ensure consistency and adoption at the state level.

Conclusion

The DOE should prioritize funding evidence-based market transformation strategies to increase the return on investment for rebate programs. Learning from U.S.-funded programs for global public health, a similar approach can be applied to the markets for energy-efficient appliances that are supported under the HEAR program. Market shaping can tip the balance towards more cost-effective and better-value products and prevent rebates from driving up prices. Successful market shaping will lead to sustained uptake of energy-efficient appliances by households across the country.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

The Technology Modernization Fund (TMF) currently funds multiyear technology projects to help agencies improve their service delivery. However, many agencies abdicate responsibility for project outcomes to vendors, lacking the internal leadership and project development teams necessary to apply a product model approach focused on user needs, starting small, learning what works, and making adjustments as needed. 

To promote better outcomes, TMF could make three key changes to help agencies shift from simply purchasing static software to acquiring ongoing capabilities that can meet their long-term mission needs: (1) provide education and training to help agencies adopt the product model; (2) evaluate investments based on their use of effective product management and development practices; and (3) fund the staff necessary to deliver true modernization capacity. 

Challenge and Opportunity

Technology modernization is a continual process of addressing unmet needs, not a one-time effort with a defined start and end. Too often, when agencies attempt to modernize, they purchase “static” software, treating it like any other commodity, such as computers or cars. But software is fundamentally different. It must continuously evolve to keep up with changing policies, security demands, and customer needs. 

Presently, agencies tend to rely on available procurement, contracting, and project management staff to lead technology projects. However, it is not enough to focus on the art of getting things done (project management); it is also critically important to understand the art of deciding what to do (product management). A product manager is empowered to make real-time decisions on priorities and features, including deciding what not to do, to ensure the final product effectively meets user needs. Without this role, development teams typically march through a vast, undifferentiated, unprioritized list of requirements, which is how information technology (IT) projects result in unwieldy failures. 

By contrast, the product model fosters a continuous cycle of improvement, essential for effective technology modernization. It empowers a small initial team with the right skills to conduct discovery sprints, engage users from the outset and throughout the process, and continuously develop, improve, and deliver value. This approach is ultimately more cost effective, results in continuously updated and effective software, and better meets user needs.

However, transitioning to the product model is challenging. Agencies need more than just infrastructure and tools to support seamless deployment and continuous software updates – they also need the right people and training. A lean team of product managers, user researchers, and service designers who will shape the effort from the outset can have an enormous impact on reducing costs and improving the effectiveness of eventual vendor contracts. Program and agency leaders, who truly understand the policy and operational context, may also require training to serve effectively as “product owners.” In this role, they work closely with experienced product managers to craft and bring to life a compelling product vision. 

These internal capacity investments are not expensive relative to the cost of traditional IT projects in government, but they are currently hard to make. Placing greater emphasis on building internal product management capacity will enable the government to more effectively tackle the root causes that lead to legacy systems becoming problematic in the first place. By developing this capacity, agencies can avoid future costly and ineffective “modernization” efforts.

Plan of Action

The General Services Administration’s Technology Modernization Fund plays a crucial role in helping government agencies transition from outdated legacy systems to modern, secure, and efficient technologies, strengthening the government’s ability to serve the public. However, changes to TMF’s strategy, policy, and practice could incentivize the broader adoption of product model approaches and make its investments more impactful.

The TMF should shift from investments in high-cost, static technologies that will not evolve to meet future needs towards supporting the development of product model capabilities within agencies. This requires a combination of skilled personnel, technology, and user-centered approaches. Success should be measured not just by direct savings in technology but by broader efficiencies, such as improvements in operational effectiveness, reductions in administrative burdens, and enhanced service delivery to users.

While successful investments may result in lower costs, the primary goal should be to deliver greater value by helping agencies better fulfill their missions. Ultimately, these changes will strengthen agency resilience, enabling them to adapt, scale, and respond more effectively to new challenges and conditions.

Recommendation 1. The Technology Modernization Board, responsible for evaluating proposals, should: 

1. Assess future investments based on the applicant’s demonstrated competencies and capacities in product ownership and management, as well as their commitment to developing these capabilities. This includes assessing proposed staffing models to ensure the right teams are in place.
2. Expand assessment criteria for active and completed projects beyond cost savings, to include measurements of improved mission delivery, operational efficiencies, resilience, and adaptability. 

Recommendation 2. The TMF Program Management Office, responsible for stewarding investments from start to finish, should: 

1. Educate and train agencies applying for funds on how to adopt and sustain the product model. 
2. Work with the General Services Administration’s 18F to incorporate TMF project successes and lessons learned into a continuously updated product model playbook for government agencies that includes guidance on the key roles and responsibilities needed to successfully own and manage products in government.
3. Collaborate with the Office of Personnel Management (OPM) to ensure that agencies have efficient and expedited pathways for acquiring the necessary talent, utilizing appropriate assessments to identify and onboard skilled individuals. 

Recommendation 3. Congress should: 

1. Encourage agencies to set up their own working capital funds under the authorities outlined in the TMF legislation. 
2. Explore the barriers to product model funding in the current budgeting and appropriations processes for the federal government as a whole and develop proposals for fitting them to purpose. 
3. Direct OPM to reduce procedural barriers that hinder swift and effective hiring. 

Conclusion 

The TMF should leverage its mandate to shift agencies towards a capabilities-first mindset. Changing how the program educates, funds, and assesses agencies will build internal capacity and deliver continuous improvement. This approach will lead to better outcomes, both in the near and long terms, by empowering agencies to adapt and evolve their capabilities to meet future challenges effectively.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

The United States currently observes a voluntary moratorium on explosive nuclear weapons testing. At the same time, the National Nuclear Security Administration (NNSA) is required by law to maintain the capability to conduct an underground nuclear explosive test at the Nevada National Security Site, if directed to do so by the U.S. president. 

Restarting U.S. nuclear weapons testing could have very negative security implications for the United States unless it was determined to be an absolute technical or security necessity. A restart of U.S. nuclear testing for any reason could open the door for China, Russia, Pakistan, and India to do the same, and make it even harder to condemn North Korea for its testing program. This would have significant security consequences for the United States and global environmental impacts.

The United States conducted over 1,000 nuclear weapons tests before the 1991 testing moratorium took effect. It was able to do so with the world’s most advanced diagnostic and data detection equipment, which enabled the US to conduct advanced computer simulations after the end of testing. Neither Russia or China conducted as many tests, and many fewer of those were able to collect advanced metrics, hampering these countries’ ability to match American simulation capabilities. Enabling Russia and China to resume testing could narrow the technical advantage the United States has held in testing data since the testing moratorium went into effect in 1992. 

Aside from the security loss, nuclear testing would also have long-lasting radiological effects at the test site itself, including radiation contamination in the soil and groundwater, and the chance of venting into the atmosphere. Despite these downsides, a future president has the legal authority—for political or other reasons—to order a resumption of nuclear testing. Ensuring any such decision is more democratic and subject to a broader system of political accountability could be achieved by creating a more integrated approval process, based on scientific or security needs. To this end, Congress should pass legislation requiring the NNSA administrator to certify that an explosive nuclear test is technically necessary to rectify an existing problem or doubt in U.S. nuclear surety before a test can be conducted.

Challenges and Opportunities

The United States is party to the 1963 Limited Test Ban Treaty, which prohibits atmospheric tests, and the Threshold Ban Treaty of 1974, limiting underground tests of more than 150 kilotons of explosive yield. In 1992, the United States also established a legal moratorium on nuclear testing through the Hatfield-Exon-Mitchell Amendment, passed during the George H.W. Bush Administration. After extending this moratorium in 1993, the United States, Russia, and China also signed the Comprehensive Nuclear Test Ban Treaty (CTBT) in 1996, which prohibits nuclear explosions. However, none of the Annex 2 (nuclear armed) states have ratified the CTBT, which prevents it from entering into force. 

