The climate news keeps getting worse: fires rage, hurricanes flood, oceans rise, even insects disappear. The UN’s International Panel on Climate Change (IPCC) tells us that we have until 2030 to make significant progress, which is even more frightening when you consider that the IPCC has consistently underestimated the effects of climate change. The climate news on the political front has not been good either: the carbon tax, which would allegedly spur the market to eliminate the human-derived greenhouse gases that cause global warming, had been a favorite of policy wonks until it had the misfortune of being implemented in France. President Emanuel Macron had to beat a hasty retreat when the ‘Yellow Vest’ movement threatened to turn into a full-scale insurrection.
In stark contrast to the reception given to the carbon tax, a youth group, the Sunrise Movement, worked with newly elected Alexandria Ocasio-Cortez to protest in Nancy Pelosi’s office in support of a subcommittee to explore the alternative idea of a Green New Deal. The media picked up on the idea, from all points in the spectrum -- the Left generally in favor, the Right aghast, the center, nervous. Several proposals have appeared since that seminal protest, but they have been lacking in detail and depth.
I have been writing about ideas similar to a Green New Deal since contributing to the environmental website Grist.org in 2007, in 2010 in the book “Manufacturing Green Prosperity: The power to rebuild the American middle class”, in a chapter in 2014 in a book co-edited by a member of the UN’s IPCC, and in various posts and articles, most recently in American Prospect. In all of these venues, I have been calling for the Federal government to spend close to 10% of GDP per year -- close to $2 trillion -- in order to directly build a green infrastructure that will guarantee that in 20 years the United States will be virtually greenhouse gas free. This will create over20 million jobs, including a revived manufacturing sector, but only if all production for a Green New Deal occurs within the United States, unlike the Obama-era stimulus in which wind turbines were made in China.
Multi-trillion-dollar levels of spending, I will argue, are necessary if we want to follow what the science is telling us needs to be done. During WWII a much less technologically advanced society managed to survive quite nicely while allocating about one third of national output for the war effort, but up until now these kinds of numbers have seemed too radical for ‘serious’ people to consider. Maybe the worsening situation will focus attention; the response to the idea of a Green New Deal shows that the public is now more open to a radical realism.
I’m still not sure that the message of direct government action has penetrated thinking on the subject, because many of the proposals so far seem to be stuck in 1990s style, market-centered solutions, even when they go under the moniker ‘Green New Deal’. Far be it from me to judge the purity of various proposals — this is a good time to entertain suggestions from many points of view, hopefully including spending $2 trillion per year — but I’d like to suggest that, if you want to use the term ‘New Deal’ in a Green New Deal proposal, you should at least follow some of the principles laid down by the original. First and foremost, the New Deal directly employed millions of people to build infrastructure and restore ecosystems, and indirectly employed millions more by managing and financing large projects that private businesses then built. For instance, the Works Progress Administration spent about 2% of GDP, which would be $400 billion now, to directly employ millions to build much of the infrastructure that is now falling apart. The Public Works Administration hired contractors to build big projects like the Tennessee Valley Authority, which helped lead to economic development and is still very effective — and is owned by the government. The Civilian Conservation Corps, the most popular New Deal program, directly hired millions more and restored ecosystems across the country. There was no talk of tax breaks or financial incentives needed to encourage innovation. The market was moribund, so the government had to pick up the slack.
The market is successful now in the sense of increasing GDP, but most of the growth is going to the top 1%, and the economy is going in the wrong direction when it comes to climate or environmental sustainability in general. Since much of the working class is being left behind, right-wing nationalists like Trump are threatening democracy across the world, and so there is a second crisis that we are confronting in addition to climate change, the reawakening of fascism.
The government is the solution, not the problem
I think that the effort to prevent catastrophic, civilization-ending climate change and defeat democracy-destroying fascism will turn on the extent to which the public decides to grant government the capacity to solve these problems or leaves them to the tender mercies of the market – read, big corporations. As Thomas Friedman remarks, it would be easier to let ‘Father Greed’, as he puts it, solve the problem – easier, but it wouldn’t work. Paul Krugman wants to provide ‘positive incentives like tax credits or not-too-onerous regulations’, but those market centered ideas are too late. The government ‘doing something’ should not mean that the government does something to help the market to do something. Sometimes the government has to directly create wealth, a process that has going on since the start of civilization – successful governments always build infrastructure, which is the foundation on top of which the market operates. Now, however, the chickens are coming home to roost, both environmentally and politically, and the government must take the central role in determining the shape of the economy – even in the era of shutdowns, Republicans, and Trumps.
