Part 1 of Michael Jacobs’ blog on the Green New Deal is available here.

The unexpected success of the (idea of a) Green New Deal in the US in mobilising political support for radical climate policy has not gone unnoticed on this side of the Atlantic. Over recent months a range of think tanks, political activists (including young people engaged in the school climate strikes), political party figures, academics and NGOs have been discussing what a Green New Deal (GND) for the UK might look like. They are seeking to bring together detailed work on the policies and financing required to implement a GND, with the creation of a broad civil society coalition which can advocate and campaign for its introduction (I have been involved in some of these efforts).

The proposition has been given added momentum by two important developments. One is the decision by the Government to adopt a ‘net zero’ target for UK greenhouse gas emissions by 2050, enshrining this in law under the Climate Change Act. This has turned the GND from a radical goal backed largely by leftists and greens into a potential implementation mechanism for a legally-binding objective which is now supported by all the major political parties.

The other is the possibility that the UK may be chosen to host the UN climate conference (‘COP 26’) in December 2020. This is the moment at which countries will be expected to radically strengthen their emissions reduction commitments under the five-year implementation cycle of the Paris Climate Agreement. If COP26 were to be held in the UK, the government would come under immense pressure to show global leadership in its domestic policy approach. A Green New Deal would fit the bill nicely.  

But turning the rhetoric of a Green New Deal into a politically feasible policy programme will not be easy. At least five major challenges will need to be overcome.

The first is political. In the US, where climate politics has become almost entirely partisan, the GND is an explicitly left-of-centre programme being prepared for a post-2020 Democrat President. But in the UK a much broader appeal will be needed. Unless Brexit intervenes, there will still be a Conservative government over the next year when the net zero target and COP26 (whether held in the UK or not) will require a new policy package. With its call for a ‘green industrial revolution’ to create 400,000 new jobs the Labour Party is already well on the way to adopting a GND. But can this also become something the Tories can be persuaded to support? It will need a clever coalition of civil society forces – and possibly some judicious re-labeling – to allow the GND to have both ‘radical’ and ‘moderate’ forms.

The second challenge is institutional. Even if a GND were adopted by government, would it have the capacity to implement it? Much of the discussion about this so far has centred on how a GND would be paid for. While most of the required investment in decarbonisation and wider environmental technologies will come from the private sector, largely mandated by regulatory policy, much will also have to come from public spending. Can this be afforded? There’s been a bit of a distraction here, with proponents of ‘modern monetary theory’ arguing that in times of low inflation there are no effective limits to public spending. In practice, with the budget deficit back to pre-crisis levels and long-term interest rates still at record lows, even mainstream economists acknowledge that there is significant scope for an increase in government borrowing.

The bigger question, in reality, is whether the current institutions of government are up to the job of a GND-style transformation programme. With the Treasury having already let it be known that it opposed the net zero target, and Theresa May’s embryonic industrial strategy uncertain under a new Prime Minister, it is not at all obvious that the British state has the capacity to deliver the scale of investment required. Any GND programme will therefore need to focus as much on institutional as policy reform.

The third challenge is distributional. A cornerstone of the Green New Deal is that it should benefit disadvantaged communities. Some kinds of GND policies have clear potential to do this: a major programme of home insulation, for example, would create jobs right across the country, and could be targeted at under-employed groups. But other policies may be more problematic. As the UK energy system is decarbonised – particularly as fossil fuels used in heating and transport are replaced by renewably-generated electricity – there is a clear risk that energy and transport bills will rise, which unless explicitly prevented will inevitably hit the poorest hardest. As the gilets jaunes protests in France (which were sparked by an increase in fuel tax) have demonstrated, rising costs for households could easily trigger a political backlash, risking the whole initiative being thrown into reverse.

