Written by Stan
Cox and first published at Green
Social Thought
A burgeoning
save-the-climate effort called the Green New Deal, explains
Vox’s David Roberts, “has thrust climate change into the national
conversation, put House Democrats on notice, and created an intense and
escalating bandwagon effect. … everyone involved in green politics is talking
about the GND. … But WTF is it?”
Roberts goes
on to give a good summary, but no one can fully answer that question until
someone puts a complete plan down on paper. We do know that the vision as it’s
being described by its fans (and it seems to have nothing but fans in the
climate movement) explicitly draws its inspiration from the New Deal that the
Roosevelt Administration launched eighty-four years ago in an effort to end the
Great Depression.
A Tale of Two Deals
The Green New
Deal would emulate its predecessor’s use of public investment and hiring,
improvement of wages, and socioeconomic safety nets to accelerate economic
growth and reduce unemployment. In asking how well that strategy might work
against this century’s climate crisis, we first need to take into account how
the original New Deal worked, both as a civilian project and as it morphed into
the war effort of the 1940s.
The massive
public investment in the civilian economy that began in 1933 carried on through
that decade. And the war production and recruitment boom of the early 1940s
should be seen as an extension of the New Deal, in part because that turned out
to be the spending that finally ended the Depression.
The diversion
of money and physical resources into military production necessitated the
creation of a War Production Board that allocated resources between the
military and civilian sectors and limited production of specified civilian
goods. With supplies of consumer goods shrinking and demand steady or rising
(because thanks to the war, people finally had more money to spend), the
government had to resort to price controls and fair-shares rationing. Then,
once the war was over, both pent-up demand and civilian production were
unleashed. Before long, the economy was growing rapidly.
Under the
Green New Deal vision, investment in renewable energy and infrastructure
production would be the mechanism for revving up the economy. But whatever
shape it takes, this new New Deal would be born into a very different world
from that of its predecessor—a world that can’t handle a big economic stimulus.
If we are to avoid
climate catastrophe, we have to simultaneously bring an end to fossil-fuel
burning and develop vast renewable energy capacity, both starting right now and
both on a crash schedule. That means the everyday economy must find a way to
run on much less available energy.
Analyses
purporting to demonstrate otherwise—claiming that current and growing energy
demand can be met by 100% renewable generation—rely on overly optimistic
technical and environmental assumptions, and on the assumption that today’s
huge disparities in energy consumption among and within countries will
remain in place.
Research
based on more realistic assumptions shows that neither the United States nor
the world can satisfy 100% of current, let alone projected, energy consumption
only with renewable sources. And there’s no way that even a more modest but
still adequate introduction of renewable energy could be achieved within a
decade or even two.
Quickly
phasing out fossil fuels at a time when renewable sources have not yet been
phased in, affluent nations and communities in particular will have to
shrink their total energy consumption dramatically while shelling out
billions to help fund renewable energy in poor nations.
The Green New
Dealers nevertheless are holding out the promise of prosperity and
sustainability through growth. Without asking where the energy to fuel that
growth will come from, they predict that with heavy investment in renewable
infrastructure, the U.S. economy will expand rapidly so that lower-income
households can look forward to more, better jobs and rising incomes.
Unlike the
World War II stimulus, this new green stimulus will not be accompanied by any
planned allocation of resources or limits on production and consumption in the
private sector. But that is what’s needed. Given the necessity for an
immediate, steep decline in greenhouse emissions and material throughput, such
planning and limits are needed even more now than they were during World War
II.
In the 1930s,
the U.S. and world economies were vastly smaller than they are today, and
greenhouse emissions were far lower. Earthlings, all but a tiny handful, were
blissfully unaware that continued fossil-fueled growth would one day become a
mortal threat to civilization. The original New Deal could concern itself only
with economic prosperity and justice. Then a second concern—fascism—emerged,
and the productive forces of the economy had to be temporarily transformed. The
New Deal stimulus with its war-spending extension brought back prosperity, even
if material abundance had to be put on pause until the war was over.
As far as I
know, no one complained at the time about the 65 percent increase in fossil
energy consumption that occurred between 1935 and 1945 thanks to the growing
economy. Even if there had been prophetic scientists within the growing federal
bureaucracy of the 1930s sounding the alarm on future global warming, that
carbon would have had to be spent anyway in order to stop the march of fascism.
Like war production
in the 1940s, green energy development is an absolute imperative. It will also
require us to spend emissions in the short run in order to prevent emissions
over the long run. But the short run—the next decade or two—is precisely the
period when a steep decline in emissions is necessary to stay this side of the
dreaded climatic tipping point. During those years, we won’t yet have enough
renewable energy capacity to substitute for all of the fossil energy capacity
that we need to be eliminating.[1]
Sufficiency for All, Excess for None
The Green New
Deal would not achieve an economic transformation; rather, it would hitch its
sustainable-infrastructure investment and taxation reforms to the existing
economy. It would leave the private sector untethered, free to produce for
profit rather than for quality of life. Inevitably, pressure would build to
crank the dirty energy back up.
To avoid that
disaster, we need a strict national emissions ceiling that declines steeply
year by year. Across the economy, resources must be diverted by law away from
destructive and superfluous production, toward meeting human needs. Likewise,
abuse of land, water, and ecosystems must be outlawed, no matter how much
money-pain it causes those who’ve been enriched by that abuse.