As I explained in American Prospect, throughout American history bursts of infrastructure building by the Federal government have laid the foundation for long-term, widely shared periods of economic growth and prosperity, partly by providing a market for an expanding manufacturing sector. As economic and technological conditions change, it is incumbent on governments to reconstruct their infrastructure and manufacturing systems if they want to retain national power vis-à-vis other countries and if they want their citizens to enjoy a constantly rising standard of living The Green part of the Green New Deal is necessary because, like past civilizations, ours will also collapse if we don’t seriously adjust our infrastructure and production in an environmentally sustainable manner. The science now exists to tell us what we have to do, the engineering is available to do it, but our ideological, economic and political systems are operating in a self-destructive way.
This would therefore be a propitious time for the Democratic Party and the left in general to advocate for a Green New Deal what would implement what FDR conceived of as an extension of the New Deal, his Economic Bill of Rights. The knock on the Democratic Party is that it can’t clearly articulate what it stands for, except to be against Trump. Seventy-five years ago FDR laid out a possible solution. He proposed the following new rights: a job with an income above the poverty line; decent housing; a good education; adequate health care; a basic income if you can’t work or wish to retire; avoiding monopoly; and a decent living for farmers. Another right that emerges from this list that FDR did not make explicit is the right to not live in poverty. The Green New Deal that I present here will describe programs that would lead to the fulfillment of these rights, and I will also detail how these programs will eliminate the use of greenhouse gases and restore our collapsing ecosystems (details are available at GreenNewDealPlan.com, including details on the estimates which are meant to be suggestive, not authoritative)
Blowing in the wind
Renewable electricity should be at the center of a Green New Deal. Once an adequate electrical system is in place, renewable electricity can be used to replace the fossil fuels that are not used to generate electricity. Transportation, industry and buildings constitute fully 57% of fossil fuel generated greenhouse gas emissions. The fossil fuel generation of electricity now constitutes about 27% of total emissions, and fossil fuels in total are responsible for about 59% of emissions, the rest mainly coming from deforestation and agriculture (I calculated these figures using the 2004 IPCC report). Substituting renewable electricity is only one piece of the puzzle of decarbonizing the economy, but it is a critical one, without which the other sectors can not eliminate emissions.
An Interstate Renewable Electricity System, modeled after the beloved Interstate Highway System, would replace all of the coal, oil, natural gas and nuclear power plants that generate electricity. This system would also include a new, state-of-the-art ‘smart’ national electrical grid that would replace the hodge-podge mess that is our current system. I calculated it would cost about $250 billion per year to build the necessary wind farms placed strategically around the country, which would create over 2 million jobs, including over one half million manufacturing ones. More could be spent for solar-based farms and other renewable sources like deep geothermal, but there should be no need for using biomass or more hydropower, which lead to ecosystem destruction. I also discount technological fantasies like so-called ‘carbon capture and storage’ or ‘new nuclear’.
I think an important part of planning for a Green New Deal is to assume that we can only use the technologies that we currently have. It’s all fine and good to encourage innovation, but the whole point of innovation is to create something that doesn’t exist now, so obviously you can’t plan for it. You can predict that the cost of, say, solar and wind will decline at a similar rate to years past. Cost considerations are important. However, as any engineer knows, there are always trade-offs, depending on the requirements for a particular project. What you often see in discussions of renewable electricity is the question of whether renewable energy costs more than fossil fuels. The assumption of a Green New Deal is that this question is irrelevant, because the design requires that virtually no greenhouse gases be emitted, eliminating fossil fuels from any discussion of alternatives. If the consideration is to prevent the destruction of life on the planet, which seems reasonable, then one would also eliminate the use of nuclear power as a long-term solution (it might make sense to keep nukes going until the Interstate is constructed).
