A dramatic solution to both economic inequality and climate change is the Green New Deal. It was initially put forth by Pulitzer Prize winner Thomas Friedman in 2007, and since then, it has played a significant role in American policy discussions.
Senator Ed Markey and Representative Alexandria Ocasio Cortez (D NY) presented the Green New Deal in Congress in 2019. (D Massachusetts). The federal government is urged to launch a 10 year national mobilization to achieve net zero greenhouse gas emissions and provide all of the country’s electrical needs from clean, renewable sources by 2030.
In a Nutshell
- A dramatic solution to both economic inequality and climate change is the Green New Deal.
- It was initially put forth by Pulitzer Prize winner Thomas Friedman in 2007, and since then, it has played a significant role in American policy discussions.
- Senator Ed Markey and Representative Alexandria Ocasio Cortez (D NY) presented the Green New Deal in Congress in 2019. (D Massachusetts).
- The federal government is urged to launch a 10 year national mobilization to achieve net zero greenhouse gas emissions and provide all of the country’s electrical needs from clean, renewable sources by 2030.
- Both proponents and opponents of the Green New Deal make their cases for why it is important to prevent the worst effects of climate change. Some contend that it is too expensive and unrealistic.
- Millions of employment might be created under the Green New Deal by diverting funds from the fossil fuel sector to green technology.
History of the Green New Deal
The term “Green New Deal” was first used by Pulitzer Prize winner Thomas Friedman in January 2007. At the time, the United States was experiencing its hottest year on record (although there have been five hotter years since). Friedman recognized that the easy solution to climate change that politicians were hoping for was not possible. It would cost money, effort, and upsetting an industry that was always generous with campaign contributions.
The Green New Deal is a bold and necessary plan to tackle the climate crisis and create millions of good paying jobs.
Kamala Harris
The transition away from fossil fuels, he argued in a New York Times column, would require the government to raise prices, introduce stricter energy standards and undertake a massive industrial project to scale up green technology.”
The right call is for a ‘Green New Deal,'” he wrote, referring to former President Franklin D. Roosevelt’s national programs to rescue the country from the Great Depression. “If you’ve put a windmill in your yard or some solar panels on your roof, bless you. But we will only green the world when we change the very nature of the electric grid: moving it from dirty coal or oil to clean coal and renewables.”
The United States gets 80% of its energy from coal, oil and natural gas.
The Ocasio Cortez Green New Deal
In February 2019, Ocasio Cortez and Senator Ed Markey (DMassachusetts) put forward a 14 page, non binding resolution in Congress that asked the federal government to make a Green New Deal. The resolution had more than 100 co-sponsors in Congress, and during the election, a number of Democratic candidates for president signed on as well.
On March 26, 2019, Senate lawmakers voted 57-0 against advancing the resolution, with 43 of the 47 Democrats voting “present” to not take a formal position. Democrats protested Senate Majority Leader Mitch McConnell, R Mitch McConnell, for bringing up the vote without first scheduling hearings and expert testimony.
Although politicians have known about climate change and the idea of a Green New Deal for years, this is the most detailed plan presented to the American people to transform the economy, although it is extremely vague and acts as a set of principles and goals rather than concrete policies.
The text of the resolution details how climate change affects the economy, environment and national security, and outlines objectives and projects for a 10 year national mobilization.
The plan emphasizes environmental and social justice. It recognizes that historically oppressed groups (indigenous peoples, people of color, the poor and immigrants) are more likely to be affected by climate change and calls for their inclusion and consultation. Its progressive spirit is reflected in calls for the protection of workers’ rights, community ownership, universal healthcare and guaranteed employment.
According to the resolution, the United States should lead the way in reducing emissions. This is due to its technological advancement and its historical contribution to the disproportionate amount of greenhouse gas emissions. The graph below, from the World Bank, illustrates how U.S. consumers account for a disproportionate share of global carbon emissions.
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What Does the Green New Deal Include?
