Financing the Green New Deal

A Plan of Action and Renewal

Robert C. Hockett

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN: 9783030484491
• eBook ISBN: 9783030484507
• Topic: Economics
• Subtopic: Energy Industry
• Index: Economics

Climate scientists have determined that we must act now to prevent an irreversible and catastrophic climatic tipping point, beyond which neither our own nor many other species can be assumed likely to survive. On the way to that bleak ending, moreover, extreme socio-economic injustice and associated political breakdown—now well underway in nations already hard-hit by environmental crisis—can be expected to hasten as well.

The time has thus come to plan carefully, thoroughly, and on a scale commensurate with the crisis we face. This book, written by one of the key architects of the Green New Deal and prefaced by Representative Alexandria Ocasio-Cortez's former Chief of Staff, indicates how to structure Green New Deal finance in a manner that advances the cross-cutting goals of maximum financial and economic inclusion, maximally democratic decision-making, and an appropriate division of roles both among all levels of government and among public and private sector decision-makers.

Integrating into one complete and coherent financial architecture such bold ideas as a 'People's Fed, 'an interdepartmental National Investment Council, integrated state and regional public banks, a Democratic Digital Dollar and digital Taxpayer Savings and Transaction Accounts made part of the monetary policy transmission belt, and an economy-wide Price Stabilization Fund, this book is critical reading for policymakers and citizens looking for a fresh path forward towards a revived and sustainable, progressive and productive America.

© The Author(s) 2020

R. C. HockettFinancing the Green New Dealhttps://doi.org/10.1007/978-3-030-48450-7_1

Begin Abstract

1. The Green New Deal in Brief Outline

Robert C. Hockett¹

(1)

Cornell University, Ithaca, NY, USA

Robert C. Hockett

Email: [email protected]

Keywords

Climate changeEnvironmental justiceGreen New DealInfrastructureNew DealPublic investment

End Abstract

The finance plan elaborated in this monograph must be understood in relation to what it is meant to finance—the Green New Deal. The aims, ambition, and structure of the former are outgrowths of the aims, ambitions, and structure of the latter. It will accordingly be helpful concisely but comprehensively to recapitulate the first before elaborating the second. We can best order that recapitulation, in turn, by reference to what’s ‘green,’ what is ‘new,’ and what’s ‘dealt-with’ in the Green New Deal.

1.1 ‘Green’

During their first weeks in the new U.S. Congress circa January and February of 2019, U.S. Representative Alexandria Ocasio-Cortez, Senator Edward Markey, and their colleagues did something no other American political figure had managed for decades. They got their whole country, and indeed much of the world, talking about massively transformative public investment as a real prospect.¹

The Green New Deal exceeds in scale and scope all major undertakings of U.S. federal, state , and local governments since both its namesake—Franklin Roosevelt’s original New Deal—and the mobilization effort for the Second World War in 1940s, respectively.² And this is true irrespective of what measure of ‘size’ one might use—geographic and cross-sectoral scope, number of firms and sub-federal units of government that will be playing a role, segments of the population who will be playing a role, dollar value of real expenditures , dollar value of expenditures as a percentage of GDP, and so on.³

Ambition on such a scale has, at least since the time of President Eisenhower’s ambitious interstate highway system and President Kennedy’s space program, tended to draw fear and naysaying from the timid, the cynical, and the financially uninformed. The Green New Deal has been no exception. Predictable expressions of skepticism and incredulity, along with familiar ‘what about partisan gridlock’ and ‘how will we pay for it?’ queries, have abounded since early 2019. Even some self-styled progressive politicians have hedged their bets, approving ‘the concept’ while studiously shying away from declaring on any particular instantiation.⁴

Against such a backdrop, one does well to recognize that ‘size matters’ where the Green New Deal is concerned—and matters in ways that the politically demoralized, the fiscally austere, and tepid allies alike tend to miss. The problems the Green New Deal addresses, in short, are problems where bigger is better, is imperative, and is, paradoxically, more politically feasible and ‘affordable’ too where responding to crisis is concerned.

To begin with the imperative part: The overwhelming weight of climate science prediction avers that average global temperatures have now crossed a threshold, and are still climbing at a rate, that leaves no option now but to reverse course on carbon emissions post haste.⁵ The consequence of inaction will be the extinction of both the human and other species of life, while the consequences of further foot-dragging will be astronomically high costs brought on by continuing and ever more frequent environmental calamities.⁶ It will ‘cost more’ to do nothing or not enough, in other words, than it will to do what needs doing. Where climate change is concerned, the question we face now is accordingly not whether or even when, but is how—and how quickly—to address them.

Enter the Green New Deal. What separates its advocates from generic progressives and even earlier generations of climate advocates is its recognition that climate change must now be reversed urgently, quickly, and comprehensively. The Green New Deal’s advocates also recognize more—namely, that ‘going big’ here is actually to go more politically and fiscally feasibly too. That is part of what makes the Green New Deal ‘new’ and a ‘deal,’ the next two subjects to be taken up below. But it also results in the Green New Deal’s being far more comprehensively ‘green’ than that word alone might initially suggest.

As advocates envision it, the Green New Deal will comprise a full portfolio of mutually complementary and critically necessary mitigation and renewal projects, now known as the Green New Deal Project Fields .⁷ All of these, advocates aver, will contribute to the restoration of both a healthy planet and a just, prosperous, and sustainable economy that treats (a) all Americans as valued members of society and (b) the environment as their home. These Project Fields include, among others:

• Building ‘smart,’ energy-efficient national power grids to enable transition to renewable power, including energy storage modalities and technologies as well as improvements that complement other Green New Deal projects;
• Overhauling American transportation systems to eliminate greenhouse gas emissions and capture as much energy efficiency as is physically possible;
• Replacing fossil fuel power generation with wind, solar, hydro, and other renewables. Also expanding existing renewable power sources and deploying new production and storage capacity to meet 100% of national power demand through renewable sources;
• Upgrading every residential and industrial building for state-of-the-art energy efficiency, comfort, and safety. This will open millions of new high-wage jobs in every community and will be designed to foster ownership by communities, with the work being done by local firms, organizations, and co-ops. It will also make startup capital available to people who want to form new firms and co-ops, and take care to invest especially in communities that have been denied capital and development for generations;
• Investing in and working with U.S. industry to eliminate greenhouse gas emissions from production and to capture as much energy efficiency as is physically possible. This will involve massive investments to industrial firms to undertake energy efficiency upgrades and do the work of transitioning away from fossil fuels;
• Investing in and working with American farmers to reduce greenhouse gas emissions from agriculture and capture as much energy efficiency as is physically possible, and to encourage transition to more sustainable, locally focused agriculture. Also working to improve the health of farmers and farm workers and the quality of area food supplies;
• Making adequate capital, technical expertise, and other forms of assistance available to all communities, organizations, and business firms in the nation; also investing in technological R&D to support all Green New Deal projects—for example, in battery technologies, energy efficient materials, etc.;
• Upgrading water infrastructure to ensure universal access to clean water in every community; also carrying out coastal remediation projects and other overdue ecosystem projects to protect and heal e...

Table of contents

• Cover
• Front Matter
• 1. The Green New Deal in Brief Outline
• 2. What a Green New Deal Finance Plan Should Do
• 3. A Green New Deal Financial Architecture
• 4. Comparison to Lesser Alternatives
• Back Matter