The Urgent Case for A Green New Deal

Economist Ann Pettifor is one of several leading thinkers publishing books on the Green New Deal (GND) this year. However unlike her contemporary authors, including Naomi Klein and Jeremy Rifkin, Pettifor can lay serious claim to being one of the original Green New Dealers to push the idea back in 2007, and one of only a handful of economists to predict the 2008 financial crash.

Back then Pettifor, along with academics and activists Richard Murphy, Andrew Simms, Charles Secrett, Colin Hines, Geoff Tily, Caroline Lucas and Jeremy Leggett, was a founding member of the original GND group. They were pulled together by the London based New Economics Foundation in the wake of the 2007/08 Global Financial Crisis with the aim of reorienting the UK economy away from over-reliance on fossil fuels and finance and to create green jobs.

Ann Pettifor, a researcher of John Maynard Keynes has been warning the public for the last decade of the risks of repeating monetary policy failures of the past – through the imposition of austerity, echoing Keynes in: The Economic Consequences of the Peace, who foresaw in the crippling reparations and austerity enforced upon Germany at Versailles after WW1, the seeds of economic decline, fascism and the next war.

As an advisor to both the UK Labour Party and leading US Democrats Pettifor’s policy prescriptions on public finance and energy transition are taken seriously on both sides of the Atlantic.

Her overarching message to readers of The Case for A Green New Deal is that action on climate should be guided by planetary boundaries, not the supply or claimed lack of public money, required to fund a rapid zero-carbon transition.

Rather than debating the straw man argument that a lack of money justifies not pursuing a Green New Deal, serious economists including Nicholas Stern and Adair Turner point to the staggering social and environmental costs of inaction on climate, noting decarbonisation of industry can be achieved at a cost of less than 1% of global GDP.

Yet, instead of investment in climate solutions ramping up to meet growing awareness of the climate crisis, global investment in renewable energy has actually fallen since 2017, with renewable investment dropping 12% in 2018, and a further 14% in Q1 & Q2 2019, led by reductions in Chinese solar subsidies.

The central organising principle behind calls for a GND is that climate change represents the biggest collective challenge humanity has ever faced. In order to meet and overcome that challenge, a fundamental restructuring of our economy and society is called for, similar to, but greater in scope, than the mass-mobilisation efforts undertaken to win WW2.

In WW2 speak – winning the war against climate change will involve a total war, one where all of the resources at a country’s disposal must be carefully stewarded in order to win the race to net zero emissions – in just a couple of decades.

It is this a siren call for a global military scale climate mobilisation which presents one of the major potential stumbling blocks to the GND project.

Despite decades of market failure to tackle the climate crisis, in the USA — long obsessed with McCarthyism — the notion of ‘big government’ called for by the GND remains deeply distrusted as a bureaucracy obsessed with wasteful central planning & over-reach into peoples lives.

Yet, the Green New Deal has proven popular with voters, enjoying strong bipartisan support. A survey by the Yale Program on Climate Communications found most democrats and 64% of Republicans backed the GND — without knowing it was promoted by a Democrat millennial Congresswoman, Alexandria Ocasio-Cortez.

One of the ironies of the energy transition is that at its core, the battle for the future of the planets energy system and its climate is an ideological struggle between the big centralised fossil powered utilities, and the decentralised renewable energy of solar and wind, set to power the localised smart grids of the future.

In their attempts to defend the fossil fuel complex, the fossil fuel incumbents and their allies, through ever more aggressive political lobbying, are attempting to capture the modern state as a centralising bulwark against technological and socio-economic progress.

This is Luddism writ large, with governments spending three times as much on subsidising fossil fuel consumption as they do on renewables, despite the enormous costs of pollution to public health and the environment.

In WW2 terms, continuing to subsidise the fossil fuel industry amidst a growing climate crisis is akin to Britain attempting to defeat the Luftwaffe in 1940, while financing the construction of 3 new ME109s for every Spitfire built at home.

Jeremy Leggett, Carbon Tracker’s Chairman from 2011 to 2017, framed the challenge facing humanity as a ‘war on carbon’ – with the ‘Winning of the Carbon War’ dependent upon societies’ ability to dethrone the fossil fuel incumbency in less than a generation.

Naomi Klein goes even further, arguing that climate change can’t be separated from other pressing social problems, each a symptom of neoliberalism: income inequality, corporate surveillance, misogyny and white supremacy – and therefore free-market capitalism itself must be overthrown to deliver progress on climate.

Crucially, Pettifor debunks the argument that a lack of money is a barrier to winning the war on carbon, as the GND would be self-financing, with increased investment feeding back into higher private sector spending and savings and Government taxation.

Due to the different socio-economic and political contexts across the US and Europe, public calls for a Green New Deal will demand different things in each country or region. The following table is an attempt to summarise the objectives of a GND in the USA and UK.

The UK Green New Deal, sometimes referred to as a ‘Green Industrial Revolution’ differs substantially from the US variety, as championed by Senator Bernie Sanders, Congresswoman Alexandria Ocasio-Cortez, and the Sunrise Movement which attempts to shoe-horn a number of socialist aspirations under the banner of decarbonisation of the US economy.