Articles on the subject of renewable electricity usually assume that there will be an ‘intermittency’ problem, that is, they worry that the wind doesn’t always blow and the sun doesn’t always shine. But in the case of wind, there is always enough wind blowing somewhere in the continental United States to generate most of our electrical needs. With solar helping out during the peak demands during the day, an all-renewable system could be created without problems of intermittency. But in order to take advantage of a continental design, the government would have to design a national system that placed wind farms in the right places, not the market. The market, no matter what the incentives, cannot plan and finance at the continental level, at a long-term time scale of centuries. An ad-hoc set of wind farms and solar built as the result of market incentives would probably have intermittency problems, be more expensive, and take longer to construct.
When we know what needs to be invested in, governments building infrastructure should be cheaper than using the market because there is no need to include profit or exorbitant managerial salaries into the cost. The social benefit of profit, theoretically, is to provide money for investments that help the economy. But if we know where investment money should go, we don’t need to pay for someone else’s profit.
Most market activity assumes that some kind of infrastructure already exists. The cell phone can’t work without an internet, cars can’t drive without a road. In the same way, designing a sustainable economy requires the existence of something like an Interstate Renewable Electricity System, which then feeds the transformation of two other sectors of the economy, manufacturing and transportation.
Manufacturing clean manufacturing
Emissions from manufacturing account for about 28% of greenhouse gas emissions. Once the electrical system is renewable, almost 40% of industrial emissions disappear, because almost all industrial machinery uses electricity. So if the electricity is clean, manufacturing can expand without worsening the climate problem. However, the source of almost half of manufacturing emissions is fossil fuel used for heat – for instance, making steel, or natural gas used to heat chemical processes. In order to eliminate these emissions, the machinery used in manufacturing must be changed to use electricity instead of fossil fuels. The rest of the manufacturing emissions come from nonfossil fuel processes like making cement, and these would also require new machinery. In fact, most industrial machinery will have to be replaced if we want to create a sustainable economy, because the other ecological threats emanating from manufacturing are the use of mining products as inputs, and the pollution of air and water as outputs.
A natural ecosystem like a forest operates as a giant cycle of nutrients and materials, with some being used for inputs, and the outputs of waste products or dying organisms also being recycled back as inputs. Rarely is a natural ecosystem destroyed because finding inputs is destructive or because of the effects of outputs. Human economic ecosystems, however, destroy natural ecosystems in order to mine to get materials for input, and destroy natural ecosystems by polluting as output (the subject matter of Annie Leonard’s movie “The Story of Stuff”). Engineers and others have recognized for a long time that we have to convert our economic ecosystem to behave more like a natural ecosystem, and a Green New Deal is an excellent opportunity to transform our manufacturing processes. This requires that products be designed and manufactured so that they can be recycled and reused, just as a natural ecosystem recycles and reuses – this philosophy has been called ‘cradle to cradle’. In addition, the manufacturing processes must output ‘zero waste’, as it is called, that is, machinery must be designed with the requirement that there be no pollution in the manufacturing process.
All of this will require trillions of dollars of new industrial equipment, since the stock of industrial equipment in the U.S. is currently valued at about $1.5 trillion, and that figure probably needs to double in order to handle all the new manufactured goods that a Green New Deal will require in order to build a green infrastructure – since all those goods would be produced in the United States. Let’s assume a Green New Deal includes $100 billion per year to help pay for most of this reconstruction, including about 2 million very good jobs constructing the machinery. This would not be as unprecedented as it sounds, as the Federal government paid for most of the machinery used to create the military equipment during World War II, and the corporations bought the factories for pennies on the dollar after the war ended. In other words, not only did the New Deal create new infrastructure, the government in WWII financed the creation of much of the industrial machinery that was the basis for the shared prosperity of the post-WWII boom – when America, was, um, oh yes, great.
As I argued in “Manufacturing Green Prosperity”, the key to national economic power and a wealthy middle class is a large manufacturing sector, and in particular, an economy with a thriving industrial machinery sector. This is the reality in Germany and Japan, the long-term target of China’s economic policies, and the situation that the U.S. used to have up until the late 1960s, when about one quarter of the economy and one quarter of the working population where involved in manufacturing. The United States produced about half the world’s industrial machinery throughout the first half of the 20th century, and it used that dominance to build the history’s most powerful military and history’s most powerful economy. But now the industrial machinery share is below China’s 15% and going down. A Green New Deal that required the reconstruction of factories would reignite the industrial engine of widely shared economic growth, and do it in such a way that the environment would not be destroyed in the process.