The main goal of the plan is to reduce U.S. greenhouse gas emissions to net zero and meet 100% of the country’s electricity demand through clean, renewable, zero emission energy sources by 2030.The Green New Deal also calls for the creation of millions of jobs that ensure employment for all Americans, as well as access to nature, clean air and water, healthy food, a sustainable environment and resilient communities. These goals must be achieved through the following actions by the federal government:
- Provide investments and mobilize funds to help communities affected by climate change
- Repair and upgrade existing infrastructure to withstand extreme weather and ensure that all infrastructure related bills in Congress address climate change
- Invest in renewable energy sources
- Invest in manufacturing and industry to stimulate growth in the use of clean energy
- Build or modernize energy efficient electric grids, distributed and smart grids that provide affordable electricity
- Upgrade all existing buildings and construct new ones to achieve maximum energy efficiency, water efficiency, safety, affordability, comfort and durability.
- Support family farming, invest in sustainable agriculture and build a more sustainable and equitable food system
- Invest in transportation systems, specifically infrastructure and manufacturing of zero emission vehicles, public transportation and high speed rail
- Restore ecosystems through land preservation, reforestation and science based projects
- Clean up hazardous waste and abandoned sites
- Identify unknown sources of pollution and emissions
- Work with the international community to find solutions and help them reach New Green Deals
Should Congress pass the resolution, stand alone legislation would be needed to make the Green New Deal a reality.
The Green New Deal and the 2020 Elections
The Green New Deal was one of the topics of the 2020 presidential debates. Then President Donald Trump disparaged rival Joe Biden’s climate change plan, calling it a Green New Deal that would cost $100 trillion. Biden denied the accusation, saying, “That’s not my plan.”
During the vice presidential debate, Mike Pence claimed that the Biden Harris team wanted to “bury our economy under a $2 trillion Green New Deal. [They] want to abolish fossil fuels and ban fracking, which would cost hundreds of thousands of American jobs across the heartland.”
The resolution also influenced the election campaign. Trump acknowledged that human activity contributes to climate change “to some extent.” The Trump campaign wanted to keep fossil fuels in the energy conversation to attract those workers and maintain U.S. relevance as an oil and gas exporter.
President Biden’s Clean Energy Revolution
President Biden declined to endorse the Green New Deal, but Vice President Harris was one of the original sponsors, although she says she fully supports Biden’s climate plan. Called “A Clean Energy Revolution,” the plan has many of the same goals as the Green New Deal but with a less ambitious timetable and at a lower cost.
For example, the Green New Deal aims for zero net greenhouse gas emissions and 100% clean and renewable energy sources by 2030. Biden’s plan, in contrast, achieves that goal by 2050. Implementing the Green New Deal could cost between $51 billion and $93 billion, according to conservative think tanks. Biden’s plan would involve a federal government investment of $1.7 trillion, with private sector, state and local participation of about $5 trillion.
What is at Stake?
A common rebuttal offered to opponents by supporters of the Green New Deal is that, while it will be costly to implement, not doing so will prove more expensive in the long run.
To keep temperatures from rising more than 1.5 degrees Celsius the target set in the 2015 Paris Agreement global emissions must reach zero by 2050. This means that the window to avoid the most severe impact is closing fast.
The federal government spent $450 billion due to extreme weather events and fires between 2005 and 2018, according to a 2018 report from the U.S. Government Accountability Office. But experts warn that it will only get worse.
Climate change will cause more than $500 billion per year in economic losses in the United States alone between now and 2090, according to a 2019 study. Independent research shows that the value of the global economy could disappear by around 10% by 2050 if temperatures continue to rise by 3.2 degrees Celsius and the world does not meet the net zero emissions targets set by the Paris Agreement.
Support and Criticism of the Green New Deal
The Green New Deal resolution makes no mention of how the U.S. government, which is more than $30.4 trillion in debt, would pay for it. Ocasio Cortez told CBS’s 60 Minutes that “people are going to have to start paying their fair share in taxes” to pay for the Green New Deal and suggested tax rates of 60% to 70% for the wealthiest.