Since halting nuclear explosive tests in 1992, the United States has benefited from a comparative advantage over other nuclear-armed states, given its advanced simulation and computing technologies, coupled with extensive data collected from conducting over 1,000 explosive nuclear tests over nearly five decades. The NNSA’s Stockpile Stewardship Program uses computer simulations to combine new scientific research with data from past nuclear explosive tests to assess the reliability, safety, and security of the U.S. stockpile without returning to nuclear explosive testing. Congress has mandated that the NNSA must provide a yearly report to the Nuclear Weapons Council, which reports to the president on the reliability of the nuclear weapons stockpile. The NNSA also maintains the capability to test nuclear weapons at the Nevada Test Site as directed by President Clinton in Presidential Decision Directive 15 (PDD-15). National Security Memorandum 7 requires the NNSA to have the capability to conduct an underground explosive test with limited diagnostics within 36 months, but the NNSA has asserted in their Stockpile Stewardship and Management plan that domestic and international laws and regulations could slow down this timeline. A 2011 report to Congress from the Department of Energy stated that a small test for political reasons could take only 6–10 months.

For the past 27 years, the NNSA administrator and the three directors of the national laboratories have annually certified—following a lengthy assessment process—that “there is no technical reason to conduct nuclear explosive testing.” Now, some figures, including former President Trump’s National Security Advisor, have called for a resumption of U.S. nuclear testing for political reasons. Specifically, testing advocates suggest—despite a lack of technical justification—that a return to testing is necessary in order to maintain the reliability of the U.S. nuclear stockpile and to intimidate China and other adversaries at the bargaining table. 

A 2003 study by Sandia National Laboratories found that conducting an underground nuclear test would cost between $76 million and $84 million in then-year dollars, approximately $132 million to $146 million today. In addition to financial cost, explosive nuclear testing could also be costly to both humans and the environment even if conducted underground. For example, at least 32 underground tests performed at the Nevada Test Site were found to have released considerable quantities of radionuclides into the atmosphere through venting. Underground testing can also lead to contamination of land and groundwater. One of the most significant impacts of nuclear testing in the United States is the disproportionately high rate of thyroid cancer in Nevada and surrounding states due to radioactive contamination of the environment.

In addition to health and environmental concerns, the resumption of nuclear tests in the United States would likely trigger nuclear testing by other states—all of which would have comparatively more to gain and learn from testing. When the CTBT was signed, the United States had already conducted far more nuclear tests than China or Russia with better technology to collect data, including fiber optic cables and supercomputers. A return to nuclear testing would also weaken international norms on nonproliferation and, rather than coerce adversaries into a preferred course of action, likely instigate more aggressive behavior and heightened tensions in response.

Plan of Action

In order to ensure that, if resumed, explosive nuclear testing is done for technical rather than political reasons, Congress should amend existing legislation to implement checks and balances on the president’s ability to order such a resumption. Per section 2530 of title 50 of the United States Code, “No underground test of nuclear weapons may be conducted by the United States after September 30, 1996, unless a foreign state conducts a nuclear test after this date, at which time the prohibition on United States nuclear testing is lifted.” Congress should amend this legislation to stipulate that, prior to any nuclear test being conducted, the NNSA administrator must first certify that the objectives of the test cannot be achieved through simulation and are important enough to warrant an end to the moratorium. A new certification should be required for every individual test, and the amendment should require that the certification be provided in the form of a publicly available, unclassified report to Congress, in addition to a classified report. In the absence of such an amendment, the president should make a Presidential Decision Directive to call for a certification by the NNSA administrator and a public hearing under oath to certify the same results cannot be achieved through scientific simulation in order for a nuclear test to be conducted.

Conclusion

The United States should continue its voluntary moratorium on all types of explosive nuclear weapons tests and implement further checks on the president’s ability to call for a resumption of nuclear testing.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

To help protect U.S. critical infrastructure workers from future pandemics and other biological threats, the next presidential administration should use the federal government’s grantmaking power to ensure ample supplies of high-quality respiratory personal protective equipment (PPE). The administration can take five concrete actions:

1. The Office of Pandemic Preparedness and Response Policy (OPPR) can coordinate requirements for federal agencies and recipients of federal emergency/disaster preparedness funding to maintain access to at least one reusable respirator per critical employee.
2. The Department of Labor’s Occupational Safety and Health Administration (OSHA) can initiate an occupational safety rule on reusable respirator resilience caches.
3. The Department of Health and Human Services’ Administration for Strategic Preparedness and Response (ASPR) can require PPE manufacturers receiving federal funding to demonstrate their robustness to extreme pandemics.
4. ASPR’s Strategic National Stockpile can start stockpiling reusable respirators.
5. The Federal Emergency Management Agency (FEMA) can leverage its public outreach experience to increase “peacetime” adoption of reusable respirators.

These actions would complete the Biden Administration’s existing portfolio of efforts to reduce the likelihood of dangerous PPE shortages in the future, reaffirming executive commitment to protecting vulnerable workers, building a resilient national supply chain, and encouraging innovation.

Challenge and Opportunity

The next pandemic could strike at any time, and our PPE supply chain is not ready. Experts predict that the chance of a severe natural epidemic could perhaps triple in the next few decades, and advances in synthetic biology are increasing the risk of deliberate biological threats. As the world witnessed in 2020, disposable PPE can quickly become scarce in a crisis. Inadequate stockpiles left millions of workers with insufficient access to respiratory protection and often higher death rates than the general public—especially the critical infrastructure workers who operate the supply chains for our food, healthcare, public safety, and other essential goods and services. In future pandemics, which could have a 4% to 11%+ chance of occurring in the next 20 years based on historical extrapolations, PPE shortages could cause unnecessary infections, deaths, and burnout among critical infrastructure workers.

Figure 1. Notional figure from Blueprint Biosecurity’s Next-Gen PPE Blueprint demonstrating the need for stockpiling PPE in advance of future pandemics.

Recognizing the vulnerability of our PPE supply chain to future pandemics, Section 3.3 of the National Biodefense Strategy and Implementation Plan directs the federal government to:

Establish resilient and scalable supply and manufacturing capabilities for PPE in the United States that can: (a) enable a containment response for; and (b) meet U.S. peak projected demand for healthcare and other essential critical infrastructure workers during a nationally or internationally significant biological incident.

At a high level, securing the supply of PPE during crises is already understood as a national priority. However, despite the federal government’s past efforts to invest in domestic PPE manufacturing, production capacity will still take time to ramp up in future scenarios. Our current stockpiles aren’t large enough to bridge that gap. Some illustrative math: there are approximately 50 million essential workers in the United States, but as of 2022 our Strategic National Stockpile only had about 540 million disposable N95 respirators. This is barely enough to last 10 days, assuming each worker only uses one per day. (One per day is even a stretch: extended use and reuse of disposable N95s often leads to air leakage around wearers’ faces.) State- and local-level stockpiles may help, but many states have already started jettisoning their PPE stocks as purchases from 2020 expire and the prudence of paying for storage becomes less visible. PPE shortages may happen again.

Fortunately, there is existing technology that can reduce the likelihood of shortages while also protecting workers better and reducing costs: reusable respirators, like elastomeric half-mask respirators (EHMRs). 

A single EHMR typically costs between $20 and $40. While the up-front cost of an EHMR is higher than the ~$1 cost of a disposable N95, a single EHMR can reliably last a worker for thousands of shifts over the entirety of a pandemic. Compared to disposable N95s, EHMRs are also better at protecting workers from infection, and workers prefer them to disposable N95s in risky environments. EHMR facepieces often have a 10-year shelf life, and filter cartridges typically have the same five-year shelf life of a typical disposable N95. A supply of EHMRs also takes up an estimated 1.5% of the warehouse space of the equivalent supply of disposable N95s.

