Which ‘Green New Deal’ is the Real Deal?

It seems that every politician and commentator, every international NGO and every global institution left of GW Bush is trying to sell us a Green New Deal just now. Some of them are merely Grey Old Deals with a quick and fashionable paint job; some of them are Lite Green; but one or two do seem to be the Real Deal.

So – which Green New Deal should we buy into?

First, we should acknowledge one of the first people to use the term Green New Deal was Thomas Friedman , in a column in the New York Times published in early 2007.

Friedman might be considered an unfortunate source for a globally significant green policy programme – in 1999 during the war in Kosovo, Friedman notoriously suggested the US would willingly bomb Serbia back to 1950 or even to 1389 (a seminal date in Serbian history) if that country chose to pursue its warlike aims; he was quite a fan of the 2003 invasion of Iraq too. And Friedman is also something of a star among free trade and globalisation cheerleaders (he wrote The Lexus and the Olive Tree extoling the ‘golden straightjacket’ of globalisation).

His call for a Green New Deal is focussed on a range of energy policies and sustainable energy programmes to address climate change and oil dependence, out of a concern for maintaining US economic predominance. Nothing new there then: little more than a syndicated commentator’s clever phrase-making in fact.

At around the same time as Friedman’s article appeared, something much more substantial got underway when an informal group of NGO-based activists and green economists came together in the UK and took up the challenge of developing a Green New Deal in detail. In July 2008, the New Economics Foundation (NEF) published their first report: A Green New Deal: Joined up policies to solve the triple crunch of the credit crisis, climate change and high oil prices.

The NEF report states the situation plainly:

The global economy is facing a … combination of a credit-fuelled financial crisis, accelerating climate change and soaring energy prices underpinned by encroaching peak oil. These three overlapping events threaten to develop into a perfect storm, the like of which has not been seen since the Great Depression.

A dire situation such as this requires a bold policy response, and the NEf group provides just that. Proposals set out in the report include state intervention to create so-called green collar jobs and a green energy system:

— A low-carbon energy system, including making ‘every building a power station’.
— Creating and training a ‘carbon army’ of workers to provide the human resources for a vast environmental reconstruction programme.
— Ensuring more realistic fossil fuel prices that include the cost to the environment, and that are high enough to tackle climate change by creating economic incentives to drive efficiency and bring alternative fuels to market. This will provide funding for the Green New Deal and safety nets to those vulnerable to higher prices via rapidly rising carbon taxes and revenue from carbon trading.

There is considerable attention given to restructuring the financial system, with calls to:

— Minimise corporate tax evasion by clamping down on tax havens and corporate financial reporting.
— Re-regulate the domestic financial system to help those borrowing to build a new energy and transport infrastructure.
— Break up the discredited financial institutions that have needed so much public money to prop them up in the latest credit crunch. Large banking and finance groups should be forcibly demerged, retail banking should be split from both corporate finance (merchant banking) and from securities dealing, and the demerged units should then be split into smaller banks.

The report also urges action at the international level to help build the orderly, well-regulated and supportive policy and financial environment that is required to restore global economic stability and nurture environmental sustainability, including:

— Allowing all nations far greater autonomy over domestic monetary policy (interest rates and money supply) and fiscal policy (government spending and taxation).
— Setting a formal international target for atmospheric greenhouse gas concentrations that keeps future temperature rises as far below 2°C as possible.
— Giving poorer countries the opportunity to escape poverty without fuelling global warming by helping to finance massive investment in climate-change adaptation and renewable energy.

One of the co-authors of the NEF report is Caroline Lucas, member of the European Parliament and leader of the Green Party of England and Wales. Not surprisingly, the England and Wales Greens’ proposals to the UK chancellor (treasurer) follow the NEF report closely.

‘Green New Deal’ is certainly a catchy phrase and anyone hungry for a headline seemed to latch on to it. But not everyone uttering the phrase has the NEF group’s analysis of the problems we face, nor have they the vision we need to overcome such problems. Others may possess the analysis but simply fear being cast as too radical if they speak about restructuring the financial system or eradicating global poverty as critical elements of a Green New Deal. So we got a variety of lite green new deals instead:

1. The United Nations Environment Programme’s Green Economy Initiative was explicitly promoted as a transformational Global Green New Deal. The focus here is on generating a transition to a green economy on a global scale through in the context of:

— reviving the world economy creating employment and protecting vulnerable groups;
— reducing carbon dependency, ecosystem degradation and water scarcity; and
— ending extreme world poverty (ie the living conditions of 3 billion people living on less than US$2 a day).

The urgent transformation of the financial system doesn’t seem to be on the UNEP’s agenda. That may not be surprising given that the report’s research leader, Pavel Sukdev, is a senior banker with Deutsche Bank.

2. US President Barack Obama doesn’t seem to have used the phrase ‘Green New Deal’ himself, which is probably a politically wise decision on a number of grounds. Nevertheless, many newspaper pundits have attached the label to Obama’s Recovery and Reinvestment Plan. The focus is again on green collar jobs, and renewable energy systems. Obama does make mention of the financial crisis but this is only to the extent of “reforming a weak and outdated regulatory system,” not restructuring the financial system. Global poverty is not mentioned at all.

3. UN Secretary-General Ban Ki-moon spoke of the need for a Green New Deal to the self-appointed elite of business assembled at the World Economic Forum at Davos, Switzerland. His emphasis was on creating jobs and fighting climate change by investing in renewable energy and technological development. The idea of breaking up global financial system probably wouldn’t sit so well with the WEF since it is basically a club for the beneficiaries of that system, and so it does not seem to have been mentioned. However, Ban did also push for a climate change communication initiative that will explain, educate and ask for global engagement on the issue. “Climate change threatens all our goals for development and social progress,” he said – a hint at least at some sort of social concern.

4. The Green Party of Aotearoa New Zealand is promoting a Green New Deal too. This programme highlights green innovation, energy efficiency, improving public transport, and tackling poverty in New Zealand through green jobs and green housing. Global poverty action and addressing the serious flaws in the global financial system are not discussed.

Summing up
The first serious attempt to set a policy programme for a Green New Deal, found in the NEF’s comprehensive programme, has been rapidly watered down in the paler imitations that are on offer around the world. Certainly, I would not deny that proposals for government intervention to encourage and fund green jobs initiatives, renewable energy programmes, improved public transport networks and so on are positive steps. They cannot be criticised in themselves. But in themselves they are also far from enough.

If now is not the time to speak boldly, I wonder when it will be the time to speak of economic and environmental transformation. Set alongside the NEF’s radical proposals, the various lite green new deals mentioned above seem like missed opportunities.

1 Comment

Filed under capitalism, David, green politics, sustainability

One response to “Which ‘Green New Deal’ is the Real Deal?

  1. Pingback: Topics about Banking » Which ‘Green New Deal’ is the Real Deal? « well sharp