Full version of UK Green New Deal bill, thinking toward international efforts

It’s been more than 10 years in the making, and is the top demand of the youth strikers gathering on Friday for the UK’s largest ever climate protest – which is why Friday is also the first attempt in Britain to put legislation in place to make a Green New Deal a reality for our country. Working with the Labour MP Clive Lewis, I am launching the full version of a Green New Deal bill (formal title, the decarbonisation and economic strategy bill), which sets out a transformative programme driven by the principles of justice and equity. It aims to move our economy away from its harmful dependence on carbon, at the scale and speed demanded by the science, and to build a society that lives within its ecological limits while reversing social and economic inequality.

By Caroline Lucas is the Green party MP for Brighton Pavilion

Our country needs investment and a worker-led just transition. Too many areas have been all but abandoned by Westminster over the past 30 years: industries shut down with nothing to replace the jobs lost; people ignored and disempowered. I’m struck by the opportunities our country is missing, compared with the bold action taken by others. In Spain, for example, the closure of the coalmines comes with a £221m investment package, agreed with the unions, which includes environmental restoration of mining areas and reskilling of miners for green industries. UK workers want to be part of the sustainability revolution and we are denying them the chance.

So how will our bill help this? First, we need to fundamentally change the way our economy is managed, so that democratically elected governments – not the whims of the market – set our future direction. Freed from false economic constraints that benefit only the wealthy, public investment can go directly into productive activity that will, in turn, generate tax revenue. Our pensions and savings can also be redirected into new green bonds, generating a safe return and the investment needed.

It also means moving away from the pursuit of growth as the primary economic objective. Instead, we should prioritise health and wellbeing, reducing inequality and – crucially – tackling the climate emergency.

The bill proposes a Green New Deal commission, representing all sectors of society and multiple areas of expertise, which will draw up detailed plans. By focusing investment particularly in those areas and communities that have been failed most, and by ensuring that workers are at the forefront of designing a just transition, we’ll have the potential to build a broad and durable coalition that can sustain this transformation.

Instead of economic growth, we should prioritise health, reducing inequality and tackling the climate emergency

Government will work with the private sector to invest in the innovative work required to transform everything from manufacturing to the way we produce and consume energy, heat our homes, travel and grow food. This investment will create well-paid jobs and new industries across the country, producing tax revenues for the government.

The bill sets out yearly targets on emissions, inequality and wellbeing. In a report to accompany the bill, our advocacy organisation Green New Deal Group proposes investing up to 5% of annual GDP, around £100bn annually, for the next 10 years. The shortage of “shovel-ready” projects means it may not be possible to spend those sums immediately. But what matters most is what we do in the near future: we need to invest in the infrastructure that will allow us to live within our ecological limits and take us towards the government’s declared goal of net-zero emissions – and well before 2050, which is far too late. And as Lord Deben, chair of the Committee on Climate Change, has said, the sooner we do it, the cheaper it will be.

This is not just about decarbonising our industry and transport systems with investment in railways and emissions-free bus travel. It is also about transforming our farming, and restoring soil health and biodiversity by directing subsidies towards farming methods that support this.

But it is also, crucially, about redistributing power in our country. We are one of the most centralised states in the western world, with power concentrated overwhelmingly in Westminster and, increasingly, Downing Street. Although the Green New Deal must be driven by national government, the details of the plans will be devised and implemented locally. Local authorities are best placed to develop detailed plans with the communities they represent.

It must be about international fairness too, and the bill accounts for this by ensuring finance and technology for the global south.

The years I have spent discussing the Green New Deal with economists and environmentalists have often felt like wasted years. The climate crisis has grown rapidly worse and biodiversity loss is accelerating. But the upsurge in support for climate action, particularly among young people, has been inspiring.

An overwhelming majority of the public think the climate emergency is the most important issue we face. Politicians need to respond: there is no time to waste and a nation to transform.

Caroline Lucas is the Green party MP for Brighton Pavilion


By Ann Petitfor, The Guardian, 2019

Governments around the world don’t need to raise taxes in order to transform their economies and avert climate disaster. Tue 17 Sep 2019 

Alexandria Ocasio-Cortez
 ‘Little did we know that the ideas we seeded in 2007 would be adopted by a shooting star of the Democratic party, Alexandria Ocasio-Cortez.’ Photograph: Jeenah Moon/Reuters

In September 2007, as credit was “crunched” and the financial crisis began to unfold, a group of economists and environmentalists, including the future Green party MP Caroline Lucas, met regularly in my small London flat. Supping on comfort food and wine, we argued furiously while drafting a plan we hoped would transform the economy and protect the ecosystem. We called it the Green New Deal. Little did we know that the ideas we seeded then would be adopted by a shooting star of the Democratic party, Alexandria Ocasio-Cortez, as part of her bid for a New York congressional seat in 2018.