Fourth is the even deeper industrial challenge. Many GND policies, such as investment in renewable energy, will create new ‘green jobs’. But rapid decarbonisation also means the loss and transformation of others. Achieving net zero greenhouse gas emissions will require the near-complete dismantling of the UK’s still sizeable oil and gas industry, with carbon capture and storage its last remaining activity. Our major remaining industrial sectors, including chemicals and motor manufacturing, will need to be transformed. Central to the GND is the idea of a ‘just transition’, in which the workers of such sectors (and the local communities in which they are located) will be protected through a gradual and planned transfer of investment into new sectors and jobs. But there are few precedents for such a transformation occurring in a managed and politically-acceptable way. It will require a depth of industrial intervention, regional policy and political leadership we have not yet imagined.

The final challenge is what might be called the problem of capitalist growth. Most environmentalists support the Green New Deal, but some have warned that ultimately green Keynesianism will not save the planet. If the new jobs and incomes which the GND creates feed back into growth in the regular economy, they will simply cause higher emissions and other forms of environmental damage elsewhere. This is particularly true if GND strategies rest on the same exploitative resource extraction and trading patterns that have fuelled environmental degradation in the global South. While these critiques are unlikely to undermine the immediate political attractions of the GND, they provide a continuing reminder that it cannot magic away the longstanding tension between sustainability and growth in a capitalist system.

There is little doubt that the Green New Deal is an attractive idea. It brings the need for decarbonisation and environmental restoration together with the demand for decent jobs and a just distribution of economic rewards. It defines a key role for the state and a mission for industrial strategy. It offers at once the promise of a new economic paradigm, and an implementable programme to bring to the next UN climate conference. But as these challenges show, there is one thing it definitely shouldn’t be seen as, and that is a panacea.

This piece is cross-posted from SPERI – Sheffield Political Economy Research Institute. Read part 1 of Michael’s blog on the Green New Deal here.

Photo credit: Flickr / Oregon Department of Transportation.

The post The Green New Deal: Easier said than done? appeared first on The Progressive Economy Forum.

Rarely can a policy idea have caught fire so quickly.  A year ago the ‘Green New Deal’ was a largely forgotten British proposal, first made in 2008, for a ‘green recovery’ to the financial crisis. Today it is the single best known new policy identified with the US Democrats, backed by over a hundred members of Congress and supported in at least one opinion poll by over 80% of registered American voters (including nearly two-thirds of Republicans). Championed by the charismatic New York Congresswoman Alexandria Ocasio-Cortez, the Green New Deal (GND) has attracted support and opposition in almost equal measure.

But what exactly is it? And what is its wider significance?

At one level, the first question is easy to answer. The US congressional resolution sponsored by Ocasio-Cortez and veteran Senator Ed Markey sets it out clearly. The GND is a programme to achieve net zero greenhouse gas emissions and a range of other environmental goals (from clean water to healthy food) through a 10-year programme of investment and job creation.

The resolution lists fourteen areas which require government action. These include the repair and upgrading of infrastructure (including 100% renewable and zero-emission power), upgrading the energy efficiency of all buildings, growth in clean manufacturing, the reduction of emissions from agriculture, overhauling transportation systems (including zero-emission vehicles and accessible public transit), restoring and protecting threatened ecosystems and cleaning up hazardous waste sites.

In doing this, the resolution aims to create ‘millions’ of jobs. But not just any old jobs: they must be ‘high-quality union jobs that pay prevailing wages’, and the economic change required must be managed through a ‘fair and just transition for all communities and workers’.  

So far, so ‘green Keynesian’. Drawing on the tradition of President Franklin D Roosevelt’s original New Deal in the 1930s (though not its racially discriminatory character), the GND looks at first sight like a massive public spending and investment programme designed to meet the twin goals of environmental improvement and employment growth.

However, a deeper look at the congressional resolution reveals that the Green New Deal is in fact much more than this. Included amongst its provisions are commitments to a state-subsidised job guarantee for all Americans ‘with a family-sustaining wage, adequate family and medical leave, paid vacations and retirement security’, the strengthening and protecting the rights of workers to ‘organize, unionize and collectively bargain’ and – just in case these weren’t enough – to ‘providing all people of the United states with high-quality health care; affordable, safe and adequate housing; economic security; and clean water, clean air, healthy and affordable food, and access to nature’.  In doing this, it will ‘promote justice and equity by stopping current, preventing future and repairing historic oppression of indigenous peoples, communities of colour, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, the elderly, the unhoused, people with disabilities and youth’.   

