A long history of green new deals
The idea of a large-scale public investment in mitigating greenhouse gas emissions is not new. The term “green new deal” has been used by many different groups over the years. For example,
- 2003: As far back as 2003 the nonprofit Apollo Alliance sought to make an alliance between environmental and labour groups for a “a new Apollo project” to undertake a $300bn, 10-year effort to accelerate the transition to clean energy.
- 2007: New York Times columnist Thomas Friedman back in 2007,
- 2008: Promoted by UK-based New Economics Foundation in 2008 and by, among others, the European and US Green parties.
- 2015: The Climate Mobilization, US
- 2018, the US thinktank Data for Progress published a detailed policy report on what such a programme might entail, including a commitment to 100% clean electricity by 2035 and net-zero emissions from all US energy consumption by 2050.
The common theme is a large-scale investment of public resources for rapid decarbonisation, modelled after the emergency measures taken in the 1930s by US president Franklin Roosevelt during the Great Depression. Wikipedia:
Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth… I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.
The New Deal consisted of a series of programs, public work projects, financial reforms and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1936. It responded to needs for relief, reform and recovery from the Great Depression. Major federal programs included the Civilian Conservation Corps (CCC), the Civil Works Administration (CWA), the Farm Security Administration (FSA), the National Industrial Recovery Act of 1933 (NIRA) and the Social Security Administration (SSA). They provided support for farmers, the unemployed, youth and the elderly. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. New Deal programs included both laws passed by Congress as well as presidential executive orders during the first term of the presidency of Franklin D. Roosevelt. The programs focused on what historians refer to as the “3 Rs”: relief for the unemployed and poor, recovery of the economy back to normal levels and reform of the financial system to prevent a repeat depression. The New Deal produced a political realignment, making the Democratic Party the majority (as well as the party that held the White House for seven out of the nine presidential terms (until Republicans began selling tax cuts, deficit spending during their own terms and budget balancing during Democratic ones).
First New Deal (1933–1934)
The New Deal policies drew from many different ideas proposed earlier in the 20th century. Assistant Attorney General Thurman Arnold led efforts that hearkened back to an anti-monopoly tradition rooted in American politics by figures such as Andrew Jackson and Thomas Jefferson. Supreme Court Justice Louis Brandeis, an influential adviser to many New Dealers, argued that “bigness” (referring, presumably, to corporations) was a negative economic force, producing waste and inefficiency.
A major result of the full employment at high wages was a sharp, long lasting decrease in the level of income inequality (Great Compression). The gap between rich and poor narrowed dramatically in the area of nutrition because food rationing and price controls provided a reasonably priced diet to everyone. White collar workers did not typically receive overtime and therefore the gap between white collar and blue collar income narrowed. Large families that had been poor during the 1930s had four or more wage earners and these families shot to the top one-third income bracket. Overtime provided large paychecks in war industries and average living standards rose steadily, with real wages rising by 44% in the four years of war, while the percentage of families with an annual income of less than $2,000 fell from 75% to 25% of the population.
In 1941, 40% of all American families lived on less than the $1,500 per year defined as necessary by the Works Progress Administration for a modest standard of living. The median income stood at $2,000 a year, while 8 million workers earned below the legal minimum. From 1939 to 1944, wages and salaries more than doubled, with overtime pay and the expansion of jobs leading to a 70% rise in average weekly earnings during the course of the war. Membership in organized labor increased by 50% between 1941 and 1945 and because the War Labor Board sought labor-management peace, new workers were encouraged to participate in the existing labor organizations, thereby receiving all the benefits of union membership such as improved working conditions, better fringe benefits and higher wages. As noted by William H. Chafe, “with full employment, higher wages and social welfare benefits provided under government regulations, American workers experienced a level of well-being that, for many, had never occurred before”.
As a result of the new prosperity, consumer expenditures rose by nearly 50%, from $61.7 billion at the start of the war to $98.5 billion by 1944. Individual savings accounts climbed almost sevenfold during the course of the war. The share of total income held by the top 5% of wage earners fell from 22% to 17% while the bottom 40% increased their share of the economic pie. In addition, during the course of the war the proportion of the American population earning less than $3,000 (in 1968 dollars) fell by half.
