The Green New Deal, explained (2018).
As we will see, the exact details of the GND remain to be worked out, but the broad thrust is fairly simple. It refers, in the loosest sense, to a massive program of investments in clean-energy jobs and infrastructure, meant to transform not just the energy sector, but the entire economy. It is meant both to decarbonize the economy and to make it fairer and more just.
But the policy is only part of the picture. Just as striking are the politics, which seem to have tapped into an enormous, untapped demand for climate ambition.
When I think about the social status of the GND, I am struck by an analogy: It’s a bit like concentrated solar power. (I’m an energy nerd. Sue me.) In a concentrated solar power plant, large arrays of mirrors reflect sunlight onto a single tower, heating the fluid inside it. The fluid transfers heat to water, the steam from the boiling fluid drives a turbine, and the turbine generates electrical power.
The GND is the tower, and all the sudden, all the mirrors are aligned, focused on it. The heat is building, the water is rapidly reaching a boil. Meanwhile, its owners are racing to build a turbine.
There is immense potential energy in the GND, a concentration of social attention and intensity. But converting that heat to power — to real results on the ground — will involve a great deal of political and policy engineering, almost all of which lies ahead.
The GND has great potential, but then, American political history is a long story of wasted potential, of waves of progressive enthusiasm breaking on the rocky shores of Washington, DC, to no lasting effect. Whether that fate awaits the GND depends on many things, among them whether President Donald Trump — the culmination of a history of total Republican intransigence and ugliness the stretches over young activists’ entire adult lives — has changed the political landscape enough that Democrats might leave behind their long defensive crouch and voice some ambition.
“building or upgrading to energy-efficient, distributed, and ‘smart’ power grids, and working to ensure affordable access to electricity”Improving the nation’s patchwork electrical system is an enormous undertaking that Congress has been grappling with for more than a decade. It provided funds toward a smart grid — a reimagined electrical grid that makes use of technology to improve reliability and efficiency — as part of the 2009 economic stimulus, but not explicitly since then. The Department of Energy has provided some funds since then, according to the Congressional Research Service, putting $3.6 billion each year toward the smart grid — not nearly enough to implement it nationwide by 2030. It’ll cost hundreds of billions of dollars over 20 years, according to estimates, but greatly improve the country’s electrical infrastructure.
Energy efficiency“upgrading all existing buildings in the United States and building new buildings to achieve maximal energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification”Without having to Google, we know there are a LOT of buildings in the US. Upgrading all of them would certainly make the green building industry explode. Would it be done through tax credits? Grants? Large-scale building upgrades have been tried before, including in the 2009 stimulus, which put $4.5 billion toward retrofitting federal buildings and $3 billion toward retrofitting public housing projects. Here’s a HUD report on the public housing effort, which argues that savings on electricity and water costs were achieved. However, to repeat, there are a LOT of buildings in the US, and no one knows what it would cost to make them all “green.”
Transportation“overhauling transportation systems in the United States to eliminate pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in (i) zero-emission vehicle infrastructure and manufacturing; (ii) clean, affordable, and accessible public transportation; and (iii) high-speed rail”There are models to encourage low-emission vehicles that the current government is abandoning. Some federal tax incentives for people buying electric vehicles are running out (Tesla!) and haven’t been renewed. Others, like increased emissions standards, have been jeopardized by the Trump administration. Relatively cheap gas in recent years also hasn’t helped Americans move toward better fuel efficiency.But encouraging people with a tax incentive is different from overhauling transportation systems. And that’s hard: Just days after the Green New Deal was introduced, California’s new governor, Gavin Newsom, a Democrat and progressive, nixed his state’s planned high speed rail line from Los Angeles to San Francisco to instead focus on three smaller Central Valley communities. One reason Newsom said he didn’t end the program altogether was because he didn’t want the state to have to return a $3.5 billion federal loan.