Figure 2. The relative size of equivalent PPE stockpiles. Source: Blueprint Biosecurity’s Next-Gen PPE Blueprint.

Some previous drawbacks of EHMRs were their lack of filtration for exhaled air and the unclear efficacy of disinfecting them between uses. Both of those problems are on their way to being solved. The newest generation of EHMRs on the market (products like the Dentec Comfort-Air Nx and the ElastoMaskPro) provide filtration on both inhalation and exhalation, and initial results from ongoing studies presented by the National Institute for Occupational Safety and Health (NIOSH) have demonstrated that they can be safely disinfected. (Product links are for illustrative purposes, not endorsement.)

Establishing stable demand for the newest generation of EHMRs could drive additional innovation in product design or material use. This innovation could further reduce worker infection rates by eliminating the need for respirator fit testing, improving comfort and communication, and enabling self-disinfection. It could also increase the number of critical infrastructure workers coverable with a fixed stockpile budget by increasing shelf lives and reducing cost per unit. Making reusable respirators more protective, ergonomic, and storable would improve the number of lives they are able to save in future pandemics while lowering costs. For further information on EHMRs, the National Academies has published studies that explore the benefits of reusable respirators.

The next administration, led by the new OPPR can require critical infrastructure operators that receive federal emergency/disaster preparedness funding to maintain resilience caches of at least one reusable respirator per critical infrastructure worker in their workplaces—enough to protect those workers during future pandemics.

These resilience caches would have two key benefits:

1. Because many U.S. critical infrastructure operators, from healthcare to electricity providers, receive federal emergency preparedness funds, these requirements would bolster our nation’s mission-critical functions against pandemics or other inhalation hazards like wildfire smoke. At the same time, the requirements would be tied to a source of funding that could be used to meet them. 
2. By creating large, sustainable private-sector demand for domestic respirators, these requirements would help substantially grow the domestic industrial base for PPE manufacturing, without relying on future warm-basing payments like those that Congress recently rescinded.

By taking action, the next administration has an opportunity to reduce the future burden on taxpayers and the federal government, help keep workers safe, and increase the robustness of domestic critical infrastructure.

Plan of Action

Recommendation 1. Require federal agencies and recipients of federal emergency/disaster preparedness funding to maintain access to at least one reusable respirator per critical employee.

OPPR can coordinate a process to define the minimum target product profile of reusable respirators that employers must procure. To incentivize continual respirator innovation, OPPR’s process can regularly raise the minimum performance standards of PPE in these resilience caches. These standards could be published alongside regular PPE demand forecasts. As products expire every 5 or 10 years, employers would be required to procure the new, higher standard. 

OPPR can also convene representatives from each agency that administers emergency/disaster preparedness funding programs to critical infrastructure sectors and can align those agencies on language for:

• Requiring funding recipients to maintain access to resilience caches of enough PPE.
• Explicitly including “maintaining access to PPE resilience caches” as an acceptable and encouraged use of funding.

The Cybersecurity and Infrastructure Security Agency (CISA) within the Department of Homeland Security (DHS) can update its definition of essential workers and set guidelines for which employees would need a reusable respirator.

FEMA’s Office of National Continuity Programs can recommend reusable respirator stocks for critical staff at federal departments and agencies, and the Centers for Medicare and Medicaid Services (CMS) can also set a requirement for healthcare facilities as a condition of participation for receiving Medicare reimbursement.

Recommendation 2. Initiate an occupational safety rule on reusable respirator resilience caches.

To cover any critical infrastructure workplaces that are not affected by the requirements in Recommendation 1, OSHA can also require employers to maintain these resilience caches. This provision could be incorporated into a broader rule on pandemic preparedness, as a former OSHA director has suggested.

OSHA should also develop preemptive guidance on the scenarios in which it would likely relax its other rules. In normal times, employers are usually required to implement a full, costly Respiratory Protection Program (RPP) whenever they hand an employee an EHMR. An RPP typically includes complex, time-consuming steps like medical evaluations that may impede PPE access in crises. OSHA already has experience relaxing RPP rules in pandemics, and preemptive guidance on when those rules might be relaxed in the future would help employers better understand possible regulations around using their resilience caches.

Recommendation 3. Require PPE manufacturers receiving federal funding to demonstrate their robustness to extreme pandemics.

The DHS pandemic response plan notes that workplace absenteeism rates during extreme pandemics are projected to be to 40%. 

U.S. PPE manufacturers supported by federal industrial base expansion programs, such as the investments managed by ASPR, should be required to demonstrate that they can remain operational in extreme conditions in order to continue receiving funding. 

To demonstrate their pandemic preparedness, these manufacturers should have:

• An on-site stockpile of enough reusable respirators for the maximum number of workers they might hire during a manufacturing surge.
• A comprehensive pandemic response plan that addresses workplace transmission protection.
• Regular exercises and independent evaluations of their pandemic response plans.

Recommendation 4. Start stockpiling reusable respirators in the Strategic National Stockpile.

Inside ASPR, the Strategic National Stockpile should ensure that the majority of its new PPE purchases are for reusable respirators, not disposable N95s. The stockpile can also encourage further innovation by making advance market commitments for next-generation reusable respirators.

Recommendation 5. Leverage FEMA’s public outreach experience to increase “peacetime” adoption of reusable respirators.

To complement work on growing reusable respirator stockpiles and hardening manufacturing, FEMA can also help familiarize the workforce with these products in advance of a crisis. FEMA can use Ready.gov to encourage the general public to adopt reusable respirators in household emergency preparedness kits. It can also develop partnerships with professional groups like the American Industrial Hygiene Association (AIHA) or the Association for Health Care Resource & Materials Management (AHRMM) to introduce workers to reusable respirators and instruct them in their use cases during both business as usual and crises.

Conclusion

Given the high and growing risk of another pandemic, ensuring that we have an ample supply of highly protective respiratory PPE should be a national priority. With new reusable respirators hitting the market, the momentum around pandemic preparedness after the COVID-19 pandemic, and a clear opportunity to reaffirm prior commitments, the time is ripe for the next administration to make sure our workers are safe the next time a pandemic strikes.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

Ten years after the creation of the U.S. Digital Service (USDS) and 18F (an organization with the General Services Administration that helps other government agencies build, buy, and share technology products), the federal government still struggles to buy, build, and operate technology in a speedy, modern, scalable way. Cybersecurity remains a continuous challenge – in part due to lack of modernization of legacy technology systems. As data fuels the next transformative modernization phase, the federal government has an opportunity to leverage modern practices to leap forward in scaling IT Modernization.

While there have been success stories, like IRS’s direct file tool and electronic passport renewal, most government technology and delivery practices remain antiquated and the replacement process remains too slow. Many obstacles to modernization have been removed in theory, yet in practice Chief Information Officers (CIOs) still struggle to exercise their authority to achieve meaningful results. Additionally, procurement and hiring processes, as well as insufficient modernization budgets, remain barriers.

The DoD failed to modernize its 25-year-old Defense Travel System (DTS) after spending $374 million, while the IRS relies on hundreds of outdated systems, including a key taxpayer data processing system built in the 1960s, with full replacement not expected until 2030. The GAO identified 10 critical systems across various agencies, ranging from 8 to 51 years old, that provide essential services like emergency management, health care, and defense, costing $337 million annually to operate and maintain, many of which use outdated code and unsupported hardware, posing major security and reliability risks. Despite the establishment of the Technology Modernization Fund (TMF) with a $1.23 billion appropriation, most TMF funds have been expended for a small number of programs, many of which did not solve legacy modernization problems. Meanwhile the urgency of modernizing antiquated legacy systems to prevent service breakdowns continues to increase.