Roosevelt appointed an unprecedented number of blacks to second-level positions in his administration—these appointees were collectively called the Black Cabinet. The WPA, NYA and CCC relief programs allocated 10% of their budgets to blacks (who comprised about 10% of the total population, and 20% of the poor). They operated separate all-black units with the same pay and conditions as white units.Some leading white New Dealers, especially Eleanor Roosevelt, Harold Ickes and Aubrey Williams, worked to ensure blacks received at least 10% of welfare assistance payments. However, these benefits were small in comparison to the economic and political advantages that whites received. Most unions excluded blacks from joining and enforcement of anti-discrimination laws in the South was virtually impossible, especially since most blacks worked in hospitality and agricultural sectors.
The New Deal programs put millions of Americans immediately back to work or at least helped them to survive. The programs were not specifically targeted to alleviate the much higher unemployment rate of blacks. Some aspects of the programs were even unfavorable to blacks. The Agricultural Adjustment Acts for example helped farmers which were predominantly white, but reduced the need of farmers to hire tenant farmers or sharecroppers which were predominantly black. While the AAA stipulated that a farmer had to share the payments with those who worked the land this policy was never enforced. The Farm Service Agency (FSA), a government relief agency for tenant farmers, created in 1937, made efforts to empower African Americans by appointing them to agency committees in the South. Senator James F. Byrnes of South Carolina raised opposition to the appointments because he stood for white farmers who were threatened by an agency that could organize and empower tenant farmers. Initially, the FSA stood behind their appointments, but after feeling national pressure FSA was forced to release the African Americans of their positions. The goals of the FSA were notoriously liberal and not cohesive with the southern voting elite. Some New Deal measures inadvertently discriminated against harmed blacks. Thousands of blacks were thrown out of work and replaced by whites on jobs where they were paid less than the NRA’s wage minimums because some white employers considered the NRA’s minimum wage “too much money for Negroes”. By August 1933, blacks called the NRA the “Negro Removal Act”. An NRA study found that the NIRA put 500,000 African Americans out of work.
However, since blacks felt the sting of the depression’s wrath even more severely than whites they welcomed any help. New Deal policies helped establish a political alliance between blacks and the Democratic Party that survives into the 21st century.
There was no attempt whatsoever to end segregation, or to increase black rights in the South, and a number of leaders that promoted the New Deal were racist and anti semites.
The wartime Fair Employment Practices Commission (FEPC) executive orders that forbade job discrimination against African Americans, women and ethnic groups was a major breakthrough that brought better jobs and pay to millions of minority Americans. Historians usually treat FEPC as part of the war effort and not part of the New Deal itself.
The New Deal was racially segregated as blacks and whites rarely worked alongside each other in New Deal programs. The largest relief program by far was the WPA—it operated segregated units, as did its youth affiliate the NYA. Blacks were hired by the WPA as supervisors in the North, but of 10,000 WPA supervisors in the South only 11 were black. Historian Anthony Badger argues that “New Deal programs in the South routinely discriminated against blacks and perpetuated segregation”. In its first few weeks of operation, CCC camps in the North were integrated. By July 1935, practically all the camps in the United States were segregated, and blacks were strictly limited in the supervisory roles they were assigned. Kinker and Smith argue that “even the most prominent racial liberals in the New Deal did not dare to criticize Jim Crow”.
Secretary of the Interior Harold Ickes was one of the Roosevelt Administration’s most prominent supporters of blacks and former president of the Chicago chapter of the NAACP. In 1937, when Senator Josiah Bailey Democrat of North Carolina accused him of trying to break down segregation laws Ickes wrote him to deny that:
- I think it is up to the states to work out their social problems if possible, and while I have always been interested in seeing that the Negro has a square deal, I have never dissipated my strength against the particular stone wall of segregation. I believe that wall will crumble when the Negro has brought himself to a high educational and economic status…. Moreover, while there are no segregation laws in the North, there is segregation in fact and we might as well recognize this.