In other words, the Green New Deal’s ultimate ambitions go well beyond a green investment programme. They instead approach the transformation of the American economy and society.

This has inevitably led to a backlash. On the one hand, the breadth of the GND’s policy goals has led some Democrats who are otherwise supportive to call for a more politically manageable narrowing of its focus. On the other, its rapid decarbonisation targets have been criticised for being infeasible and the costs unaffordable. A highly organised ‘Anti-Green New Deal’ coalition of fossil fuel industries, their trade unions, financial backers and congressional supporters has been organised to block any progress. In an ominous sign, the powerful AFL-CIO trade union confederation has come out against it. 

So on this reading, the GND might just be a bit of youthful left-wing exuberance, which will eventually run out of steam in a swamp of congressional obstruction. At best, it might emerge as an emaciated piece of climate policy under the next Democrat president – if there is one.  

A new economic paradigm?

But this is not the only possible reading. At another level, the GND constitutes a critical symbol for a new kind of political economy in industrialised countries.

Over recent years, it has become increasingly obvious that many advanced economies are in trouble. Since the financial crisis in 2008, average living standards have stagnated, inequalities have grown, productivity and investment has stalled and environmental breakdown has accelerated. Orthodox economic policy appears unable to cope, or to offer solutions. In this context, many authoritative voices are now arguing  that industrialised economies are in need of fundamental economic reform. The neoliberal orthodoxies of the past, it is argued, are no longer fit for purpose; and consequently a ‘paradigm shift’ in economic policy and discourse is now required.

This argument, or something like it, is increasingly being made by economists and economic institutions; alongside think tanks, media outlets and academic funders. However,  the ‘new paradigm’ has been hard to pin down. Its aims appear too numerous and its policy prescriptions too diverse. It has no name. It has been impossible to campaign on.

Enter the Green New Deal. With a single label, the GND brings together three key goals of the new paradigm, a vital political economy principle – and a clearly communicable demand.

The first goal is rapid decarbonisation. The GND is the first significant political response to last year’s report of the Intergovernmental Panel on Climate Change (IPCC) which showed that a much faster reduction of greenhouse gas emissions is required if global warming is to be held to the 1.5 degree limit specified by the Paris climate change agreement. The IPCC report led to a widespread acknowledgement that ‘something must be done’; but no government has yet come up with a policy agenda equal to the task. The GND does.  

Second, the GND makes a critical point about employment. By insisting not just on the creation of jobs, but of well-paid, unionised jobs and the rights of workers to organise around them, the GND focuses in on the huge weakness of orthodox economic policy and discourse. Lousy jobs paying low wages in insecure conditions do not make people better off.

Third, the GND’s insistence that economic policy must benefit disadvantaged communities, particularly those of race and geography, marks it out from the traditional discourse of environmentalism. It is deliberately designed to bring together these formerly estranged political constituencies. 

The political economy principle concerns the role of the state in economic policy. In the country where support for government intervention is usually weakest, the GND boldly insists that the state must motivate, guide and significantly contribute financially to the investment needed.

In putting all this together into a single narrative with a memorable name, the Green New Deal represents the very definition of a new and radical economic policy approach. It aims to tell a story about the kind of economy we need. By offering the public something concrete, nameable and communicable, it demonstrates and embodies an alternative to current economic orthodoxy.

In this sense, we can understand the Green New Deal at a third level. It is a strategic intervention in the struggle to shift the consensus of economic policy. By acting as the vanguard of a new political and economic paradigm, the GND is designed to crystallise and illustrate the argument for change. That’s why the job guarantee, and the promise of universal health care and housing, have been included in the mix. There is a deeper agenda here, to which the GND is intended to be an entry point, but not the end. As the Democrats gear up to elect their presidential candidate for 2020, the near-universal adoption of the GND by the leading contenders is a potent sign that something radical is stirring in American politics.

This piece was originally published at SPERI – Sheffield Political Economy Research Institute. You can find the original article here. Photo credit: Flickr/Matthew Roth.

The post What exactly is the Green New Deal? appeared first on The Progressive Economy Forum.