Another benefit of a Green New Deal is to ease what has been called a ‘just transition’ for workers from industries that would decline, such as fossil fuel industries, to rising sectors, such as renewable energy. In fact a comprehensive Green New Deal proposal has an advantage over most current ‘just transition’ discussions because there would be enough planning to ensure that workers in particular facilities could transfer directly to another facility, after a period of retraining. Seymour Melman and other advocates of what came to be known as ‘economic conversion’ proposed a similar concept for potentially moving workers and engineers from military factories to civilian work. The idea is to set up what Melman called ‘alternative use’ committees in each facility, which would draw up plans for a two year transition to other lines of work. In the case of the Green New Deal, there could be planning to train fossil fuel industry workers to work in specific new renewable energy factories, such as for wind turbines, or in new industrial machinery factories. In fact, national planning could spread out the placement of factories and other production facilities around the country to make sure that all parts of the country gain from a Green New Deal — thus engendering the support of all regions, red and blue alike.
A revived manufacturing sector would lead to a revived working and middle class, because as Melman explained, high-skill manufacturing leads to a process of economic growth that gives workers more power, economically and within the firm – even with mechanization and automation. It was the outsourcing of manufacturing jobs that has been the cause of so much devastation in both white and Black communities, not technology. Before the current opioid epidemic caused by deindustrialization in mainly white working class communities, the loss of factory jobs in Black urban communities in the 1960s devastated millions of families. But now we have the opportunity to bring back an industrial middle class in both communities, as well as engineering jobs, and reverse much of the income inequality that deindustrialization has created.
A central tenet of a Green New Deal should be that all goods used to build the green infrastructure would be required to be manufactured in the United States, and after a few years of rebuilding the American machinery industries, all industrial equipment used for the Green New Deal would have to be built here as well. A Green New Deal would be part of a comprehensive industrial policy that would revive the manufacturing sector and the jobs that go with it.
Thus, as in the case of renewable electricity, what seems like a crisis – we need to transform the electrical generation and industrial sectors – instead becomes an excellent opportunity to reboot the economy and improve the standard of living of the population as a whole. Environmental writers often argue that a Green New Deal could create more jobs, but the advantage of explicitly discussing the various sectors that must be converted is that the numbers and kinds of jobs that can be created can be made clear, and thus hopefully attract more public support.
Back to the future of trains and walkable neighborhoods
‘The right to a decent home’, as FDR put it in his Economic Bill of Rights, could be another crisis-turned-opportunity. Transportation causes about 13% of greenhouse gas emissions globally, and 28% in the U.S. The cars, trucks, planes and ships that make up the bulk of the problem are almost exclusively powered by oil. It might be more economically and ecologically sustainable, in the long-run, for the Federal government to construct walkable neighborhoods by building millions of residential units, which would not require the use of a car, then to attempt to electrify them.
I experienced an example of this when my family and I moved to Evanston, Illinois for a couple of years. The downtown had been devastated by malls, like thousands around the country. We moved into a 250-unit, comfortable and affordable apartment building that had replaced a parking lot downtown, and along with new large stores that the apartment building helped support, the downtown came back to life. This example could be repeated across the country, in large towns and cities and small, breathing life back into the main streets that were destroyed by malls and the likes of Walmart.
What made the revival of Evanston’s downtown possible was the excellent transit systems that reached from Chicago to the northern suburbs (in fact, Evanston had been one of the first ‘railroad suburbs’ in the late 1800s). Therefore, the creation of walkable communities would also require extensive, comfortable, and affordable transit, both within cities and among cities and towns.
Of course, a transit-friendly, walkable community — what we used to call cities and towns — has been displaced by sprawl, or less negatively, suburbs. Whatever you call it, it would not have existed without the equivalent of trillions of dollars of Federal government spending. There was the virtual invention of the 30-year, government-backed mortgage, the G.I. Bill that provided loans to millions of returning soldiers to buy homes (and make builders like Fred Trump rich), the build out of suburban water and road infrastructure, and the aforementioned Interstate Highway System. So would it really be so unprecedented if, for about $250 billion per year, the government built good housing for a quarter of households, over 25 million, and built/rebuilt transit systems for about $100 billion more? That kind of money could place 10,000 250-unit apartment buildings all over the U.S., the construction of which would provide at least five million good jobs distributed among all communities, including half a million more for transit.
