‘Green New Deal’ and ‘Green Deal’ are opposites – Scotland has to choose

Written by Robin McAlpine and first published at Source News and Analysis from Common Weal

MY PERENNIAL CRITICISM of the Left is that it manages to be correct on high-level principles but bad at actually fighting the fight. As chatter about ‘afterwards’ grows and grows, it is even more important to focus. The future is either a Green New Deal or a Green Deal. They’re opposites and lead in opposite directions. We have to choose.

The challenge for those who want fairness is first to understand the difference, and second, to fight for the one that delivers it. This is especially critical in Scotland.

So I’m begging you – don’t be fooled. Get informed and get angry.

What is a Green New Deal?

I won’t go into the history of the Green New Deal because there is loads written about it. But basically after the 2008 financial crisis a small group of London-based left economists tried to describe how financial, economic, environmental and social problems can be tackled in an integrated way.

The concept of Green New Deal has suffered a bit from that left problem of failing really to get beyond principles. I mean, I don’t disagree with them in the slightest, but without more detail they can be (and are) distorted into something else.

Fundamentally, the purpose of a Green New Deal is to accept that the environment requires the economy to change, and so that change must be done in a way that creates greater fairness and reduces the social harm of free market economics while restructuring the economy so that it can’t return to the practices which did the social and environmental harm in the first place.

It contains a degree of cynicism – because, as we will see, it is quite possible to save the environment and still create an appalling social dystopia. You can save the environment without saving people. So the Green New Deal welds them together.

The fundamental characteristic of a Green New Deal is that it is about economic and social justice and not just environmental justice.

Again, the lack of detail in most conversations about Green New Deals means how exactly this is to be done is either hard to derive or is a confusing series of options. But it should basically work by ensuring collective and democratic ownership of the sectors which are key to environmental harm (like energy) and making major public intervention in others (like housing).

Then, you use the interventions to achieve economic and social change. House-building can create different kinds of jobs, energy can include manufacturing which creates different kinds of jobs. Attached to ideas like job guarantees and greater regulation, we create a more equal and better society.

That can range from the modest (a kind of revival of the post-war Keynesian approach to development) to the radical (a form of ecosocialism). But even the modest end expects big change to come from the transition.

That’s a Green New Deal.

So what is a Green Deal?

A Green Deal is why high-level principles are such a problem. Looking at the rising demand for environmental action from the public (and especially from a younger generation), the people who are behind both climate damage and social failure (i.e. the big corporations) tried to work out how to defuse the situation.

So what they did was come up with a system for taking the ‘New’ out of a ‘Green New Deal’ – which of course they then did literally. Doing this was remarkably easy.

All they had to do was claim completely to support the climate change objectives but decouple the environmental element from the social and economic elements. Their vision is Amazon and Facebook and BP still ruling the world as a low-wage hell-hole – but with renewable energy.

In fact there is a good reason that Green Dealers obsess over carbon; it disguises the real problem. It disguises the fact that the global economy is systematically fucking all the environmental systems on which life on earth rely.

Where a Green New Deal works largely because of the mixture of labour and environmental regulation with direct government intervention and a different economic ownership pattern, a Green Deal drops the regulation part, most of the direct government intervention part and all of the economic ownership part.

It is based around ‘incentivising investment’. Green Deals are highly neoliberal and see giant and powerful investment managers, soil-destroying agrobusinesses, Big Oil, plastic polluters and strip-mining companies not as the problem but the solution.

In particular, because Green Dealers are so ideologically bound to the financial sector they have been trying to work out how to make sure that its dominant role continues. There is a strong argument that these investment funds have done more environmental damage than any other entity in history (they basically own all the oil businesses).

And yet the theory of a Green Deal is that if only you can properly ‘incentivise’ these investment funds to stop investing in the wrong things and start investing in the right things, the problem will fix itself.

It won’t – and even if it did, it will simply make worse all the other social and economic failures of the world economy. But it green-washes some of the worst players in environmental destruction and guarantees them control of the world economy for another 30 years.

If you scratch just beneath the surface of this neoliberal fantasy it starts to fall apart – I mean, in this free market model with its low regulation but high ‘incentivisation’ (give public money to the already rich), who is actually paying to install your new heating system? Because it’s going to cost you £20k. It’s a con designed to ‘sound Greta, act Trump’.

You can tell a Green Deal in a second. It involves setting targets, declaring ‘climate emergencies’ and making theatrical speeches about how much you love trees. But there is no identifiable action and when asked what is actually being done there is a lot of talk of ‘investment opportunities’. That just means yet more wealth-stripping.

Where is this battle happening?

At a global level, there is no battle. That’s because for all the rhetoric of globalization about building a better world through multilateral cooperation, at the multinational level only the super-rich get to play. In the late 1990s, the World Social Forum was created to try and balance the power of Davos. Let’s just say Davos won. There is no serious global campaign for a Green New Deal.

For the US, the battle has already been lost. Bernie Sanders or Elizabeth Warren were the only real chance; Biden is anti-Green New Deal. In the world’s most powerful economy, the battle is between subterfuge and total denial.

In Europe, we get to the heart of the problem – it is here that ‘Green Deal’ was invented. There is much more social democracy in Europe, so there is much more pressure for a proper Green New Deal.

However, hard as it is for left-minded Europhiles to admit it, the EU is a powerless parliament stuck onto a much more powerful committee of European governments – and they’re all right-wing Tories just now. It is they who originated the concept of Green Deal. It is the official EU policy.