This memo proposes a new effort to rapidly scale proven IT modernization strategies across the federal government. The result will be a federal government with the structure and culture in place to buy, build, and deliver technology that meets the needs of Americans today and into the future. 

Challenge and Opportunity 

Government administrations typically arrive with a significant policy agenda and a limited management agenda. The management agenda often receives minimal focus until the policy agenda is firmly underway. As a result, the management agenda is rarely well implemented, if it is implemented at all. It should be noted that there are signs of progress in this area, as the Biden-Harris Administration publishing its management agenda in the first year of the Administration, while the the Trump Administration did not publish its management agenda until the second year of the administration. However, even when the management agenda is published earlier, alignment, accountability and senior White House and departmental  leadership focus on the management agenda is far weaker than for the policy agenda.

Even when a PMA has been published and alignment is achieved amongst all the stakeholders within the EOP, the PMA is simply not a priority for Departmental/Agency leadership and there is little focus on the PMA among Secretaries/Administrators. Each Department/Agency is responsible for a policy agenda and, unless, IT or other management agenda items are core to the delivery of the policy agenda, such as at the VA, departmental political leadership pays little attention to the PMA or related activities such as IT and procurement.

 An administration’s failure to implement a management agenda and improve government operations jeopardizes the success of that administration’s policy agenda, as poor government technology inhibits successful implementation of many policiesThis has been clear during the Biden – Harris administration as departments have struggled to rapidly deliver IT systems to support loan, grant and tax programs, sometimes delaying or slowing the implementation of those programs. 

The federal government as a whole spends about 80% of its IT budget on maintenance of outdated systems—a percentage that is increasing, not declining. Successful innovations in federal technology and service delivery have not scaled, leaving pockets of success throughout the government that are constantly at risk of disappearing with changes in staff or leadership. 

The Obama administration created USDS and 18F/Technology Transformation Services (TTS) to begin addressing the federal government’s technology problems through improved adoption of modern Digital Services. The Trump administration created the Office of American Innovation (OAI) to further advance government technology management. As adoption of AI accelerates, it becomes even more imperative for the federal government to close the technology gap between where we are and where we need to be to provide the government services that the American people deserve. 

The Biden administration has adapted IT modernization efforts to address the pivot to AI innovations by having groups like USDS, 18F/TTS and DoD Software Factories increasingly focus on Data adoption and AI. With the Executive Order on AI and the Consortium Dedicated to AI Safety the Biden-Harris administration is establishing guidelines to adopt and properly govern increasing focus on Data and AI. These are all positive highlights for IT modernization – but there is a need for these efforts to deliver real productivity. Expectations of citizens continue to increase. Services that take months should take weeks, weeks should take days, and days should take hours. This level of improvement can’t be reached across the majority of government services until modernization occurs at scale. While multiple laws designed to enhance CIO authorities and accelerate digital transformation have been passed in recent years, departmental CIOs still do not have the tools to drive change, especially in large, federated departments where CIOs do not have substantial budget authority.

As the evolution of Digital Transformation for the government pivots to data, modernizedAgencies/Department can leap forward, while others are still stuck with antiquated systems and not able to derive value from data yet. For more digitally mature Agencies/Departments, the pivot to data-driven decisions, automation and AI, offer the best chance for a leap in productivity and quality gains. AI will fuel the next opportunity to leap forward by shifting focus from the process of delivering digital services (as they become norms) and more on the data based insights they ingest and create. For the Agencies/Departments “left behind” the value of data driven-decisions, automation and AI – could drive rapid transformation and new tools to deliver legacy system modernization.

The Department of Energy’s “Scaling IT Modernization Playbook” offers key approaches to scale IT modernization by prioritizing  mission outcomes, driving data adoption, coordinating at scale across government, and valuing speed and agility because, “we underrate speed as value”. Government operations have become too complacent with slow processes and modernization; we are increasingly outpaced by faster developing innovations. Essentially, Moore’s Law (posited by Gordon Moore that the number of transistors in an integrated circuit doubles every 18 months while cost increases minimally. Moore’s law has been more generally applied to a variety of advanced technologies) is outpacing successful policy implementation.

As a result, the government and the public continue to struggle with dysfunctional legacy systems that make government services difficult to use under normal circumstances and can be crippling in a crisis. The solution to these problems is to boldly and rapidly scale emerging modernization efforts across the federal government enterprise – embracing leaps forward with the opportunistic shift of data and AI fueled transformation. 

Some departments have delivered notably successful modern systems, such DHS’ Global Entry site and the State Department’s online passport renewal service. While these solutions are clearly less complex than the IRS’ tax processing system, which the IRS has struggled to modernize, they demonstrate that the government can deliver modern digital services under the right conditions. 

Failed policy implementation due to failed technology implementation and modernization will continue until management and leadership practices associated with modern delivery are rapidly adopted at scale across government and efforts and programs are retained between administrations. 

Plan of Action 

Recommendation 1. Prioritize Policy Delivery through the Office of Management and Budget (OMB) and the General Services Administration (GSA) 

First, the Administration should elevate the position of Federal CIO to be a peer to the Deputy Directors at the OMB and move the Federal CIO outside of OMB, while remaining within the Executive Office of the President, to ensure that the Federal CIO and, therefore, IT and Cybersecurity priorities and needs of the departments and agencies have a true seat at the table. The Federal CIO represents positions that are as important as but different from those of the OMB Deputy Directors and the National Security Advisor and, therefore, should be peers to those individuals, just as they are within departments and agencies, where CIOs are required to report to the Secretary or Administrator. Second, Elevate the role of the GSA Administrator to a Cabinet-level position, and formally recognize GSA as the federal government’s “Operations & Implementation” agency. These actions will effectively make the GSA Administrator the federal government’s Chief Operating Officer (COO). Policy, financial oversight, and governance will remain the purview of the OMB. Operations & Implementation will become the responsibility of the GSA, aligning existing GSA authorities of TTS, quality & proven shared services, acquisitions, and asset management with a renewed focus on mission centric government-service delivery. The GSA Administrator will collaborate with the President’s Management Council (PMC), OMB and agency level CIOs to coordinate policy delivery strategy with delivery responsibility, thereby integrating existing modernization and transformation efforts from the GSA Project Management Office (PMO) towards a common mission with prioritization on rapid transformation. 

For the government to improve government services, it needs high-level leaders charged with prioritizing operations and implementation—as a COO does for a commercial organization. Elevating the Federal CIO to an OMB Deputy Director and the GSA Administrator to a Cabinet-level position tasked with overseeing “Operations & Implementation” would ensure that management and implementation best practices go hand in hand with policy development, dramatically reducing the delivery failures that put even strong policy agendas at risk.

Recommendation 2. Guide Government Leaders with the Rapid Agency Transformation Playbook 

Building on the success of the Digital Services Playbook, and influenced by the DOE’s “Scaling IT Modernization Playbook” the Federal CIO should develop a set of “plays” for rapidly scaling technology and service delivery improvements across an entire agency. The Rapid Agency Transformation Playbook will act both as a guide to advise agency leaders in scaling best practices, as well as a standard against which modernization efforts can be assessed. The government wide “plays” will be based on practices that have proven successful in the private and public sectors, and will address concepts such as fostering innovation, rapid transformation, data adoption, modernizing or sunsetting legacy systems, and continually improving work processes infused with AI. Where the Digital Services Playbook has helped successfully innovate practices in pockets of government, the Rapid Agency Transformation Playbook will help scale those successful practices across government as a whole. 