Creating this much housing would reverse what Elizabeth Warren called the ‘two income trap’ in her breakout book of the same name — the increasing need for families to buy more and more expensive housing, particularly in job-rich central city areas, and particularly to be able to place their children in ‘good school districts’. The standard of living of much of the population has gone down because of the need to spend so much of their income on renting or owning. According to polling, 30% of the population would like to live in walkable neighborhoods, but only 5% do. Clearly, once again, the market has failed, and only the government can fix the problem — including by substantially more spending for education, as I will further explain below.
But what about the 70% who don’t want to live in a walkable neighborhood, that is, they want to use cars to get around? It might be the case that, once people saw that ‘walkable’ living was affordable and comfortable — unlike life in city apartments that has been constantly portrayed as tight and noisy and unpleasant in movies and TV — then perhaps at least another quarter of the population would want to live, if not in NYC-style neighborhoods, at least in ones in which a small electric car would suffice for many trips, and where it might be possible to easily drive into town and take transit for longer local trips.
According to the civil engineers at StrongTowns.org, most American towns can not afford to maintain their extensive infrastructure. For example, the tax revenues on any particular road are usually not high enough to maintain that road, not to mention the area’s water systems. So slowly but surely, suburbs around the country are heading towards bankruptcy. Replicating the Evanston example – called infilling -- would help with this problem, but at least for the suburbs that are close enough to functioning or potentially functioning downtowns, a Green New Deal could rebuild their water, road and other infrastructure, say at $100 billion per year, and help them convert to electric cars, which ultimately would be cheaper to maintain than gasoline-propelled ones. If all of this building decreased the car total from over 200 million to 100 million, then $100 billion per year for 20 years would provide a whopping $20,000 per electric car, which could cover most of its cost plus a home charging station. Such a deal!
Decreasing the car population would necessitate another ‘just transition’, because a car-based economy creates millions more jobs than a train-based economy. This is because cars are perhaps the least efficient technology yet invented in the history of the Earth — they are not used 95% of the time, they waste 99% of their energy when they are used, they require about one third of precious urban space, and they increase the national medical bill and mortality by ending the life of 100 people per day plus even more crippled and injured. So in addition to a more efficient and healthier society, the electric car, transit, suburban infrastructure, and housing production employment would more than make up for the jobs lost producing and maintaining cars and their accessories.
The crown jewel of a train-centered economy, and a source of up to 2 million good jobs, would be an Interstate High-Speed Rail System, costing about $100 billion, which could follow much of the routes of the Interstate Highway System, and use the electricity from the Interstate Renewable Electricity System. This system could replace virtually all intra-continental air traffic and long-distance trucking. I think it’s completely unrealistic to think that we can make electric jets, since the batteries would be too heavy. Perhaps we could grow enough truly sustainable biofuel to handle cross-oceanic traffic (We might also produce such biofuel for the use of some cars in rural areas). An Interstate would mean that all travel could use renewable electricity within any continent, including freight. Long distance trucking could be replaced with high-speed freight rail, with truckers ‘just transitioned’ to much better jobs than what is turning into a more and more exploitative profession. Small electric trucks could be used from the train station to delivery point, yielding a much more efficient way of transporting freight.
Another advantage of apartment buildings is that they use much less heat than single family homes, because they have other apartments on most of their sides. Since 9% of greenhouse gas emissions are from fossil fuels used for heating buildings, the national heating bill would decrease if the walkable neighborhood program was implemented. However, suppose we want to make most buildings energy self-sufficient, since that would take quite a load off of the Interstate Renewable Electric System. Then we could apply efficient insulation (retrofitting) around the buildings, geothermal heat pumps that drastically reduce electrical needs for heating and cooling underneath the buildings, and solar panels, where possible, on top of the buildings. I estimate that this would cost in the neighborhood of $200 billion per year, employing about 4 million people in the neighborhoods where the systems would be installed.