Regardless of where the money comes from, there is no doubt that the proposal has a lot of support, not to mention a lot of criticism.
Help
Proponents of the Green New Deal who promote a heterodox macroeconomic framework called Modern Monetary Theory (MMT), including Ocasio Cortez, believe that the government should not worry too much about the cost.”
The federal government can spend money on public priorities without raising revenue, and it won’t ruin the nation’s economy by doing so,” wrote a group of prominent MMT supporters in an op ed for The Huffington Post. “The U.S. government will never run out of dollars, but humanity can run out of limited global resources. The climate crisis fundamentally threatens those resources and the very human livelihoods that depend on them.”
The Green Party, whose plan also calls for the U.S. to move to 100% clean energy by 2030 and to guarantee jobs, claims it will result in health savings (there will be fewer cases of fossil fuel related diseases) and military savings (there will be no reason to safeguard overseas fuel supplies). The party’s agreement also calls for a robust carbon fee program.
A 2015 study by a group of scientists at Stanford University and the University of California at Berkeley claimed that it is possible for the United States to replace 80% to 85% of current energy systems with ones powered entirely by wind, water and sunlight by 2030, and 100% by 2050.
Critique
The real existential threat to the planet makes the Green New Deal a unique statement of principle that is hard to ignore or dismiss. But critics dismiss it as too socialist, too extreme, or too impractical. Some are even warned that environmentalists “want to take away your hamburgers.”
The kind of reform called for in the deal would be very costly and require significant government intervention. The center right American Action Forum puts the maximum cost at $93 billion, while Howard Gleckman of the Tax Policy Center says the plan could slow the economy by increasing debt and even drive jobs overseas.
Instead of the Green New Deal, the federal government could adopt a revenue neutral carbon tax to reduce emissions without exacerbating the fiscal imbalance,” said Jeffrey Miron, director of economic studies at the right wing Cato Institute.
Edward B. Barbier, the U.S. economics professor who wrote the report that formed the basis for the UN Green New Deal, argued that instead of deficit financing, the government should use revenues from dismantled subsidies and environmental taxes.
Investing in a Green Economy
Passage of the Green New Deal is extremely unlikely in the current political climate. But it’s worth looking into the investment opportunities that could come up if it affects what the state does or if it gets approved in the future.
UBS says the Green New Deal is indicative of a longer term trend towards more sustainable and environmentally friendly ways of producing and consuming. Justin Waring, the firm’s chief investment officer (CIO) strategist, recommends investing in environmentally oriented sustainable investments.
Waring added:Josh Price, energy analyst at Height Capital Markets, told MarketWatch that while the resolution is “not a near term catalyst for us, not by a long shot,” the biofuels and renewables space is an interesting place to look for “slow money guys with a long term horizon.” He mentioned NRG Energy (NRG), AES (AES), Xcel Energy (XEL) Renewable Energy Group (REGI) and Darling Ingredients (DAR) as stocks to watch.
While a Green New Deal does not explicitly call for the elimination of fossil fuel use, it would hit the industry hard. Nuclear power values are best avoided in such a scenario, as many do not consider it safe, renewable or a clean source, and it is not part of the resolution. On the other hand, the semiconductor sector and the electric vehicle industry would be among the winners.
Wrap Up
A bold and comprehensive solution to both economic inequality and climate warming is the Green New Deal. There are proponents and opponents of it; some contend that it is too expensive and impracticable, while others contend that it is essential to prevent the worst effects of climate change.
Millions of employment might be created under the Green New Deal by diverting funds from the fossil fuel sector to green technology. Although the resolution has not yet been approved by Congress, it has already affected the 2020 presidential race and is certain to continue to play a significant role in American politics.
FAQs
A proposed economic stimulus plan called the Green New Deal aims to combat both economic inequality and climate warming. Senator Ed Markey and Representative Alexandria Ocasio Cortez introduced it in 2019. The proposal asks for significant investments in infrastructure, jobs, and renewable energy.