A Rapid Agency Transformation Playbook will provide a living document to guide leadership and management, helping align policy implementation with policy content. The Playbook will also clearly lay out expected practices for Federal employees and contractors who collaborate on policy delivery. 

Recommendation 3. Fuel Rapid Transformation by Creating Rapid Transformation Funds

Congress should create Rapid Transformation Funds (RTF) under the control of each Cabinet-level CIO, as well as the most senior-IT leader in smaller departments and independent agencies. These funds would be placed in a Working Capital Fund (WCF) that is controlled by the cabinet level CIO or the most senior IT leader in smaller departments and independent agencies. These funds must be established through legislation. For those departments that do not currently have a working capital fund under the control of the CIO, the legislation should create that fund, rather than depending on each department or agency to make a legislative request for an IT WCF. 

This structure will give the CIO of each Department/Agency direct control of the funds. All RTFs must be under the control of the most senior IT leader in each organization and the authority to manage these funds must not be delegatable.The TMF puts the funds under the control of GSA’s Office of the Federal Chief Information Officer (OFCIO) and a board that has to juggle priorities among GSA OCIO and the individual Departments and Agencies. Direct control will streamline decision making and fund disbursement. It will help to create a carrot to align with existing Federal Information Technology Acquisition Reform Act (FITARA) (i.e., stick) authorities. In addition, Congress should evaluate how CIO authorities are measured under FITARA to ensure that CIOs have a true seat at the table.

The legislation will provide the CIO the authority to sweep both expiring and canceling funds into the new WCF. Seed funds in the amount of 10% of department/agency budgets will be provided to each department/agency. CIOs will have the discretion to distribute the funds for modernization projects throughout their department or agency and to determine payback model(s) that best suit their organization, including the option to reduce or waive payback for projects, while the overarching model will be cost reimbursement.

The RTF will enhance the CIO’s ability to drive change within their own organization. While Congress has expanded CIO authorities through legislation three different times in recent years, no legislation has redirected funding to CIOs. Most cabinet level CIOs control a single digit percentage of the Department’s IT budget. For example, the Department of Energy CIO directly controls about 5% of DOE’s IT spending. Direct control of a meaningfully sized pool of money that can be allocated to component IT teams by the cabinet level CIO enables that cabinet level CIOs to drive critical priorities including modernization and security. Without funding, CIO authorities amount to unfunded mandates. The RTF will allow the CIO to enhance their authority by directly funding new initiatives. A reevaluation of the metrics associated with CIO authorities would ensure that CIOs have a true seat at the table.

Recommendation 4. Ensure transformation speed through continuity by establishing a Transformation Advisory Board and department/agency management councils. 

First, OMB should establish a Transformation Advisory Board (TAB) within the Executive Office of the President (EOP), composed of senior and well-respected individuals who will be appointed to serve fixed terms not tied to the presidential administration and sponsored by the Federal CIO. The TAB will be chartered to impact management and technology policy across the government and make recommendations to change governance that impedes rapid modernization and transformation of government. Modeled after the Defense Innovation Board, the TAB will focus on entrenching rapid modernization efforts across administrations and on supporting, protecting, and enhancing existing digital-transformation capabilities. Second, each department and agency should be directed to establish a management council composed of leaders of the department/agency’s administrative functions to include at least IT, finance, human resources, and acquisition, under the leadership of the deputy secretary/deputy administrator. In large departments this may require creating a new deputy secretary or undersecretary position to ensure meaningful focus on the priorities, rather than simply holding meaningless council meetings. This council will ensure that collaborative management attention is given to departmental/agency administration and that leadership other than the CIO understand IT challenges and opportunities. 

A Transformation Advisory Board will ensure continuity across administrations and changes in agency leadership to prevent the loss of good practices, enabling successful transformative innovations to take root and grow without breaks and gaps in administration changes. The management council will ensure that modernization is a priority of departmental/agency leadership beyond the CIO.

Ann Dunkin contributed to an earlier version of this memo.

This idea was originally published on November 13, 2020; we’ve re-published this updated version on October 22, 2024.

Over the last 20 years, the cost of college has skyrocketed, with tuition costs far outpacing wage growth. At the same time, many employers complain that they’re unable to find high-quality talent, in part due to an excessive focus on the signaling effect conferred by college degrees. Although the last three administrations have made significant strides towards expanding the number of pathways to high-earning jobs through apprenticeship programs, they remain under-utilized and have significant potential for growth. To maximize the potential of apprenticeship programs, the federal government should develop a cohesive approach to supporting “apprenticeships of the future,” such as those in cyber, healthcare, and advanced manufacturing. These apprenticeships provide high pay and upward mobility, support economic growth, and serve vital national interests. To maximize the benefits provided by an expansion of high-quality apprenticeships, the federal government should articulate degree pathways and credit equivalencies for individuals seeking further education, collaborate with industry associations to create standards for skills acquisition, and develop an innovation fund that supports cutting-edge labor market innovations, including those in apprenticeship programs.

Challenge & Opportunity

While recent student debt cancellation received significant attention, the key underlying driver is the spiraling cost of college: tuition at four-year universities has risen by more than 125% in the last twenty years, far outpacing inflation and leaving students with an average debt load of $28,000 by graduation. To alleviate the strain, policymakers have increasingly recognized the potential of non-degree training, particularly apprenticeships, which mix on-the-job training with targeted academic skills acquisition. Apprenticeships, which typically last between a few months and 2 years, enable an individual in a high school or tertiary education program to work with an employer, earning a wage while developing skills that may lead to a permanent position or enhance future employability. President Obama spent $260 million on apprenticeship training, while the Trump administration spent $1 billion. Thus far, the Biden administration has spent $730 million to expand registered apprenticeships. 

Nevertheless, apprenticeships in America remain vastly underutilized compared to some of our peer economies. In Germany, 1.2 million adults are enrolled in apprenticeship programs across 330 occupations. By contrast, the U.S. has roughly half as many apprentices despite enrolling 6.5 times as many college students as Germany. Moreover, apprentices are overwhelmingly concentrated in roles such as electricians, machinists, plumbers, and other industries historically classified as “skilled trades.” 

American employers have put a significant premium on college degrees. Research from the Harvard Business School highlights the pervasiveness of degree inflation in many middle-skill, well-paying jobs. The figure below shows the “degree gap percentage,” which is the difference between the percentage of job descriptions requiring a college degree and the percentage of job holders holding a college degree.

Historically, employers’ emphasis on degrees has made wide-scale adoption of apprenticeships outside of skilled trades more challenging. However, attitudes towards apprenticeships continue to change as more employers realize their versatility and applicability to a variety of industries. Over the past few years, companies have started to take action. For instance, JP Morgan Chase has provided $15 million since 2018 to create apprenticeship programs in operations, finance, and technology, while Accenture has led the way in developing apprenticeship networks across the U.S. Apprenticeships have clear momentum and strong applicability to critical, strategic jobs, and federal, state, and local officials should capitalize on the opportunity to create a coherent strategy.

Policy Framework For Strategic Jobs

To identify areas of policy synergy, policymakers should consider the following criteria for jobs that should attract government funding and policy support:

1. Essential to economic growth: roles that are frequently employed in high-growth industries, or else required to improve the future general productivity of businesses.
2. Necessary to protect American interests: jobs that have broader implications for American national interests, including economic competitiveness, national security, green energy, and public health.
3. Middle-skill roles that do not require college degrees: while higher educational attainment is generally desirable, it is not a suitable nor affordable option for all individuals, and many roles can or should support workers who have alternative credentials. Simply put, these jobs should provide pathways into the middle class without excessive education debt burdens.
4. High current job shortages: demand for roles far exceeds current labor supply.