Low-tech solutions“removing greenhouse gases from the atmosphere and reducing pollution, including by restoring natural ecosystems through proven low-tech solutions that increase soil carbon storage, such as preservation and afforestation”This could cover a lot of things, one of which, essentially, would be planting trees to combat climate change. It’s a thing. It’s been tried in Israel and Europe and there are efforts to reforest in Brazil. It is the cutting of rainforests there, however, that plays a biggger role in climate change. Carbon Brief has a handy world map. The US Department of Agriculture and the Forest Service have a complicated cost estimate for afforestation in every county in the US. Another might be the protection and rehabilitation of wetlands to guard against the effects of climate change.
Cows and climate change“working collaboratively with farmers and ranchers in the United States to eliminate pollution and greenhouse gas emissions from the agricultural sector as much as is technologically feasible”This element has already been boiled down to cow farts, according to the President and that prematurely published set of FAQs. Cow and livestock emissions are something that deserves attention. This is not about your your purebred heritage cow, but rather about industrial agriculture.Beef is responsible for 41% of livestock greenhouse gas emissions, and that livestock accounts for 14.5% of total global emissions, according to a CNN special report this year, which also pointed to the UN Panel on Climate Change Report, which suggested changing diets worldwide could contribute 20% of the effort needed to keep down global temperatures. The USDA projects the average American will eat about 222.4 pounds of meat and poultry in 2019, 53.4 pounds of which will be beef.
Guaranteed job, leave, vacation and retirement“guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States”Here we veer from the climate change portion of the document to goals that seem even more difficult to achieve. Would a family-sustaining wage mean different pay for people with different numbers of children? Would it require that both adults in a given household work? The living wage in Springfield, Illinois — chosen randomly — in MIT’s Living Wage calculator is $11.41 per hour for one adult and $18.44 for two adults and two children. If one of the adults is working part-time, the baseline hourly wage rises to $26.39.Things change when you factor in benefits. An interesting 2018 report from the left-leaning Center on Budget and Policy Priorities with some back-of-the envelope calculations on the cost for a federal jobs guarantee suggested the government could provide 9.7 million jobs to the under- or unemployed at a mean wage of $32,500 to account for different levels of experience, etc. Adding in taxes and benefits makes the annual cost of each job about $56,000. So the total cost to the government each year would be about $543 billion.That’s less than the nearly $674 billion the government spends on the Pentagon’s budget. It is much less than the government spends on safety net programs Medicare and Social Security each year.
Labor laws“strengthening and enforcing labor, workplace health and safety, anti-discrimination, and wage and hour standards across all employers, industries, and sectors”There’s a patchwork of wage laws across industries. Tipped workers, like restaurant employees,have a lower minimum wage. Some states have enacted much higher minimum wages for their workers. Creating new laws on this front would require a national debate. Discrimination is already illegal. But it also has very little to do with climate change.
Public ownership“providing and leveraging, in a way that ensures that the public receives appropriate ownership stakes and returns on investment, adequate capital (including through community grants, public banks, and other public financing), technical expertise, supporting policies, and other forms of assistance to communities, organizations, Federal, State, and local government agencies, and businesses working on the Green New Deal mobilization”The public is going to pay for all of this change, so the public should get a return, is one way to look at this passage. The public as an owner is likely enough to strike fear in many Republicans. And it’d be a sure trigger for them to bring up Venezuela, which has squandered the riches of its state-run oil company.On the other hand, California is again dealing with the bankruptcy of a privately owned public utliity, PG&E, and debating whether it should be turned into a public utility. How governments should own things is an important question without a clear answer.
Providing higher education“providing resources, training, and high-quality education, including higher education, to all people of the United States, with a focus on frontline and vulnerable communities, so those communities may be full and equal participants in the Green New Deal mobilization”There’s a lot in this portion, but let’s focus on the part about higher education for all people. That sounds a lot like the free-college proposals of recent years. It might not be something any Democrats are going to oppose, exactly. But it’s also not something they’ve found a way to accomplish yet. One free-college proposal, which was not included in Green New Deal but offers a guideline, came from from Sen. Bernie Sanders, the Vermont independent. He would provide states with $47 billion per year to cover two-thirds of the cost of tuition for students at public colleges and universities. Sanders proposed a new tax on Wall Street trades to finance the program.