The Green New Deal seeks to achieve net zero emissions of greenhouse gases, produce millions of well paying jobs, and advance both economic and environmental justice. Additionally, it plans to make investments in infrastructure, mass transit, and renewable energy sources.
A mix of public and private investments will be used to fund the Green New Deal. Taxing the affluent and companies as well as ending subsidies for fossil fuels will also help pay for it.
The Green New Deal will cut air and water pollution, produce millions of new jobs, and assist to lessen the effects of climate change. Additionally, it will encourage economic justice and work to lessen economic inequality.
A number of groups, including the Sierra Club, the NAACP, the AFL CIO, and the Sunrise Movement, have backed the Green New Deal. Additionally, it has received the support of a number of well known politicians, including Elizabeth Warren, Bernie Sanders, and Alexandria Ocasio Cortez.
The Green New Deal promises to create millions of jobs by addressing economic inequality. By moving money from the fossil fuel industry to green technology, Americans would be guaranteed good jobs backed by unions. The agreement supports the inclusion of traditionally marginalized people, such as immigrants, indigenous people, and members of racially diverse communities.
The idea of a “Green New Deal” was first put forward by Thomas Friedman, who recognized that there was no easy solution to climate change. He suggested that it would take money, effort, and changes in the industry to make it a reality.
In 2019, Representative Alexandria Ocasio Cortez (D New York) and Senator Ed Markey (D Massachusetts) introduced a proposal for a Green New Deal in Congress, although it failed to pass in the Senate.There have been different versions of a Green New Deal, including one drafted by the Green Party.
Detractors estimate a total cost of between $51 billion and $93 billion, based on the most optimistic estimates of the Green New Deal’s policy objectives. Although the cost may be high, supporters argue that the agreement could bring significant savings by avoiding the worst consequences of climate change. Its detractors, on the other hand, claim that its implementation could slow down the economy and would require many reforms and government oversight.
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- U.N. Sustainable Development Goals Knowledge Platform – A Global Green New Deal
- UC Santa Barbara American Presidency Project – 2008 Democratic Party Platform
- Green Party US – Green New Deal
- Pew Research Center – Most Americans Say Climate Change Affects Their Local Community, Including 70% Living Near Coast
- The New York Times – The Green New Deal Rises Again
- FactCheck – How Much Will the ‘Green New Deal’ Cost?
- The New York Times – A Warning from the Garden
- U.S. Energy Information Administration – Fossil Fuels Account for the Largest Share of U.S. Energy Production and Consumption
- Congress.gov – Green New Deal
- UC Santa Barbara American Presidency Project – Presidential Debate at Case Western Reserve University in Cleveland, Ohio
- C-SPAN – Campaign 2020, Vice Presidential Candidates Debate Transcript and video, Comment at 00:29:44 mark in transcript.
- CNN – Transcript: Trump and Biden Participate in the First Presidential Debate, Aired 4-4:10a ET
- JoeBiden – The Biden Plan for a Clean Energy Revolution and Environmental Justice
- United States Government Accountability Office – Climate Change: Potential Economic Costs and Opportunities to Reduce Federal Fiscal Exposure
- Swiss Re – The Economics of Climate Change
- Federal Reserve Bank of St. Louis – Federal Debt: Total Public Debt
- 60 Minutes – Alexandria Ocasio-Cortez: The Rookie Congresswoman Challenging the Democratic Establishment
- The Huffington Post – We Can Pay For A Green New Deal
- Energy & Environmental Science – 100% Clean and Renewable Wind, Water, and Sunlight (WWS) All-Sector Energy Roadmaps for the 50 United States
- Washington Post – The Latest Right-Wing Attack on Democrats: ‘They Want to Take Away Your Hamburgers’
- American Action Forum – Analyzing the Green New Deal
- Tax Policy Center – A Green New Deal Would Cost a Lot of Green
- CATO Institute – Why the U.S. Can’t Afford a Green New Deal
- Nature – How to Make the Next Green New Deal Work
- MarketWatch – As Vague as It Is, the Green New Deal Could Have a Real Impact on Corporate America. Here’s Why