Using this framework, there are three  areas in which the U.S. has clear, pressing needs:

1. Tech job shortages in the United States will cost the American economy over $160 billion in revenue, driven by a shortage of over 1.2 million workers.
   1. Cyber attacks alone cost the American economy 1% – 4% of GDP , which can be partially addressed by eliminating the existing talent shortage of 350,000 cyber professionals.
   2. In addition, 50% of the federal tech workforce is over the age of 50 and just 20% is under the age of 40, indicating a large “retirement cliff” in the medium-term horizon.
2. Although the U.S. has had a long-standing need for nurses and medical professionals, the COVID pandemic highlighted their importance and exposed systemic workforce shortages. By 2030, the country will be short over 500,000 nurses.
   1. The country also suffers from a lack of healthcare educators, with nearly 80,000 qualified nursing applicants turned away due to a lack of training capacity.
   2. While many critical healthcare roles (e.g., RNs and NPs) require at least a bachelor’s degree, apprenticeships are a great way to increase the pipeline of lower-level medical staff (e.g., medical assistants, CNAs, LVNs), who can then be upskilled into the RN role or higher.
3. Today, the U.S. has over 600,000 unfilled manufacturing jobs, which may hamper efforts to bring back clean energy and semiconductor manufacturing despite the hundreds of billions invested by the Inflation Reduction Act, CHIPS Act, and Bipartisan Infrastructure Law. Cumulatively, this talent shortage could reduce American GDP by $1 trillion. The gap is most acute in a handful of roles, including assemblers, production supervisor, inspectors, and welders. However, these roles are essential to empowering the advanced manufacturing revolution, and need to be filled in order to maximize American industrial potential.

Policy Recommendations

In order to maximize the potential of apprenticeship programs in key strategic areas, the next administration should focus on coordinating resources, defining standards, and convening key stakeholders, which include employers and higher education providers, including private sector providers who demonstrate strong outcomes. To achieve this, the next administration should focus on the following policies: 

Recommendation 1. The Departments of Labor and Education should jointly lead the creation of a national strategy for increasing apprenticeships and blended work-learn programs in essential roles and industries. In conjunction with other government agencies, they will stand up a “Strategic Apprenticeships” Task Force. This task force will consist primarily of governmental agencies, including the Department of Defense, Department of Treasury, and the Fed, that have clear mandates for improving worker outcomes which are tied directly to national strategic priorities. This task force will cooperate with the Advisory Committee on Apprenticeships (a committee convened by the Department of Labor that consists of labor unions, community colleges, and other institutions) to set short, medium, and long-term priorities, propose funding levels, and develop a coherent apprenticeship and training strategy.

• The Strategic Apprenticeships Task Force should adopt a “whole of government” approach and when appropriate, include other stakeholders such as the Department of Commerce or the Department of Defense. The task force will then work closely with bodies with deep domain expertise on apprenticeships (e.g., the Advisory Committee on Apprenticeships) to ensure that the proposed standards and structures are appropriately designed and implemented. This will culminate in the development of a strategic plan for apprenticeships that is renewed every five years and outlines key roles, skills, technologies, and training pedagogies that merit greater attention.
• Where necessary, the task force should create standards for apprenticeship programs that qualify for federal funding. The Registered Apprenticeship Program provides a repository of federally or state validated apprenticeships. However, occupations in cybersecurity and software development remain highly under-represented compared to roles in “traditional” industries such as manufacturing. The task force should work with industry certifications and associations, such as the ISC(2) and ISSA, to develop skill acquisition standards that will form the backbone of new apprenticeship programs.
• To ensure that students have multiple pathways to acquire additional educational credentials, the federal government should create a set of competency-based standards that equate on-the-job activities with classroom learning, creating clear pathways for students in apprenticeships who want to later receive an associate’s or bachelor’s degree. While this applies to all apprenticeships (and is a defining feature of the very successful Swiss and German systems), creating federal learning standards will improve the appeal of apprenticeship programs in strategic sectors while giving individuals a path to higher credentials in the future. Great strides were made for the cyber workforce, but more can be done in other sectors as well.
• At the state and local levels, elected officials should work with local chambers of commerce, community colleges, universities, and alternative education providers such as coding bootcamps to translate learning standards into apprenticeship opportunities, course credit, and pathways to an associate’s or bachelor’s degree. Where possible, local officials should also engage with nonprofits and other service organizations to provide wrap-around support structures such as career coaching, financial planning, and mental health resources which have been shown to improve persistence and outcomes.

Recommendation 2. Congress should commit federal funds for apprenticeships in cyber, software engineering, healthcare, and advanced trades (“apprenticeships for the future”), which will be allocated by the Department of Labor as prioritized by the Strategic Apprenticeships Task Force. Given the strategic value and existing job shortages for these roles, the Department of Labor should direct at least 50% of funds to roles that (a) provide strong pathways into middle-class jobs and (b) address pressing economic and strategic shortages in our economy:

• Past presidents’ increased funding for apprenticeship programs demonstrates broad bipartisan appeal for apprenticeships. This can be paired with the increasing bipartisan consensus on China, thereby linking job creation in key industries with national security implications (e.g., cybersecurity). The Jumpstart Our Businesses by Supporting Students Act of 2019 and the Bipartisan Workforce Pell Act both call for Pell Grants to be used for certain short-term learning programs. New legislation can go one step further by adding funding for short-term programs in “strategic roles.” 
• Funding policies can take into account other economic and social justice priorities. For instance, the U.S. Department of Labor recently announced $87.5M of funding to expand diversity in registered apprenticeship programs. In addition to expanding the amount of funding targeted at women and individuals of color, the next administration could create funds for former apprentices of color to enter quality 4-year degree programs that continue expanding their earnings potentially (e.g., HBCUs).
• Department of Labor apprenticeship funding should transition away from proposal-style “contests” towards a more consistent and predictable schedule of funding. Currently, the Department of Labor will announce that a pot of money will be made available for competitive proposals and is typically distributed to State Departments of Labor and sometimes to large nonprofits. Going forward, apprenticeship funding, particularly those focused on jobs of the future, should be a consistent budget line item with clear paths towards funding renewal. In addition, the Department of Labor, in conjunction with the Strategic Apprenticeships Task Force, should publish guidelines for roles and skill development as outlined in their strategic plan.

Under the Biden administration, progress has been made on higher education accountability: for example, the Gainful Employment Rule was reinstated, requiring for-profit programs to demonstrate that typical graduates’ debts are less than 8% of their earnings, or 20% of their discretionary income, to maintain access to federal student aid. Moreover, the rule requires more than half of graduates to demonstrate higher earnings than a typical high school graduate.

Nonetheless, more can be done to buttress progress that has been made on higher education, particularly given stronger regulations around ROI. The policies suggested above can roll up into an “Apprenticeships of the Future” initiative jointly managed by the Departments of Labor and Education. By using a coordinated approach to apprenticeships, policymakers can ensure that more attention is paid towards strategically important industries and roles while creating clearer pathways for individuals seeking apprenticeships and for former apprentices looking to gain further skills and training in 4-year degrees and other “alt-ed” training programs. Moreover, the initiative could make diversity and economic advancement for underserved communities a core part of its mission.

This idea was originally published on November 29, 2021; we’ve re-published this updated version on October 21, 2024.

This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.

PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.

Global heat deaths are projected to increase by 370% if direct action is not taken to limit the effects of climate change. The dire implications of rising global temperatures extend across a spectrum of risks, from health crises exacerbated by heat stress, malnutrition, and disease, to economic disparities that disproportionately affect vulnerable communities in the U.S. and in low- and middle-income countries. In light of these challenges, it is imperative to prioritize a coordinated effort at both national and international levels to enhance resilience to extreme heat. This effort must focus on developing and implementing comprehensive strategies to ensure the vulnerable developing countries facing the worst and disproportionate effects of climate change have the proper capacity for adaptation, as wealthier, developed nations mitigate their contributions to climate change. 