The New Deal’s record came under attack by New Left historians in the 1960s for its pusillanimity in not attacking capitalism more vigorously, nor helping blacks achieve equality. The critics emphasize the absence of a philosophy of reform to explain the failure of New Dealers to attack fundamental social problems. They demonstrate the New Deal’s commitment to save capitalism and its refusal to strip away private property. They detect a remoteness from the people and indifference to participatory democracy and call instead for more emphasis on conflict and exploitation.
The Social Security program was designed to help retired workers and widows but did not include domestic workers, farmers or farm laborers, the jobs most often held by blacks. However, Social Security was not a relief program and it was not designed for short-term needs, as very few people received benefits before 1942.
Women and the New Deal
At first, the New Deal created programs primarily for men as it was assumed that the husband was the “breadwinner” (the provider) and if they had jobs the whole family would benefit. It was the social norm for women to give up jobs when they married—in many states, there were laws that prevented both husband and wife holding regular jobs with the government. So too in the relief world, it was rare for both husband and wife to have a relief job on FERA or the WPA. This prevailing social norm of the breadwinner failed to take into account the numerous households headed by women, but it soon became clear that the government needed to help women as well.
Many women were employed on FERA projects run by the states with federal funds. The first New Deal program to directly assist women was the Works Progress Administration (WPA), begun in 1935. It hired single women, widows, or women with disabled or absent husbands. The WPA employed about 500,000 women and they were assigned mostly to unskilled jobs. 295,000 worked on sewing projects that made 300 million items of clothing and bedding to be given away to families on relief and to hospitals and orphanages. Women also were hired for the WPA’s school lunch program. Both men and women were hired for the small but highly publicized arts programs (such as music, theater, and writing).
The New Deal expanded the role of the federal government, particularly to help the poor, the unemployed, youth, the elderly and stranded rural communities. The Hoover administration started the system of funding state relief programs, whereby the states hired people on relief. With the CCC in 1933 and the WPA in 1935, the federal government now became involved in directly hiring people on relief in granting direct relief or benefits. Total federal, state and local spending on relief rose from 3.9% of GNP in 1929 to 6.4% in 1932 and 9.7% in 1934—the return of prosperity in 1944 lowered the rate to 4.1%. In 1935–1940, welfare spending accounted for 49% of the federal, state and local government budgets. In his memoirs, Milton Friedman said that the New Deal relief programs were an appropriate response. He and his wife were not on relief, but they were employed by the WPA as statisticians. Friedman said that programs like the CCC and WPA were justified as temporary responses to an emergency. Friedman said that Roosevelt deserved considerable credit for relieving immediate distress and restoring confidence.
In a survey of economic historians conducted by Robert Whaples, Professor of Economics at Wake Forest University, anonymous questionnaires were sent to members of the Economic History Association. Members were asked to disagree, agree, or agree with provisos with the statement that read: “Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression”. While only 6% of economic historians who worked in the history department of their universities agreed with the statement, 27% of those that work in the economics department agreed. Almost an identical percent of the two groups (21% and 22%) agreed with the statement “with provisos” (a conditional stipulation) while 74% of those who worked in the history department and 51% in the economic department disagreed with the statement outright.
Economic growth and unemployment (1933–1941)
From 1933 to 1941, the economy expanded at an average rate of 7.7% per year. Despite high economic growth, unemployment rates fell slowly.
Charges of conservatism
[Some] will try to give you new and strange names for what we are doing. Sometimes they will call it ‘Fascism’, sometimes ‘Communism’, sometimes ‘Regimentation’, sometimes ‘Socialism’. But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical…. Plausible self-seekers and theoretical die-hards will tell you of the loss of individual liberty. Answer this question out of the facts of your own life. Have you lost any of your rights or liberty or constitutional freedom of action and choice?
Preliminary studies on the origins of the fascist dictatorships and the American (reformed) democracy came to the conclusion that the most important cause was the growth of state interventionism since in the face of the catastrophic economic situation both societies no longer counted on the power of the market to heal itself.