I mean, have a look at ‘Renovation Wave’, the EU’s plan for tackling carbon emissions from the housing sector. See if you can work out who is paying the many billions this will cost. Then note how easy it is to see who’s pocket the money will end up in.

It’s barking mad. Proposing that a single street might have each of its houses properly retrofitted individually over say 15 years makes sense only to a free market evangelist. It is the definition of wasteful inefficiency and an open invitation to poor quality work. Unless there is a change (and a substantial one) in the EU, there isn’t a battle for a Green New Deal there. That happened and the Green New Deal lost.

At a UK level, I think we can safely say that a Green New Deal is off the table for the next five years. Beyond that the lead time to get one started is (conservatively) three or four years. Even a Starmer government in 2026 would mean no progress in the UK in this decade – and god knows where we’ll be by then.

So that means that, if you care in the slightest about a Green New Deal, your options start and end with Scotland. It’s not just that we’re exceptionally well placed to deliver one because of our outstanding natural resources, it’s that it would be easy to generate public support for it. So what are Scotland’s options?

Scotland’s options: a choice must be made

As I have already pointed out, Green New Deals remain a bit vague. This is a mistake; in the end they are a reform programme wrapped round a big engineering project. To get to the reform bit you need to understand the engineering bit.

So, in frustration, Common Weal undertook an enormous project next year to put the detail into a Green New Deal for Scotland. First, we committed ourselves to tackling not only climate change but all seven major environmental threats to the world. We committed not to ‘reducing’ our negative impact but taking it to zero. And we said ‘impact anywhere – not just in Scotland’ – so no dumping on the global south.

Then, we broke it down into major areas for action (buildings, heating, electricity, transport, food, land, resources and so on). Then we worked with experts to establish how, technically, it could be achieved. We then costed that and structured the spending in a way that achieved all the social goals of a Green New Deal.

We published it in November as the Common Home Plan. It is a comprehensive, costed, detailed plan for a Scottish Green New Deal. It is realistic and achievable and specific. You know exactly what you’ll get.

The other option on the table is the Scottish Government’s Green Deal. This has been heavily influenced by ‘Charlotte Street thinking’, the perpetual dominance of Edinburgh wealth managers on government policy. It involves the usual eco-theatre (‘climate emergency’ announcements, target-setting) but only one real action.

At the COP21 conference in Glasgow the wealth funds were going to be offered a very lucrative ‘green investment opportunity’ (announced personally by the First Minister). This is for global investors who are being offered “tens of billions worth of future opportunities” in energy and housing.

It is at the ‘call for projects’ stage where corporations come forward and say ‘if you give us money and the rights to your wind/land, we’ll take all that pesky energy/housing transition off your hands’. Which is a way of describing a £3 billion sell-off of Scotland’s renewable assets.

Or, to put it another way, this is the privatisation of all of Scotland’s most valuable resources – in perpetuity. It will simply repeat the same mistakes made during the oil boom of a massive public resource being handed to the already rich.

This will give pocket change to the Scottish Government to sprinkle initiatives around the country which will look like something is happening. But I call £3 billion pocket change because when the cost of a proper Green New Deal is more like £170 billion, it is.

There is no economic or social reform package attached to this , no plan for how any of the engineering supply chain will be captured by Scotland – more hand-wringing no doubt. The rich get richer, the rest of us have to spend our own money on their electricity generated by our natural resources.

And there is no way to block this in the Scottish Parliament because no-one in the SNP ranks ever rebels and so they’ll simply form yet another SNP/Tory coalition to push this through.

This is a choice to be made, not a compromise to be struck

The independence movement has been so broken by the last six years that people with ‘Bairns Not Bombs’ stickers still on their cars are asking me if there is any way we can ‘synthesise’ the Common Home Plan with the Scottish Government’s Green Deal.

No there isn’t. If the Scottish Government sells off Scotland’s remaining natural assets and all transition activity is in the corporate sector, the finances of the Common Home Plan (or any Green New Deal for Scotland) become impossible. Our plan is based on doing this collectively and through an industrial strategy which captures the economy gain of the transition for everyone.

We can finance £170 billion of spending because, doing it our way, it generates more tax revenue from expanded economic activity than it costs to finance the spending. But if the public hands over the source of that economic activity to foreign multinationals, it’s all over.

No matter how much pleading a future government does, the source of Scotland’s future prosperity will be privately owned by overseas multinationals and investment funds. The only option would then be to renationalise it, which is just enormous amounts of completely unnecessary spend which screw up the finance model leaving us trapped.

My current fear is that, given the alarming (indeed unacceptable) nature of the advisory group set up by the First Minister to produce a recovery plan, I very much fear that this renewables fire-sale might be kicking off over the summer. If you hear ‘green investment’, be very worried.

Right now, I have no further advice for you other than to be informed. With democracy in the SNP eroded and currently suspended altogether, with the media we have, with physical distancing rules preventing protest and with the option of an SNP/Tory coalition to get this through Holyrood, the virus has created an opportunity to strip Scotland of its future at its most vulnerable moment.

Right now I can’t tell you how to stop this. But I can beg you not to be fooled, and if you’re in the SNP and you care about these things, I urge you to think hard about means of challenging this which I can’t think of.

This is our collective future. If it is handed to the rich under cover of virus recovery, fury must follow.