Food that doesn’t kill the planet
While much of the planet’s ecosystems have been plundered by mining for industrial raw materials for use in manufacturing, much of the rest has been destroyed for agriculture, and in particular for the production of beef. Just as cars and suburbia are a choice, not a necessity, so the form of our agriculture is a choice. 77% per cent of agricultural land is used just for livestock to graze and to grow the grains raised to feed them, yielding just 17% of all calories, and 33% of all protein consumed in society. The passing of gas and belching of cattle accounts for about 4% of greenhouse gas emissions, and their manure for another 2%. Just as cars are extremely inefficient, so growing crops to obtain beef is about the most inefficient way of creating food that humans have invented: One kilogram of beef requires 15,000 litres of water and 25 kilograms of grain.
The worst aspect of agriculture is the destruction of forests in order to make room for livestock and their feed grains, particularly for cattle. Deforestation and the burning of forests accounts for about 16% to 17% of greenhouse gas emissions, although in the United States, reforesting is actually helping to soak up carbon.
In other words, deforestation, mostly for cattle, produces almost as many greenhouse gases as the coal plants used to generate electricity, and a bit more than the entire transportation sector.
The use of pesticides and fertilizers is killing the soil, which causes about 5% of greenhouse gas emissions, and they are degrading the water that is the basis for all life in all ecosystems, as well as generating ill effects on human health. The Federal government could subsidize farmers and urban gardeners to produce organic fruits and vegetables instead of what they are doing now, paying them to produce grain for livestock and for the corn to make chips and soda.
In addition to these changes in agriculture, if there was a Federally funded residential recycling system that could include compostable food waste, then we could eliminate the 3% of greenhouse gases generated by landfills, the compost could be used to restore the agricultural land that is deteriorating, and the rest of the recycled materials could go back into the green manufacturing system outlined above. I estimate that to hire enough people to recycle all materials would cost on the order of $100 billion per year. At least $50 billion per year could make the entire agricultural industry organic and convert livestock raising to be less destructive. An environmentally benign agricultural system is more complex than a monoculture and chemical-based agriculture, and requires a great deal more skilled agricultural jobs.
We could also revive the Civilian Conservation Corps with the goal of restoring ecosystems, at a cost of about $50 billion per year, as in the New Deal (perhaps all Native Americans could be guaranteed one of these jobs if they so desired).
Deforestation is a global agricultural problem that is mostly occurring outside the United States. So a Global Green New Deal would need to be implemented, similar to calls for a Global Marshall Plan, which would involve generous funding of Green New Deals in developing countries in return for the protection of their forests and other ecosystems. We could start with a budget of $100 billion for a Global Green New Deal Plan, matched by other developed regions like Europe, which would be used to produce industrial machinery that would be sent to developing regions in order to create green industrial and agricultural sectors. Thus fixing our broken agricultural system by protecting forests could help our manufacturing sector by increasing demand for green industrial machinery.
Contrary to what mainstream economists say, a market-centered economic system has not led to an efficient civilization. If anything, between the cars, burgers, single family homes, and unhealthy food, our modern civilization is less efficient than earlier ones. What has changed is that we make all of this self-destructive economic output extremely efficiently. The parts of the system are made very efficiently, but the system as a whole is about to destroy itself.
Workers of the world, educate
The Green New Deal needs one more set of programs to further create economic virtuous circles — those centered on what we might call ‘human capital’, that is, increasing the wealth-generating capability of people, in addition to what we can call ‘physical capital’, the machinery and systems that are physical in nature.
The great 21st century potential advancement in human capital has been the construction of the World Wide Web, based on the physical internet, developed with government research money. What we need is a new backbone for the system, an Interstate High-Speed Internet System, that might cost about $10 billion per year for 20 years to build out, and which would provide much better and faster service, more cheaply, for everyone in the country, including rural and poorer urban areas. This in turn could reinforce the benefits of expanded Federal support for education— including the free public college tuition proposed by Bernie Sanders, free pre-K as implemented by NYC Mayor de Blasio, free childcare, support for technical schools, and continuing education throughout life. A commitment of Federal aid to public schools would help improve urban schools in particular, as mentioned above, including $20 billion to fix up school buildings.
Increased spending of about $100 billion per year for new education efforts would also help provide the skilled personnel and engineers needed to build the physical systems of the Green New Deal. Since manufacturing has declined, the number of engineers and skilled industrial workers has declined as well, so if we need more manufacturing and more infrastructure, we will need to quickly train many more engineers and skilled industrial workers.