Fast forward to 2019 and the Green New Deal is now at the centre of the 2020 US presidential campaign. Bernie Sanders last week declared the climate crisis a national emergency and launched his version of the deal – a $16.3 trillion plan that includes massive investment in renewable energy, green infrastructure for climate resilience and money for research.

Sanders is vague about his financing plans. He suggests that cuts in military spending could generate cash, but also proposes a rise in tax for big corporations. These are welcome proposals, but our group has one quibble. Big transformational projects are not financed from taxation. Kennedy’s moonshot wasn’t, nor is Britain’s HS2 rail project. Suggesting that the deal can be paid for through tax (even from big corporations) will rightly raise suspicions. Ordinary taxpayers will assume – as they did during the US debate about inheritance tax (reframed by the right as “death taxes”) – that the burden of such a carbon levy will fall instead on their shoulders.

So where should the money come from? There are fundamentally only two sources of financing. The first is borrowing (credit). This is achieved by applying for a loan, or issuing a bond. The second is existing savings.

To raise the money for a green deal, governments would have to draw on their equivalent of a giant credit card, but would also be able to take advantage of investment by savers. Thankfully, the creation of millions of jobs will generate the income and tax revenues needed to repay any borrowing. As Sanders argues, the whole thing will pay for itself.

First, the borrowing: credit issued by a commercial bank, as we all know from spending on our credit cards, does not draw on our existing deposits or savings. Instead it is a promise to pay in the future. OECD governments (backed by millions of taxpayers) are the most trusted borrowers, which is why their promises (bonds) are in such demand. Savings, by contrast, already exist – in bank deposits and savings accounts.

When a government borrows, as it has for financing HS2, that leads to investment and the creation of paid jobs in public and private sectors, and to private sector profits. Both employment income and profits generate tax revenues. Tax revenues are, therefore, a consequence of spending or investment – and can be used to pay back the borrowing. They need not be used directly to finance that investment.

During the second world war commercial banks provided credit to the government in the form of Treasury deposit receipts. They could do so again. But the government also has its own bank, the Bank of England, which issues credit, too (currently known as quantitative easing, or QE), and could use this to purchase government bonds.

To appeal to savers, the government could issue bonds to be repaid over different time periods – short, medium or long-term. These would attract pension funds and insurance companies, but also different kinds of individual savers. They would be able to invest their money in transforming the economy away from fossil fuels, while receiving a regular income in the form of interest. For this to happen, governments would have to be “in the driving seat” when it comes to issuing bonds. Currently they’re more passive – relying almost entirely on demand from private capital markets.

As you can see, this system of financing is entirely doable. However, to succeed, our plan demands a decisive rupture from the neoliberal consensus of pairing expansionary monetary policy (QE) with contractionary fiscal policy (austerity).

The original Green New Deal group continues to meet, to argue, to indulge in good food and wine, and to plot the defeat of that consensus. Later this week, Caroline Lucas, together with Clive Lewis MP, will launch a bill embracing key principles of the plan. From small beginnings, a great change could soon be on its way.• 

Ann Pettifor is the author of The Case for the Green New Deal, published by Verso


By Yanis Varoufakis , The Guardian, April 2019

In times of crisis and catastrophe, children are often forced to grow up quickly. We are now witnessing this premature call to action on a planetary scale. As the adults in government accelerate their consumption of fossil fuels, children are leading the campaign against our species’ looming extinction. Our survival now depends on the prospects for a global movement to follow their lead and demand an International Green New Deal.

Several countries have proposed their own versions of a Green New Deal. Here in Europe, DiEM25 and our European Spring coalition are campaigning under the banner of a detailed Green New Deal agenda. In the UK, a new campaign is pushing similar legislation with MPs such as Caroline Lucas and Clive Lewis. And in the US, dogged activists in the Sunrise Movement are working with representatives such as Alexandria Ocasio-Cortez to push their proposal to the front of the political agenda.

But these campaigns have largely remained siloed. Their advisers may exchange notes and ideas, but no strategy has emerged to coordinate these campaigns in a broader, global framework.

Unfortunately, climate change knows no borders. The US may be the second-largest polluter in the world, but it makes up less than 15% of global greenhouse emissions. Leading by example is simply not enough.

Instead, we need an International Green New Deal: a pragmatic plan to raise $8tn – 5% of global GDP – each year, coordinate its investment in the transition to renewable energy and commit to providing climate protections on the basis of countries’ needs, rather than their means.