Trade unions“strengthening and protecting the right of all workers to organize, unionize, and collectively bargain free of coercion, intimidation, and harassment”Unions have been in a long-term decline in the US. While 20% of US wage and salary workers were in unions in 1983 — about 17.7 million people, according to data from the Bureau of Labor Statistics — that was down to 10.5% of wage and salary workers and 14.7 million union workers by 2018. There are many reasons for this decline, not the least of which is the changing nature of US manufacturing.Unions remain strongest in the public sector and among government workers ranging from law enforcement to teachers. An additional 1.6 million workers are in jobs covered by union contracts but are not members of the unions.
Trade deals“enacting and enforcing trade rules, procurement standards, and border adjustments with strong labor and environmental protections”In this case Green New Dealers might align with Trump against trade deals, as Sen. Elizabeth Warren has. She, like Trump, opposed the Trans-Pacific Partnership. He said it was poorly negotiated. She said it didn’t do enough for international worker rights. But the Green New Deal crowd goes further, and opposes even the deals Trump supports, like the planned US-Mexico-Canada trade agreement, which Warren has called NAFTA 2.0.
Indigenous people“obtaining the free, prior, and informed consent of indigenous people for all decisions that affect indigenous people and their traditional territories, honoring all treaties and agreements with indigenous people, and protecting and enforcing the sovereignty and landrights of indigenous people”You could see this playing a role in particular in terms of oil drilling, in the Arctic National Wildlife Refuge or in terms of standoffs like the one at Standing Rock in North Dakota in 2016. This would certainly be a policy shift for the US government, which has at times seemed to give deference to oil companies.There could be lost development opportunities, but many Democrats would certainly trade that for the twin objectives of slowing oil dependence and honoring indigenous peoples.
Health care, housing, security, clean air and water, healthy food and nature“providing all people of the United States with — (i) high-quality health care; (ii) affordable, safe, and adequate housing; (iii) economic security; and (iv) access to clean water, clean air, healthy and affordable food, and nature”This is lumping a lot of things in together. The quibble here between progressives and conservatives will be whether the US government should be providing access to health care. Many Green New Deal supporters all support “Medicare-for-all,” which is both a general idea that many Democrats are behind and also a specific policy proposal that has fewer supporters.One question is whether the government would have to essentially end the private health care industry in order to create a public one. That kind of drastic change has the potential to really frighten voters, who punished Democrats for creating the Affordable Care Act in 2010 and then published Republicans for trying to take it away in 2018.The government already does quite a lot, although some say not nearly enough, on the food, water, air and nature fronts with the Food and Drug Administration, the USDA, the Environmental Protection Agency and the National Park Service, so it’s hard to so say what would change under a Green New Deal without more specifics.
The global transition to renewable energy, explained in 12 charts. This is an excellent overview of the status quo as it relates to clean energy..
Defending the Green New Deal (2019)
Bill Atwood’s disparaging take on today’s Democratic party was quite curious, but shortsighted. Here is another perspective to consider.
He cites that the Green New Deal will cost $95 trillion. The actual estimate from the American Action Forum, a center right think tank, is between $51 to $93 trillion. Politifact has rated these numbers false, but let’s go with it. Whatever it is, there’s no doubt there will be a cost, but what is the cost of not doing the Green New Deal. When solving problems you don’t just look at the cost of the solution, you also consider the benefits. Does the benefit outweigh the cost?
We are already seeing the devastation from increasing frequency and intensity of natural disasters (fires, tornados, hurricanes, floods, mud slides). According to NOAA, the 2017 cost was $301B. Add to it the cost of loss of homes, businesses, of revenues, loss of jobs, loss of healthcare from not having a job, deaths of loved ones (362 in 2017), family disruption, and homelessness. What is the price of that? These are just the direct effects of natural disasters. Other effects of climate change are heat-related deaths (look at the heat map of the U.S.), coastal property losses, lost wages in outdoor industries, deaths related to bad air quality, infrastructure damages, plummeting real estate value, destruction of financial centers, reduction of land mass, rising insurance rates and uninsurable properties. It just goes on and on.
Can you imagine the economic loss you would sustain if your house were flooded permanently? Now imagine the economic loss of the country when both coasts are under water by a few feet. Even the false cost of $93 trillion is beginning to look like a bargain.