A Green New Deal could spend $100 billion per year to create a Medicare for All system, which should include a network of community health clinics that would encourage healthy eating and exercising (I’m assuming employers would pay for most of the expansion of Medicare by paying their health premiums to Medicare instead of private insurance companies). Combined with the positive health effects of the rest of the Green New Deal, such as better food, less pollution, and more walking, the national medical bill should plummet, making a Medicare for All system even more affordable.
A New Deal that is greater than the sum of its Green parts
The market can’t plan a network of infrastructure systems at a continental scale and a decades-long time frame needed to reconstruct a sustainable economy. You can’t plan a manufacturing or transportation sector that converts to all-electric use if you can’t guarantee that enough electricity will be generated and that all the electricity will be greenhouse-gas free. Only the government can plan and implement a comprehensive set of infrastructure projects at this level of complexity.
If we can plan for the construction of all these systems, we can also plan for an economy in which so many jobs would be created that the Green New Deal would effectively act as a job guarantee, just as the all-out war effort during WWII led to virtually no unemployment. However, if for some reason there was still some unemployment, the Green New Deal could provide temporary jobs to those who wanted them. Since a Green New Deal economy would sustainably generate so much wealth, it would also be easy to expand Social Security to provide a comfortable basic income for those who could not work or were retired. This combination of good jobs and basic income would end poverty in the United States.
Economic growth would not lead to environmental catastrophe because virtually no greenhouse gases would be emitted after 20 years. Since there would be little mining, no pollution, and ecosystems would be protected instead of being destroyed, greater economic activity would not result in greater damage to the long-term foundation of the economy, the environment. In fact, restored ecosystems could be an affordable travel destination using electric high-speed rail, and would be a benefit for rural and urban residents alike.
All of these systems acting together would ignite an era of infrastructure and manufacturing based, widely shared growth. The market will continue to create most of the economic activity in the society, but it will be a market and government-centered economic system, if we want to survive as a technologically sophisticated, democratic society.
OK, so how are you going to pay for it?...
Just as the New Deal had to create a new way to find new money by inventing deficit spending, so a Green New Deal needs to engage in some financial innovations to expand spending by up to $2 trillion. A Federal Infrastructure Bank could do what private banks do all the time and create enough money to provide at least one third of the needed money. Every year, on average, private banks create about $500 billion every year out of thin air.
For another third, we could go back to the New Deal days of fair taxation of the very rich and corporations, with a combination of higher marginal tax rates for the rich, taxing capital gains like other income, a financial speculation tax, and other alternatives. One thing I don’t think a Green New Deal should do, however, is increase taxation to the middle class; if anything, as I will explain, a Green New Deal could lead to lower taxes.
The last third of the money could come from redirecting what we currently spend: for example, the Treasury could print the money to pay for the current $300 billion in debt interest. Creating money in this way would not be inflationary since those interest payments are not used by rich people and foreign governments to chase goods and services, which would cause inflation; instead that money goes back into the financial system, which is why the quantitative easing program, used to end the 2008 financial crisis, injected trillions into the economy with no inflation.
We could also redirect a few hundred billion of the military budget towards the existential crisis of climate change by engaging in Melman’s economic conversion policy in order to create a just transition for workers in military industries. Melman argued that military production warped civilian manufacturing competence, as we see in the case of $640 toilet seats. So retraining engineers to make high-speed locomotives instead of tanks would have the benefit of helping the manufacturing sector as well. The Army Corps of Engineers, which builds quite a bit of infrastructure, could become the largest part of the Army, the Navy could be used to patrol the world’s oceans to prevent overfishing, and the Marines could help protect forests. Different missions, better results.
A Green New Deal could show that the government has another economic role, in addition to regulation and fiscal policy: directly creating wealth in the form of infrastructure. If these green infrastructure systems where created with new money from the Infrastructure Bank, not with debt that has to be paid back, all the wind turbines, high-speed trains, apartment buildings and other revenue-generating assets could be used to either decrease middle class income taxes or lower the prices for these services or both, improving everyone’s standard of living. The wealth creating capacity of the Federal government would be a great new tool in its economic toolkit.
…and who is going to vote for a Green New Deal?