John Garraty wrote that the National Recovery Administration (NRA) was based on economic experiments in Nazi Germany and Fascist Italy, without establishing a totalitarian dictatorship. Contrary to that, historians such as Hawley have examined the origins of the NRA in detail, showing the main inspiration came from Senators Hugo Black and Robert F. Wagner and from American business leaders such as the Chamber of Commerce. The model for the National Recovery Administration (NRA) was Woodrow Wilson’s War Industries Board, in which Johnson had been involved too.
Historians argue that direct comparisons between Fascism and New Deal are invalid since there is no distinctive form of fascist economic organization. Gerald Feldman wrote that fascism has not contributed anything to economic thought and had no original vision of a new economic order replacing capitalism. His argument correlates with Mason’s that economic factors alone are an insufficient approach to understand fascism and that decisions taken by fascists in power cannot be explained within a logical economic framework. In economic terms, both ideas were within the general tendency of the 1930s to intervene in the free market capitalist economy, at the price of its laissez-faire character, “to protect the capitalist structure endangered by endogenous crises tendencies and processes of impaired self-regulation”.
Stanley Payne, a historian of fascism, examined possible fascist influences in the United States by looking at the KKK and its offshoots and movements led by Father Coughlin and Huey Long. He concluded that “the various populist, nativist, and rightist movements in the United States during the 1920s and 1930s fell distinctly short of fascism”. According to Kevin Passmore, lecturer in History at Cardiff University, the failure of fascism in the United States was due to the social policies of the New Deal that channelled anti-establishment populism into the left rather than the extreme right.
The New Deal was generally held in very high regard in scholarship and textbooks. That changed in the 1960s when New Left historians began a revisionist critique calling the New Deal a bandaid for a patient that needed radical surgery to reform capitalism, put private property in its place and lift up workers, women and minorities. The New Left believed in participatory democracy and therefore rejected the autocratic machine politics typical of the big city Democratic organizations.
In a 1968 essay, Barton J. Bernstein compiled a chronicle of missed opportunities and inadequate responses to problems. The New Deal may have saved capitalism from itself, Bernstein charged, but it had failed to help—and in many cases actually harmed—those groups most in need of assistance. In The New Deal (1967), Paul K. Conkin similarly chastised the government of the 1930s for its weak policies toward marginal farmers, for its failure to institute sufficiently progressive tax reform, and its excessive generosity toward select business interests. In 1966, Howard Zinn criticized the New Deal for working actively to actually preserve the worst evils of capitalism.
In a series of articles, political sociologist Theda Skocpol has emphasized the issue of “state capacity” as an often-crippling constraint. Ambitious reform ideas often failed, she argued, because of the absence of a government bureaucracy with significant strength and expertise to administer them. Other more recent works have stressed the political constraints that the New Deal encountered. Conservative skepticism about the efficacy of government was strong both in Congress and among many citizens. Thus some scholars have stressed that the New Deal was not just a product of its liberal backers, but also a product of the pressures of its conservative opponents.
Communists in government
During the New Deal the communists established a network of a dozen or so members working for the government. They were low level and had a minor influence on policies. Harold Ware led the largest group which worked in the Agriculture Adjustment Administration (AAA). Secretary of Agriculture Wallace got rid of them all in a famous purge in 1935. Ware died in 1935 and some individuals such as Alger Hissmoved to other government jobs. Other communists worked for the National Labor Relations Board, the National Youth Administration, the Works Progress Administration, the Federal Theater Project, the Treasury and the Department of State.
The New Deal had many programs and new agencies, most of which were universally known by their initials. Most were abolished during World War II while others remain in operation today. They included the following:
- National Youth Administration (NYA), 1935: program that focused on providing work and education for Americans between the ages of 16 and 25. Ended in 1943.
- Reconstruction Finance Corporation (RFC): a Hoover agency expanded under Jesse Holman Jones to make large loans to big business. Ended in 1954.
- Federal Emergency Relief Administration (FERA): a Hoover program to create unskilled jobs for relief; expanded by Roosevelt and Harry Hopkins; replaced by WPA in 1935.