To address these challenges, the U.S. Agency for International Development (USAID) should mobilize finance through environmental impact bonds focused on scaling extreme heat adaptation solutions. USAID should build upon the success of the  SERVIR joint initiative and expand it to include a partnership with NIHHIS to co-develop decision support tools for extreme heat. Additionally, the Bureau for Resilience, Environment, and Food Security (REFS) within the USAID should take the lead in tracking and reporting on climate adaptation funding data. This effort will enhance transparency and ensure that adaptation and mitigation efforts are effectively prioritized. By addressing the urgent need for comprehensive adaptation strategies, we can mitigate the impacts of climate change, increase resilience through adaptation, and protect the most vulnerable communities from the increasing threats posed by extreme heat.

Challenge 

Over the past 13 months, temperatures have hit record highs, with much of the world having just experienced their warmest June on record. Berkeley Earth predicts a 95% chance that 2024 will rank as the warmest year in history. Extreme heat drives interconnected impacts across multiple risk areas including: public health; food insecurity; health care system costs; climate migration and the growing transmission of life-threatening diseases.

Thus, as global temperatures continue to rise, resilience to extreme heat becomes a crucial element of climate change adaptation, necessitating a strategic federal response on both domestic and international scales.

Inequitable Economic and Health Impacts 

Despite contributing least to global greenhouse gas emissions, low- and middle-income countries experience four times higher economic losses from excess heat relative to wealthier counterparts. The countries likely to suffer the most are those with the most humidity, i.e. tropical nations in the Global South. Two-thirds of global exposure to extreme heat occurs in urban areas in the Global South, where there are fewer resources to mitigate and adapt. 

The health impacts associated with increased global extreme heat events are severe, with projections of up to 250,000 additional deaths annually between 2030 and 2050 due to heat stress, alongside malnutrition, malaria, and diarrheal diseases. The direct cost to the health sector could reach $4 billion per year, with 80% of the cost being shouldered by Sub-Saharan Africa. On the whole, low-and middle-income countries (LMICs) in the Global South experience a higher portion of adverse health effects from increasing climate variability despite their minimal contributions to global greenhouse emissions, underscoring a clear global inequity challenge. 

This imbalance points to a crucial need for a focus on extreme heat in climate change adaptation efforts and the overall importance of international solidarity in bolstering adaptation capabilities in developing nations. It is more cost-effective to prepare localities for extreme heat now than to deal with the impacts later. However, most communities do not have comprehensive heat resilience strategies or effective early warning systems due to the lack of resources and the necessary data for risk assessment and management — reflected by the fact that only around 16% of global climate financing needs are being met, with far less still flowing to the Global South. Recent analysis from Climate Policy Initiative, an international climate policy research organization, shows that the global adaptation funding gap is widening, as developing countries are projected to require $212 billion per year for climate adaptation through 2030. The needs will only increase without direct policy action.  

Opportunity: The Role of USAID in Climate Adaptation and Resilience

As the primary federal agency responsible for helping partner countries adapt to and build resilience against climate change, USAID announced multiple commitments at COP28 to advance climate adaptation efforts in developing nations. In December 2023, following COP28, Special Presidential Envoy for Climate John Kerry and USAID Administrator Power announced that 31 companies and partners have responded to the President’s Emergency Plan for Adaptation and Resilience (PREPARE) Call to Action and committed $2.3 billion in additional adaptation finance. Per the State Department’s December 2023 Progress Report on President Biden’s Climate Finance Pledge, this funding level puts agencies on track to reach President Biden’s pledge of working with Congress to raise adaptation finance to $3 billion per year by 2024 as part of PREPARE.

USAID’s Bureau for Resilience, Environment, and Food Security (REFS) leads the implementation of PREPARE. USAID’s entire adaptation portfolio was designed to contribute to PREPARE and align with the Action Plan released in September 2022 by the Biden Administration. USAID has further committed to better integrating adaptation in its Climate Strategy for 2022 to 2030 and established a target to support 500 million people’s adaptation efforts.  

This strategy is complemented by USAID’s efforts to spearhead international action on extreme heat at the federal level, with the launch of its Global Sprint of Action on Extreme Heat in March 2024. This program started with the inaugural Global Heat Summit and ran through June 2024, calling on national and local governments, organizations, companies, universities, and youth leaders to take action to help prepare the world for extreme heat, alongside USAID Missions, IFRC and its 191-member National Societies. The executive branch was also advised to utilize the Guidance on Extreme Heat for Federal Agencies Operating Overseas and United States Government Implementing Partners.

On the whole, the USAID approach to climate change adaptation is aimed at predicting, preparing for, and mitigating the impacts of climate change in partner countries. The two main components of USAID’s approach to adaptation include climate risk management and climate information services. Climate risk management involves a “light-touch, staff-led process” for assessing, addressing, and adaptively managing climate risks in non-emergency development funding. The climate information services translate data, statistical analyses, and quantitative outputs into information and knowledge to support decision-making processes. Some climate information services include early warning systems, which are designed to enable governments’ early and effective action. A primary example of a tool for USAID’s climate information services efforts is the SERVIR program, a joint development initiative in partnership with the National Aeronautics and Space Administration (NASA) to provide satellite meteorology information and science to partner countries. ​​

Additionally, as the flagship finance initiative under PREPARE, the State Department and  USAID, in collaboration with the U.S. Development Finance Corporation (DFC), have opened an Adaptation Finance Window under the Climate Finance for Development Accelerator (CFDA), which aims to de-risk the development and scaling of companies and investment vehicles that mobilize private finance for climate adaptation. 

Plan of Action

Recommendation 1: Mobilize private capital through results-based financing such as environmental impact bonds

Results-based financing (RBF) has long been a key component of USAID’s development aid strategy, offering innovative ways to mobilize finance by linking payments to specific outcomes. In recent years, Environmental Impact Bonds (EIBs) have emerged as a promising addition to the RBF toolkit and would greatly benefit as a mechanism for USAID to mobilize and scale novel climate adaptation. Thus, in alignment with the PREPARE plan, USAID should launch an EIB pilot focused on extreme heat through the Climate Finance for Development Accelerator (CFDA), a $250 million initiative designed to mobilize $2.5 billion in public and private climate investments by 2030.  An EIB piloted through the CFDA can help unlock public and private climate financing that focuses on extreme heat adaptation solutions, which are sorely needed. 

With this EIB pilot, the private sector, governments, and philanthropic investors raise the upfront capital and repayment is contingent on the project’s success in meeting predefined goals. By distributing financial risk among stakeholders in the private sector, government, and philanthropy, EIBs encourage investment in pioneering projects that might struggle to attract traditional funding due to their novel or unproven nature. This approach can effectively mobilize the necessary resources to drive climate adaptation solutions. 

This approach can effectively mobilize the necessary resources to drive climate adaptation solutions.

Environmental Impact Bonds structure

Overview of EIB structure, including cash flow (purple and green arrows) and environmental benefits (black arrows). 

