The Case for the Green New Deal. Ann Pettifor

of society and the planet.

      Environmental advocates tend to focus on individual (‘change your lightbulbs’) or community (‘recycle, reuse, reduce, localise’) action. We have been slow at understanding and promoting the need for radical systemic change across sectors and at a global and national level; that is, change that involves state action. And such structural change cannot just be undertaken at the level of international agreements on carbon budgets.

      Its ambition is on a far grander scale than Roosevelt’s 1930s New Deal (even if his administration also faced an ecological catastrophe: the Dust Bowl). The climate threats we face are of a magnitude beyond the imagination of New Dealers. However, we can learn from Roosevelt’s administration. To tackle climate change we need simultaneously to tackle the root cause of growing toxic emissions: a self-regulating, globalised financial system that pours exponential quantities of unregulated credit into the hands of speculators and consumers. This credit is used in turn to inflate the prices of existing assets, while failing to finance the creation of new tangible and intangible assets. Further, it is used to accelerate the extraction and consumption of the earth’s finite assets. Only once we switch off the ‘tap’ of ‘easy money’ will it be possible to switch off the flow of oil and other fossil fuels.

      These joined-up policies lie at the heart of the Green New Deal.

      The demand for a Green New Deal is realistic in that it harks back to an era when the global economy was transformed almost overnight by the revolutionary Keynesian monetary policies of an American president. As Roosevelt began dismantling the globalised ‘gold standard’ on the night of his inauguration, on 4 March 1933, he freed up his administration to end austerity and unemployment, then running at 25 per cent, before deploying fiscal policy to create jobs and transform the domestic economy, but also to address the Dust Bowl crisis. He affirmed, as Keynes had done, that ‘we can afford what we can do.’ Because the financial system – as a system – exists to enable us to do what we can do, no more and no less. As then, now it must be returned to its role as the servant, not the master, of the economy and ecosystem.

      The Green New Deal is, therefore, a plan. It is not an idea, nor a proposal, but a comprehensive plan for stemming the breakdown of earth’s life support systems. It is comprehensive in that its drafters understand that the earth, in all its diversity, needs a ‘new deal’, and so do the men, women and children who – in all their diversity – are the victims of ongoing global economic failure, and, now, of climate breakdown.

      The GND recognises that in the future we must derive energy only from renewable sources. We also need to expand and support ecosystems that suck huge amounts of carbon dioxide out of the air and store that carbon in trees, soils and oceans. But societies also need to end their dependence on a globalised economic system that drives climate breakdown and encourages toxic emissions; an economic system that leads to ecological imbalances alongside economic, political and social inequality and injustice. Its name is globalised, financialised capitalism.

      While there is widespread agreement on these essential elements of both the US and British Green New Deals, there are also differences.

      The US Green New Deal (2018)

      The US Green New Deal is ambitious. It is presented in impressive detail in the Resolution submitted to the US Congress by Rep. Alexandria Ocasio-Cortez, Democrat-N.Y., and Sen. Ed Markey, Democrat-Mass., on 5 February 2019.⁹ It is a comprehensive plan for achieving five major goals in the course of ‘a ten-year mobilisation’:

      • to reach net-zero greenhouse gas emissions through a fair and just transition for all communities and workers;

      • to create millions of good, high-wage jobs, and ensure prosperity and economic security for all people of the United States;

      • to invest in the infrastructure and industry of the United States to sustainably meet the challenges of the twenty-first century;

      • to secure clean air and water, climate and community resilience, healthy food, access to nature, and a sustainable environment for all;

      • to promote justice and equity by stopping current, preventing future, and repairing the historic oppression of frontline and vulnerable communities.

      The Resolution begins by acknowledging that ‘whereas the Federal Government-led mobilizations during World War II and the New Deal created the greatest middle class that the United States has ever seen … many members of frontline and vulnerable communities were excluded from many of the economic and societal benefits of those mobilizations.’

      The Job Guarantee

      The Resolution goes on to recognize ‘that a new national, social, industrial, and economic mobilization on a scale not seen since World War II and the New Deal is a historic opportunity to (1) create millions of good, high-wage jobs in the United States; (2) to provide unprecedented levels of prosperity and economic security for all people of the United States; and (3) to counteract systemic injustices.’

      A key assumption within the Resolution is that the state will provide and leverage ‘adequate capital … including through community grants, public banks, and other public financing … for communities, organizations, Federal, State, and local government agencies, and businesses working on the Green New Deal mobilization’. The formulation is deliberately vague.

      Research and policy development for the US Green New Deal is undertaken by scholars at the nonprofit think tank, ‘New Consensus’. Demond Drummer and Rhiana Gunn-Wright are leading the policy work including the proposal for the creation of a ‘green bank’. In an interview, they explained that this public bank ‘would be used to invest in zero-carbon technologies under development in the public and private sector that need to be commercialized. The bank would be designed to offer financial enhancements and support to communities that haven’t had access to clean energy and transportation.’¹⁰ But that is just the beginning. ‘Right now we’re focused on what needs to be done and how all the pieces fit together,’ Drummer explained in the same interview. ‘Then we will focus on how to pay for it. To be clear: It’s a question of how we will pay for it – not if we can afford to pay for it. America can afford what we decide to do.’

      The UK Green New Deal (2008)

      The British Green New Deal had a quite different orientation from the American version.¹¹ While the American GND is heavily focused on the domestic economy, the British version, written at the height of a globally contagious financial crisis, adopted a more internationalist perspective. We began by locating the breakdown of earth’s life support systems in the current model of financial globalisation, and argued that ‘a positive course of action can pull the world back from economic and environmental meltdown.’

      We were ambitious, too. We wanted to combine stabilisation in the short term with longer-term restructuring of financial, taxation and energy systems of the global economy. We urged the UK to take action at the international level to help build the orderly, well-regulated and supportive policy and financial environment required to restore economic stability and nurture environmental sustainability.

      ‘Financial deregulation’ had in our view ‘facilitated the creation of almost limitless credit. With this credit boom have come irresponsible and often fraudulent patterns of lending, creating inflated bubbles in assets such as property, and powering environmentally unsustainable consumption.’ We were also clear that high, real rates of interest had driven the need for excessive rates of return on investment necessary to repay costly debt. Hence the compulsion to strip the forests, empty the seas and exploit labour in order to generate the returns needed to repay debts.

      Our report therefore began with proposals for systemic change to the global economic model as an essential precondition for decelerating climate change. We understood that global transformation was necessary if we were to re-regulate the domestic financial system to ensure the creation of money at low rates of interest consistent with democratic aims, financial stability, social justice and environmental sustainability.

      Fundamental to the British GND is the understanding that over the centuries advanced societies have developed monetary systems.