- United States bank holiday, 1933: closed all banks until they became certified by federal reviewers.
- Abandonment of gold standard, 1933: gold reserves no longer backed currency; still exists.
- Civilian Conservation Corps (CCC), 1933–1942: employed young men to perform unskilled work in rural areas; under United States Army supervision; separate program for Native Americans.
- Homeowners Loan Corporation (HOLC): helped people keep their homes, the government bought properties from the bank allowing people to pay the government instead of the banks in installments they could afford, keeping people in their homes and banks afloat.
- Tennessee Valley Authority (TVA), 1933: effort to modernize very poor region (most of Tennessee), centered on dams that generated electricity on the Tennessee River; still exists.
- Agricultural Adjustment Act (AAA), 1933: raised farm prices by cutting total farm output of major crops and livestock; replaced by a new AAA because the Supreme Court ruled it unconstitutional.
- National Industrial Recovery Act (NIRA), 1933: industries set up codes to reduce unfair competition, raise wages and prices; ended 1935. The Supreme Court ruled the NIRA unconstitutional.
- Public Works Administration (PWA), 1933: built large public works projects; used private contractors (did not directly hire unemployed). Ended 1938.
- Federal Deposit Insurance Corporation (FDIC): insures bank deposits and supervises state banks; still exists.
- Glass–Steagall Act: regulates investment banking; repealed 1999 (not repealed, only two provisions changed).
- Securities Act of 1933, created the SEC, 1933: codified standards for sale and purchase of stock, required awareness of investments to be accurately disclosed; still exists.
- Civil Works Administration (CWA), 1933–1934: provided temporary jobs to millions of unemployed.
- Indian Reorganization Act, 1934: moved away from assimilation; policy dropped.
- Social Security Act (SSA), 1935: provided financial assistance to: elderly, handicapped, paid for by employee and employer payroll contributions; required 7 years contributions, so first payouts were in 1942; still exists.
- Works Progress Administration (WPA), 1935: a national labor program for more than 2 million unemployed; created useful construction work for unskilled men; also sewing projects for women and arts projects for unemployed artists, musicians and writers; ended 1943.
- National Labor Relations Act (NLRA); Wagner Act, 1935: set up National Labor Relations Board to supervise labor-management relations; In the 1930s, it strongly favored labor unions. Modified by the Taft-Hartley Act (1947); still exists.
- Judicial Reorganization Bill, 1937: gave the President power to appoint a new Supreme Court judge for every judge 70 years or older; failed to pass Congress.
- Federal Crop Insurance Corporation (FCIC), 1938: insures crops and livestock against loss of production or revenue. Was restructured during the creation of the Risk Management Agency in 1996 but continues to exist.
- Surplus Commodities Program (1936): gives away food to poor; still exists as the Supplemental Nutrition Assistance Program.
- Fair Labor Standards Act 1938: established a maximum normal work week of 44 hours and a minimum wage of 40 cents/hour and outlawed most forms of child labor; still exists, hours have been lowered to 40 hours over the years.
- Rural Electrification Administration (REA): one of the federal executive departments of the United States government charged with providing public utilities (electricity, telephone, water, sewer) to rural areas in the U.S. via public-private partnerships. still exists.
- Resettlement Administration (RA): resettled poor tenant farmers; replaced by Farm Security Administration in 1935.
- Farm Security Administration (FSA): helped poor farmers by a variety of economic and educational programs; some programs still exists as part of the Farmers Home Administration.
Pushing the Democratic party platform
The recent 2018 midterm elections in the US saw a new group of Democratic representatives elected to take office for whom climate change is a major issue. Representative-elect Alexandria Ocasio-Cortez of New York, a rising star of the progressive wing of the Democratic Party, has brought the idea of a green new deal to the fore in recent weeks, proposing the creation of a select committee of 15 representatives in the House to hammer out the details.
At the same time, the youth-driven Sunrise Movement has ramped up pressure on Democrats to commit to an ambitious climate action, staging a number of protests in support of a green new deal, including one last month joined by Ocasio-Cortez outside of minority leader Nancy Pelosi’s office.