Adapted from Environmental Impact Bonds: a common framework and looking ahead

The USAID EIB pilot should focus on scaling projects that facilitate uptake and adoption of affordable and sustainable cooling systems such as solar-reflective roofing and other passive cooling strategies. In Southeast Asia alone, annual heat-related mortality is projected to increase by 295% by 2030. Lack of access to affordable and sustainable cooling mechanisms in the wake of record-shattering heat waves affects public health, food and supply chain, and local economies. An EIB that aims to fund and scale solar-reflective roofing (cool roofs) has the potential to generate high impact for the local population by lowering indoor temperature, reducing energy use for air conditioning, and mitigating the heat island effect in surrounding areas. Indonesia, which is home to 46.5 million people at high risk from a lack of access to cooling, has seen notable success in deploying cool roofs/solar-reflective roofing through the Million Cool Roof Challenge, an initiative of the Clean Cooling Collaborative. The country is now planning to scale production capacity of cool roofs and set up its first testing facility for solar-reflective materials to ensure quality and performance. Given Indonesia’s capacity and readiness, an EIB to scale cool roofs in Indonesia can be a force multiplier to see this cooling mechanism reach millions and spur new manufacturing and installation jobs for the local economy. 

To mainstream EIBs and other innovative financial instruments, it is essential to pilot and explore more EIB projects. Cool roofs are an ideal candidate for scaling through an EIB due to their proven effectiveness as a climate adaptation solution, their numerous co-benefits, and the relative ease with which their environmental impacts can be measured (such as indoor temperature reductions, energy savings, and heat island index improvements). Establishing an EIB can be complex and time-consuming, but the potential rewards make the effort worthwhile if executed effectively. Though not exhaustive, the following steps are crucial to setting up an environmental impact bond:

Analyze ecosystem readiness

Before launching an environmental impact bond, it’s crucial to conduct an analysis to better understand what capacities already exist among the private and public sectors in a given country to implement something like an EIB. Additionally working with local civil society organizations is important to ensure climate adaptation projects and solutions are centered around the local community. 

Determine the financial arrangement, scope, and risk sharing structure 

Determine the financial structure of the bond, including the bond amount, interest rate, and maturity date. Establish a mechanism to manage the funds raised through the bond issuance.

Co-develop standardized, scientifically verified impact metrics and reporting mechanism 

Develop a robust system for measuring and reporting the environmental impact projects; With key stakeholders and partner countries, define key performance indicators (KPIs) to track and report progress.

USAID has already begun to incubate and pilot innovative financing mechanisms in the global health space through development impact bonds. The Utkrisht Impact Bond, for example, is the world’s first maternal and newborn health impact bond, which aims to reach up to 600,000 pregnant women and newborns in Rajasthan, India. Expanding the use case of this financing mechanism in the climate adaptation sector can further leverage private capital to address critical environmental challenges, drive scalable solutions, and enhance the resilience of vulnerable communities to climate impacts.

Recommendation 2: USAID should expand the SERVIR joint initiative to include a partnership with NIHHIS and co-develop decision support tools such as an intersectional vulnerability map. 

Building on the momentum of Administrator Power’s recent announcement at COP28, USAID should expand the SERVIR joint initiative to include a partnership with NOAA, specifically with NIHHIS, the National Integrated Heat Health Information System. NIHHIS is an integrated information system supporting equitable heat resilience, which is an important area that SERVIR should begin to explore. Expanded partnerships could begin with a pilot to map regional extreme heat vulnerability in select Southeast Asian countries. This kind of tool can aid in informing local decision makers about the risks of extreme heat that have many cascading effects on food systems, health, and infrastructure.

Intersectional vulnerabilities related to extreme heat refer to the compounding impacts of various social, economic, and environmental factors on specific groups or individuals. Understanding these intersecting vulnerabilities is crucial for developing effective strategies to address the disproportionate impacts of extreme heat. Some of these intersections include age, income/socioeconomic status, race/ethnicity, gender, and occupation. USAID should partner with NIHHIS to develop an intersectional vulnerability map that can help improve decision-making related to extreme heat. Exploring the intersectionality of extreme heat vulnerabilities is critical to improving local decision-making and helping tailor interventions and policies to where it is most needed. The intersection between extreme heat and health, for example, is an area that is under-analyzed, and work in this area will contribute to expanding the evidence base. 

The pilot can be modeled after the SERVIR-Mekong program, which produced 21 decision support tools throughout the span of the program from 2014-2022. The SERVIR-Mekong program led to the training of more than 1,500 people, the mobilization of $500,000 of investment in climate resilience activities, and the adoption of policies to improve climate resilience in the region. In developing these tools, engaging and co-producing with the local community will be essential. 

Recommendation 3: USAID REFS and the State Department Office of Foreign Assistance should work together to develop a mechanism to consistently track and report climate funding flow. This also requires USAID and the State Department to develop clear guidelines on the U.S. approach to adaptation tracking and determination of adaptation components.

Enhancing analytical and data collection capabilities is vital for crafting effective and informed responses to the challenges posed by extreme heat. To this end, USAID REFS, along with the State Department Office of Foreign Assistance, should co-develop a mechanism to consistently track and report climate funding flow. Currently, both USAID and the State Department do not consistently report funding data on direct and indirect climate adaptation foreign assistance. As the Department of State is required to report on its climate finance contributions annually for the Organisation for Economic Co-operation and Development (OECD) and biennially for the United Nations Framework Convention on Climate Change (UNFCCC), the two agencies should report on adaptation funding at similarly set, regular interval and make this information accessible to the executive branch and the general public. A robust tracking mechanism can better inform and aid agency officials in prioritizing adaptation assistance and ensuring the US fulfills its commitments and pledges to support global adaptation to climate change.

The State Department Office of Foreign Assistance (State F) is responsible for establishing standard program structures, definitions, and performance indicators, along with collecting and reporting allocation data on State and USAID programs. Within the framework of these definitions and beyond, there is a lack of clear definitions in terms of which foreign assistance projects may qualify as climate projects versus development projects and which qualify as both. Many adaptation projects are better understood on a continuum of adaptation and development activities. As such, this tracking mechanism should be standardized via a taxonomy of definitions for adaptation solutions. 

Therefore, State F should create standardized mechanisms for climate-related foreign assistance programs to differentiate and determine the interlinkages between adaptation and mitigation action from the outset in planning, finance, and implementation — and thereby enhance co-benefits. State F relies on the technical expertise of bureaus, such as REFS, and the technical offices within them, to evaluate whether or not operating units have appropriately attributed funding that supports key issues, including indirect climate adaptation. 

Further, announced at COP26, PREPARE is considered the largest U.S. commitment in history to support adaptation to climate change in developing nations. The Biden Administration has committed to using PREPARE to “respond to partner countries’ priorities, strengthen cooperation with other donors, integrate climate risk considerations into multilateral efforts, and strive to mobilize significant private sector capital for adaptation.”  Co-led by USAID and the U.S. Department of State (State Department), the implementation of PREPARE also involves the Treasury, NOAA, and the U.S. International Development Finance Corporation (DFC). Other U.S. agencies, such as USDA, DOE, HHS, DOI, Department of Homeland Security, EPA, FEMA, U.S. Forest Service, Millennium Challenge Corporation, NASA, and U.S. Trade and Development Agency, will respond to the adaptation priorities identified by countries in National Adaptation Plans (NAPs) and nationally determined contributions (NDCs), among others. 

As USAID’s REFS leads the implementation of the PREPARE and hosts USAID’s Chief Climate Officer, this office should be responsible for ensuring the agency’s efforts to effectively track and consistently report climate funding data. The two REFS Centers that should lead the implementation of these efforts include the Center for Climate-Positive Development, which advises USAID leadership and supports the implementation of USAID’s Climate Strategy, and the Center for Resilience, which supports efforts to help reduce recurrent crises — such as climate change-induced extreme weather events — through the promotion of risk management and resilience in the USAID’s strategies and programming. 
In making standardized processes to prioritize and track the flow of adaptation funds, USAID will be able to more effectively determine its progress towards addressing global climate hazards like extreme heat, while enhancing its ability to deliver innovative finance and private capital mechanisms in alignment with PREPARE. Additionally, standardization will enable both the public and private sectors to understand the possible areas of investment and direct their flows for relevant projects.