Call it the Organization for Emergency Environmental Cooperation – the namesake of the original OEEC 75 years ago. While many US activists find inspiration in a “second world war-style mobilization”, the International Green New Deal is better modeled by the Marshall plan that followed it. With financial assistance from the US government, 16 countries formed the Organization for European Economic Cooperation (OEEC), dedicated to rebuilding the infrastructure of a devastated continent and coordinating its supply of energy.

But if the original OEEC entrenched an extractive capitalism at Europe’s core –protecting the steel and coal cartel – the new organization for an International Green New Deal can empower communities around the world in a single transformational project.

The transnational scope of this mobilization is crucial for three main reasons.

The first is production. Recent studies show that, as long as countries cooperate, all continents have the wind, solar and hydropower resources they need in a zero-emissions world. Northern countries and mountainous regions have better access to wind power, while southern lands are better suited to exploiting the sun. An International Green New Deal could exploit these differences and ensure that renewable energy is available to all of them year-round.

Confronting the climate crisis will require more than keeping fossil fuels in the ground

The second is innovation. Confronting the climate crisis will require more than keeping fossil fuels in the ground. We will also need major scientific breakthroughs to develop renewable sources of energy, adapt existing infrastructure, detoxify our oceans and decarbonize the atmosphere. No country alone can fund the research and development necessary to meet these challenges. The OEEC would pool the brainpower of the global scientific community: a Green Manhattan Project.

The third is reparation. For centuries, countries such as the US and the UK have plundered natural resources from around the world and polluted them back out. Less developed nations have been doubly dispossessed: first, of their resource wealth, and second, of their right to a sustainable life – and in the case of many small island developing states, of their very right to exist. An International Green New Deal would redistribute resources to rehabilitate overexploited regions, protect against rising sea levels, and guarantee a decent standard of living to all climate refugees.

The UN climate change conferences will not save us from extinction – the demise of the Paris agreement should be evidence enough. These frameworks lock us into prisoners’ dilemmas, in which every country has an incentive to defect on their climate commitments, even if cooperation between them would yield a greater collective good. As long as climate cooperation is framed around sacrifice, it is vulnerable to strongmen like Donald Trump who vow to buck international rules in the name of national interests.

The International Green New Deal changes the frame. Rather than pleading for restraint, it sets out a positive-sum vision of international investment, in which the gains from joining in outweigh those to going it alone.

This is the strategy that won Franklin D Roosevelt the original New Deal. His plan addressed people who had given up hope and inspired in them the idea that there is an alternative. That there are ways of pressing idle resources into public service. It made sense to the disheartened and offered opportunity to the entrepreneurial.

The same is true of the International Green New Deal, which mobilizes public finance to crowd in private investments that, together, fund the $8tn transition. Just like in the original New Deal, public financing will involve a mix of taxes and bond instruments. On the former, we can introduce a global minimum corporate tax rate that is then redistributed on the basis of their sales. On the latter, public investment banks – including the European Investment Bank, the World Bank and the KfW, Germany’s state-owned development bank – can coordinate the issue of green bonds that the major central banks agree collectively to support in the secondary markets.

Suddenly, countries with large trade surpluses will realize they are better able to invest their excess capital if green investments in deficit countries are coordinated under the auspices of an international plan. The positive-sum dynamic will prevail.

In this sense, the stakes of the International Green New Deal are not merely environmental. By uniting countries in the project of bottom-up economic transformation – and coercing multinationals to fund their fair share of it – it will also stem the tide of bigotry and xenophobia engulfing the world.

“Advanced” capitalist countries today are literally falling apart. In the US, net public investment has fallen below half of one per cent of GDP. Across the eurozone, net public investment has remained below zero for nearly a decade. It is little wonder that political monsters are rising again: just as in the 1930s, the grapes of wrath are ripening and “growing heavy for the vintage”.

To revive the liberal democratic project, some pundits have suggested making China into a bogeyman. But the real bogeyman is of our creation: a climate crisis wrought by decades of inaction and underinvestment. To address the true existential threat that we face today, we must reverse the economic policies that brought us to this brink. Austerity means extinction.

The promise of an International Green New Deal to is to avoid the pitfalls of cold war politics and unite humanity in the only project capable of preserving a habitable planet. To do this, however, we need a powerful progressive international movement to demand that our leaders begin to act beyond their own borders. Let’s start building it. The children are watching.

  • Yanis Varoufakis is the co-founder of the Democracy in Europe Movement and the former finance minister of Greece. David Adler is a writer and a member of DiEM25’s Coordinating Collective. He lives in Athens, Greece