Sunrise Movement @sunrisemvmt
They offer us a death sentence. We demand a #GreenNewDeal. https://actionnetwork.org/petitions/pelosi-and-dem-leadership-we-won-you-the-house-now-we-demand-a-real-climate-plan …
“A detailed national, industrial, economic mobilisation plan…for the transition of the US economy to become carbon neutral and to significantly drawdown and capture greenhouse gases from the atmosphere and oceans and to promote economic and environmental justice and equality.”
This would be developed through consultations over the next year with a range of experts, including scientists, lawmakers, labour unions and business leaders. The details of a green new deal would be finalised by 1 January 2020 when, advocates hope, a change in the composition of Congress and the presidency could allow a bill undertaking ambitious climate action to be passed by both houses and not be vetoed by the president.
Ocasio-Cortez’s proposal includes a list of goals for the plan that would, ultimately, be developed by the select committee and achieved “in no longer than 10 years from the start of execution of the plan”. The goals include:
- 100% of national power generation from renewable sources.
- Building a national energy-efficient “smart” grid.
- Upgrading every residential and industrial building for state-of-the-art energy efficiency, comfort and safety.
- Decarbonising manufacturing, agricultural and other industries.
- Decarbonising, repairing and improving transportation and other infrastructure.
- Funding massive investment in the drawdown and capture of greenhouse gases.
- Making “green” technology, industry, expertise, products and services a major export of the US, helping other countries transition to carbon-neutral economies.
- Provide all members of society a job guarantee programme to assure a living wage job.
- Basic income programmes and universal health care.
This initiative reflects a tacit acknowledgement that little meaningful congressional action on climate change will occur as long as Republicans control the Senate and presidency. Rather, the deal’s supporters want to set the stage for rapid action should voters elect “a Democratic administration and Congress in 2020”. It seeks to establish specific actions for rapid and expansive climate mitigation as a core part of the Democratic party platform (manifesto).
Planning a rapid transition
The goals proposed by Ocasio-Cortez reflect many of the proposals in the earlier “Data for Progress” report, though she suggests an even more expedited timeline, namely, fully decarbonising US electricity generation by 2030 rather than 2035. Ocasio-Cortez specifically calls for 100% renewable generation, while the Data for Progress report calls for 100% clean and renewable generation, which allows for the use of nuclear and fossil fuels with carbon capture and storage.
This is an important distinction, as roughly a fifth of current US electricity generation – and the majority of current near zero-carbon electricity – comes from nuclear power. Shutting down all of these power plants along with all fossil-fuel generation over the course of a decade would impose significant additional challenges.
A decade-long transition would also entail the early retirement of a large number of electricity generation assets well before their end of expected life. Depending on the scope of decarbonisation in the transportation sector, it might also entail the early retirement of gas and diesel vehicles. There has been little assessment to-date of the cost of these proposals.
At the same time, however, these goals do reflect the scope and scale of the transition that would likely be required to be consistent with emissions pathways limiting warming to below 1.5C in 2100.
The figure below, from the recent Intergovernmental Panel on Climate Change (IPCC) special report on 1.5C, suggests that scenarios that minimise the amount of late-century negative emissions deployment require global emission reductions of around 60% by 2030 from current levels – and, presumably, even larger emission reductions in developed, high-emitting countries, such as the US.
The figure shows CO2 emissions in four future pathways – P1 through P4 – each of which has some combination of positive emissions from fossil fuels and industry, and negative emissions from afforestation and land use (AFOLU) and bioenergy with carbon capture and storage (BECCS). Pathways with more rapid near-term emission reductions – such as P1 and P2 – minimise the need for a massive-scale deployment of negative emissions later in the century.
For the US to reduce its emissions more than 60% by 2030, it would likely require a near-complete decarbonisation of the power sector, along with additional large reductions in emissions from transportation and industry.