What else does the Green New Deal bring to the table? Besides preventing the devastation described, it jump-starts economic growth. Fortune magazine says wind and solar is creating jobs 12 times faster than the rest of the economy. The plan for “green” buildings is to retrofit existing buildings with conservation and renewable energy technologies and require that new buildings be built that way. It is NOT the fear-mongering lie that all buildings will be torn down.
No one is eliminating air travel and all fossil fuels as though one day you will wake up and you can’t fly or drive as suggested by Bill. Because of fuel efficiency standards, today’s planes and cars use far less fuel, which translates to money in your pocket and cleaner air. Imagine if we still drive 10-mpg cars at today’s gas prices. “The Deal” also supports electric cars, which costs less to operate. There is much more to “The Deal” but the bottom line is that it creates not just jobs, jobs, jobs but great-paying jobs while cleaning the environment and reducing health care costs.
America is losing its technological leadership and economic dominance. China is closing in. The Green New Deal will not only mitigate disasters but also advance our technological leadership and stem China’s march to overtake the U.S. economy.
There have been three industrial revolutions (the Age of Mechanical Production; the Age of Science and Mass Production; The Digital Revolution). We are on the cusp of the fourth industrial revolution (which includes the Green economy) but some want to hold us back with fear tactics. Historically that like-minded group used the same tactics to resist the previous three revolutions. Progress can’t be stopped. Today we don’t have the luxury of time to let it play out on its own terms. It must be accelerated for the sake of your children, grandchildren and all their descendants.
The myopic view of why we can’t do something is not what made America great.
Industrial policy often gets a bad name among economists. Why are you so keen on it?
First of all, there are different types of industrial policies. There is the effective and there is the ineffective kind. The problematic industrial policies are ones that are just fueling growth in a limited part of the economy, and it doesn’t become a systematic way to transform the economy. I think functional, effective industrial policies are ones that change behaviors across different industries—rather than those that “pick” a couple of industries to subsidize. They are about economic transformation.
Is the Green New Deal an example of industrial policy?
It depends on how it gets interpreted. I was speaking with Alexandria [Ocasio-Cortez] about that back in September.
The Green New Deal will be much more effective if it is economy wide. And that is very much the spirit that [Ocasio-Cortez] and others in the Democratic Party are arguing for. This isn’t just about renewable energy. It’s about greening the entire economy. A Green New Deal is not just about renewables but also about getting every part of the manufacturing sector to transform itself in a green direction.
Why reference the New Deal pushed by President Roosevelt to get us out of the Great Depression?
There are two bits to the Green New Deal. One is the direction-setting that Roosevelt provided in getting new projects and infrastructure off the ground. This is where it is important to move away from a sectoral approach toward an economy-wide transformation. Another important part regards the word “deal,” or a new social contract between government, business, and citizens.
The greater the degree to which the Green New Deal can become a conversation about the direction of investment and innovation, but also the distribution of the rewards from a new public- private partnership, the more interesting it will be. What is the deal we want with these companies? What are the conditions we should be attaching?
Almost overnight, the idea of a Green New Deal has won over environmental activists and many lawmakers. An all-out national mobilization to decarbonize the economy has a natural appeal to those who see climate change as an immediate, existential threat. But others have doubts. Why can’t markets guide the transition from carbon? Do we really need an expansion of the public sector on the scale of the New Deal or World War II? Can we afford it?
As economists, we think the answer is Yes.
To many economists, the obvious alternative to a Green New Deal is a carbon tax. Make the tax high enough, and businesses and consumers will figure the best ways to reduce emissions. A group of eminent economists from both parties, including Nobel Laureates and former Federal Reserve chairman, recently endorsed this approach to climate change. They argue that markets, rather than regulation or public spending, are best at spurring investments in clean energy.
Carbon pricing definitely has a role to play, but market approaches have limits. Markets are effective at allocating resources when the required adjustments are small and the outcomes clear and immediate. Yet, there’s a reason that during World War II, the government built aircraft factories and allocated scarce materials like steel and rubber through the War Production Board. Closer to home, there’s a reason that large businesses have professional managers to plan their operations, and don’t rely on internal markets.