Such limits
are what’s missing from the Green New Deal’s vision. But because it’s still a
vision and not yet a plan, there is still time to conceive a reworked version
(a New Green Deal?) that has a reasonable chance of delivering on both of its
goals.
Any effective
strategy to drive emissions down to zero cannot also expect to spur aggregate
growth; it would in fact curtail and even reverse the growth of GDP.
Fortunately—well-tended conventional wisdom notwithstanding—degrowth in America
would not necessarily bring on a Great-Depression-style social catastrophe.
The British
scholar Jason Hickel writes that, to the contrary, “ecology-busting levels of
income and consumption characteristic of rich nations are not necessary in
order to maintain their strong social outcomes.
We can say this because there are a number of countries that are able to
achieve equally strong social outcomes with vastly less income and
consumption.”
A big,
laudable goal of the Green New Deal is to reduce economic inequality. We’ll
have to await the unveiling of the full plan to see the specifics of how that’s
to be achieved. If, as is likely, its drafters follow the politically
palatable, well-worn, but rarely successful equality-through-growth route,
their plan will be incompatible with emissions limits tight enough to achieve
sufficient emissions reductions.
What’s needed
instead is a direct cure for inequality. Expropriating the wealth of the 1
percenters would be a good start, but the necessary transformation will need to
go much deeper, putting a floor under and a ceiling above individual wealth and
income.
Although it
really is possible to scale back our economy in a way that improves life for
all Americans, such an effort will face stiff opposition at the top of the
economic pyramid, the place where the fruits of GDP growth always tend to
accumulate. That doesn’t mean just the 1 percent. I have argued that it’s the
33 percent of American households with highest incomes who would need to
experience the steepest economic degrowth.
I’m talking
about adopting but also going way beyond the Green New Dealers’ excellent
arguments for a more steeply progressive tax structure (and their bad arguments
for a carbon tax [2]). Limitations on resources, as well as mandatory
production of the most necessary rather than the most profitable goods and
services, will have their greatest dollar impact among the 33 percent (which
comprises households earning more than about $90,000 annually.) And within that
top one-third, the greater a household’s wealth and income, the greater will be
the impact, because, as Jesse James would say, that’s where the money is.
The impacts
will come from several directions. An effective climate/equality strategy would
reduce profits in industries not involved in green energy conversion or
production of needed goods and services. Stock prices of companies not working
toward the conversion would fall. Stockholders, owners, investors, and upper
managers, the great majority of whom belong to the 33 percent, would bear the
brunt.
If shortages
and inflation were to strike, then allocation of resources could be adjusted,
and price controls, subsidies, fair-shares rationing, and other policies would
have to be put in place when and where they are needed. That would result in
even greater shifts of income and wealth from the top toward the bottom of the
economic scale.
Meanwhile,
the conversion to green energy capacity and infrastructure, the costs of which
have been optimistically estimated at $15 trillion for the United States alone,
will be for decades to come a rapidly growing sector of a shrinking overall
economy. That money will have to come from slashing military appropriations and
other wasteful spending, as well as wealth, financial-transaction, and
inheritance taxes. And the green buildout will have to be regulated so that it
provides plenty of employment but no profiteering.
A growing
segment of the climate movement rightly
recognizes the link between capitalism and greenhouse warming. And I think
it’s safe to say that policies like those I’ve described here would be pure
poison to a capitalist economy. A socialist transformation is necessary, but
that in itself won’t be sufficient to reverse Earth’s ecological degradation
unless it is also dedicated to drawing the human economy back within necessary
ecological limits while ensuring sufficiency for all and excess for none.
Stan Cox
(@CoxStan) is on the editorial board of Green Social Thought. He is the author
of Any Way You Slice It: The Past, Present,
and Future of Rationing and, with Paul Cox, of How the World Breaks: Life in
Catastrophe’s Path, From the Caribbean to Siberia.
Notes
[1] In the
mainstream climate movement, the fundamental problem of falling energy supply
during the conversion is generally dismissed by uttering the magic word
decarbonization. Based on wholly unrealistic technological hopes, the claim is
that energy generation, transportation, and manufacturing can be accomplished
with ever-decreasing carbon emissions while sustaining rapid growth.
Decarbonization would a “core principle” of a House
Select Committee on the Green New Deal proposed by Alexandria Ocasio-Cortez
(D-NY). But research suggesting the possibility of complete or near-complete
decarbonization at high levels of output has been shown
to be highly deficient. Only a far more modest degree of decarbonization
can be achieved within the narrow near-future time window in which we must
eliminate greenhouse emissions. As if that weren’t enough, decarbonization of
energy supplies has been shown to lead to increased energy demand,
which in turn would lead to a treadmill effect.
[2] The
carbon tax rates that would be required to drive emissions down rapidly enough
would be much higher than any rates tried or proposed by anyone so far. The tax
would have to be brutally heavy, even if there were a rebate to compensate
low-income households. And the larger the rebate, the more the tax’s impact
would diminish, because people would use that money to pay the taxes necessary
to create more emissions. Meanwhile, the affluent would be able to unfairly buy
their way out reducing their own emissions, even with a high tax. They’d whine,
but they would not give up any more energy than they had to. Given all that,
the majority would not stand for the unfairness, and would not accept a
tax/rebate system that’s strong enough to be effective.
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