The figure below, produced by Carbon Brief, shows the baseline US greenhouse gas emissions in the absence of any new policies in dark blue – based on estimates published by the Rhodium Group. A pathway consistent with limiting temperatures to below 1.5C without a massive-scale deployment of negative emissions is shown in light blue – and involves a 60% decline in emissions by 2030, reflecting the global trajectory to 1.5C. Finally, a scenario with 100% clean electricity generation by 2030 is shown in yellow – and assumes that emissions in other sectors remain flat.
US greenhouse gas emissions – in million tonnes CO2-equivalent (MtCO2eq) for a baseline no-additional-policy scenario (dark blue), a 100% clean electricity by 2030 scenario (yellow), and a 1.5C-consistent pathway with a 60% decline in emissions by 2030 (light blue). Chart by Carbon Brief using Highcharts.
The 100% clean electricity by 2030 goal in the new green deal would only get the US about halfway to being on a below-1.5C pathway, even if the US only took on a global-average level of ambition. Large reductions would have to come from other sectors of the economy, specifically transportation and residential, commercial, and industrial energy use.
Moving away from markets
The green new deal proposal moves away from a primary reliance on market-based approaches, arguing that “given the magnitude of the current challenge, the tools of regulation and taxation, used in isolation, will not be enough to quickly and smoothly accomplish the transformation”.
The proposal notes that it is possible that “if we [the US] had put in place targeted regulations and progressively increasing carbon and similar taxes several decades ago, the economy could have transformed itself by now”. But, it adds, “we did not do that, and now time has run out”.
It suggests that while there is a role for a carbon price, the main thrust of the transition should be in the form of large-scale public investment.
The proposal also argues that the private sector alone would be unable to leverage the level of resources needed for such a rapid transition. It suggests that the required investment would be enormous, noting that prior calls for $1 trillion over 10 years reflect a “wholly inadequate level of investment”.
These “massive” government investments would be funded by increasing the money supply via the Federal Reserve similar to the quantitative easing programmes undertaken in the wake of the 2008 financial crisis. This would be through new public banks to extend credit and through various taxation tools, such a price on carbon and progressive wealth taxes.
Role for incrementalism?
The new proposal is likely to prove controversial among the wider Democratic caucus, given its scope and price tag. It is unclear at this stage how much support the creation of the select committee will get – though, at the time of publication, 18 of the 235 Democratic representatives had announced their support.
Democrats were already planning on bringing back a different select committee focused on climate change, similar to the Select Committee on Energy Independence and Global Warming which existed from 2007-2010 when Democrats lost control of the House. There is concern that having two separate select committees would be duplicative and some more centrist Democrats have expressed skepticism about the scope of the green new deal committee’s goals.
Some Democrats want to focus more on searching for bipartisan solutions that can be passed by the current Congress, rather than gambling on a hypothetical future Democratic takeover of both congress and the presidency.
Prof Dan Kammen, a professor of energy at the University of California, Berkeley, and former science envoy for the US State Department, tells Carbon Brief that “Democrats need to work within the existing committee system – rather than creating a new select committee – to have any hope of passing something”.
Kammen suggests that while planning for future action is important, Democrats should not abandon the option of finding common ground with some Republicans in the Senate to pass climate policies in the near-term.
The green new deal proposal has received significant attention in the media over the past few weeks. Activist author Naomi Klein praised it in an article in the Intercept, calling it “a comprehensive and holistic plan to actually put the fire out”, rather than a piecemeal approach like past climate policies. On the other hand, the Hill criticised the potentially “exorbitant price tag”, quoting Vibrant Clean Energy’s Dr Christopher Clack that the 100% renewable mandate alone “would cost at least $2 trillion” over the decade. Meanwhile, Vox’s David Roberts stressed the importance of aspirational exercises, even if they are unlikely to be passed into law:
The proposed green new deal reflects a new focus on climate change by Democrats, advancing for the first time a set of measures that reflect the scale and speed of a mitigation response that would be consistent with a pathway limiting warming to below 1.5C above pre-industrial levels. At the same time, it is still far from being a fleshed-out plan, and the proposal to create a green new deal subcommittee in the House thus far only has a handful of supporters and has a long path to go to becoming reality.