The limits of leaving large-scale planning to markets should be even clearer today, especially after the experience of the housing bubble and crash, which demonstrated a colossal failure of financial markets to direct investment to productive uses. We shouldn’t count on the same financial system that so mismanaged the housing market to guide the shift away from fossil fuels on its own.
The Trouble With the ‘Green New Deal’ (2019). This article is good but largely discusses the political problems with the GND.
Green is the new red (2019)
A contradiction in left-wing politics for decades has been the professed support of community, diversity, localism, and democracy on the one hand with the advocacy of federal power to address society’s ills on the other. The Green New Deal (GND) issued by Rep. Alexandria Ocasio-Cortez and co-sponsors illustrates the contradiction in spades.
The proposed scope of new federal authority under the GND is remarkable. The plan demands a “national, social, industrial, and economic mobilization on a scale not seen since World War II” and a “10-year national mobilization.’’ The use of the war-like “mobilization” is particularly aggressive when talking about peacetime domestic policymaking.
The plan would push the nation to reach zero greenhouse gases, upgrade all buildings, generate all power with zero emissions, overhaul transportation, and generate “massive growth” in clean manufacturing. It would supposedly provide all people education, training, a good job, high-quality health care, affordable and safe housing, economic security, clean water, clean air, healthy and affordable food, and access to nature.
It would do all this with spending, regulations, and government “ownership stakes.”
Yet even as the central government’s power was hugely increased, the GND promises “transparent and inclusive consultation, collaboration, and partnership” with everybody. As bureaus all over Washington were formulating one-size-fits-all plans to control our lives, the GND promises, “all people of the United States may be full and equal participants in the Green New Deal mobilization.”
The GND has lots of warm and fuzzy language. It would ensure “the use of democratic and participatory processes that are inclusive of and led by frontline and vulnerable communities and workers.” And it would implement “community-defined projects and strategies.”
However, long experience shows that when the federal government subsidizes and regulates local activities, decisionmaking moves from local elected officials to unknown and inaccessible federal bureaucrats. The GND would replace local and voluntary interactions with top-down coercion.
The exercise of vast federal power under the GND would steamroll collaboration, partnership, diversity, localism, and participatory processes.
In the language of Rep. Ocasio-Cortez’s proposal: Whereas the Green New Deal is supposed to help society in many ways, be it resolved that the plan would be a Grand New Disaster for liberal values such as community and democracy.
Coming back to the so-called Green New Deal, there is now little doubt that it would impose massive disincentives on work effort and economic output. I can at least applaud those interventionists who admit openly that it will be painful, but still claim that the bitter medicine is necessary to save humanity. Obviously I disagree with their prognosis, but at least they’re being consistent.
In contrast, people who are trying to spin the GND as something that is beneficial on its own terms, even putting aside the ostensible existential threat to humanity, are deceiving the public. If Americans are caught up in a rat race where they work too much in order to afford to buy fancy toys and take exotic vacations, then they should be convinced through persuasion to break out of this “keeping up with the Joneses.” You don’t make people better off by artificially making energy more expensive.
For example, suppose your friend Bill is about to waste (in your mind) $35,000 on a new car, when the more modest $15,000 car is much more responsible, since he has a lot of credit card debt and young kids to support. Fine, then maybe—if you’re close enough friends—you should delicately urge Bill to buy the cheaper vehicle and use that $20,000 to pay off his credit cards. But what wouldn’t make any sense at all would be to tax away $20,000 from Bill, so that he no longer even had the option of buying the expensive car. Sure, that would make him “do the right thing” narrowly conceived, but it wouldn’t actually help him because of the means by which you made him change his plan.
The Green New Deal works in a similar fashion. By making electricity and gasoline artificially more expensive, and (through its “job guarantee”) by wrecking the incentive to work, any version of the GND would make private-sector labor effort far less productive per hour. This would have the effect of reducing US GDP for sure, but it wouldn’t be nearly as beneficial in terms of “less consumerism” as would be the case, if Americans merely changed their shopping habits without having the government artificially wreck the economy.