The political consequences of a Green New Deal would blunt the revival of right-wing nationalism, offering a better alternative to the ‘neoliberal’ market-centered economic orientation of both parties. As a result of the inaction of the Federal government, the U.S. market did what markets often do — it liquidated its manufacturing sector and converted that wealth into financial power, leaving behind most of the population. A similar process occurred in Great Britain, which led to the recent Brexit chaos. The extreme right sold much of the public on the idea that immigrants were the source of their continuing woes, and neoliberals peddled the idea that automation did it, instead of blaming the corporations that shut down the factories. By engaging in a diverse set of ‘deals’, a large coalition of political forces can be put together that will overcome the intense opposition of all those who profit from frying the planet and destroying the middle class.
A Green New Deal would be a great ‘deal’ for most of the population because it would engage in universal policies that would benefit almost everybody, fulfilling the promise of FDR’s Economic Bill of Rights. It would ensure a good job for everyone, and a comfortable basic income for those who can’t work or are retired. It would build millions of new residences and bring the cost of housing down to an affordable level. Electricity would be cheaper or would lead to lower taxes, and high-speed rail and transit would make travel easy and affordable. Not only would Medicare for All finally make health care affordable, less health care would be needed because the pollution from fossil fuels and manufacturing would be eliminated, the water and air would be clean, the food would not be laced with pesticides, fruits and vegetables would be cheaper, more people would be walking, and less people would come to harm from driving. Public education would be free through college, and schools in all communities would be fully funded. Small farmers, including urban ones, would be able to thrive again.
There could also be several ‘deals’ between specific voting blocs. For instance, in return for their support for a Green New Deal, rural residents would get a CCC, well-maintained infrastructure, more support for small farmers, and perhaps even some ecotourist income. The working class of all communities, white, Black and Latino, would have a reason to work together because a Green New Deal would hold out the promise of good factory jobs again as an economic foundation of their communities, including all the neighborhood construction jobs a Green New Deal would create. Suburbs would get help making their houses energy self-sufficient, plus the benefits of a good, affordable transit systems, the subsidization of electric cars, and help rebuilding their infrastructure. Engineers would be in high demand. Thus we are talking about a government-led growth program, the Green New Deal, that the Right will label as everything from Communist to Fascist, that can appeal to much of their conservative base, that is, parts of the white working class, rural voters, suburban voters and even engineers.
On the other hand, the traditionally Democratic voters will also benefit. Whenever labor markets are tight, bigotry falls by the wayside, as happened during World War II when women and people of color were hired in great numbers to work in what had formerly been a white male preserve, the factory. The original New Deal was very discriminatory because of the perceived need to retain the support of Southern congressmen, but a Green New Deal can codify fair practices, and will automatically level the playing field by giving workers much more power, including requiring that workplaces funded by the Green New Deal be unionized. In addition, urban professionals would have cheaper housing, better transit, and more job opportunities in a booming, high-tech economy.
A Green New Deal might even appeal to some part of the business class, because between all the government contracts and the working people with more money in their pockets, a new economic boom would be quite possible. Previous generations of Republicans might have even warmed up to at least part of a Green New Deal, because the Republican party started out life as a party of ‘economic nationalists’, that is, they wanted to build up the economic power of the United States. But if history is any guide, large scale change scares particularly those at the top, who figure that they have the most to lose. And at some point the U.S. ruling class moved from building up the country to trying to tear it down to sell off to the highest bidder, particularly its manufacturing base. An integral part of the process of liquidating the country is to destroy the government’s capacity to build up the country, and so we have been subjected to 40 years of anti-government rhetoric. But perhaps there are still some Republicans and independents who are worried enough about national economic power to overcome their skepticism of a strong national economic set of policies.
If a green infrastructure is built by following the findings of science, the market can continue to create economic growth indefinitely as it follows the pathways of economic activity that the green infrastructure provides, as water flows within river banks. But this will require that citizens demand that government take a permanently larger role in the economy, not as regulator or redistributer, but as builder.
Our high-tech world is incompatible with the economic status quo. If we don’t reconstruct the physical foundations of our economy in a way that follows the science, this global civilization will follow all the others into the dust bin of history. Far from automation leading to less work to do, constructing a civilization that is environmentally sustainable will require much more work in the form of good jobs for everybody. By the time these projects are finished, the cost of energy, transportation, housing, the internet, food, health and education will go down and the quality will go up, greatly improving the standard of living of the bottom 90%. Progressives and Democrats have nothing to lose but their self-imposed mental chains. The just thing to do is the realistic thing to do: a Green New Deal.