The Green New Deal’s Magical Realism

2019-02-192019-02-28 Sean Sweeney

When young activists from the Sunrise Movement and Justice Democrats occupied House Speaker Nancy Pelosi’s office in late 2018 to deliver a draft Congressional resolution calling for the development of a “Green New Deal” (GND), they probably had no idea that it would spark a massive global reaction.

Driven by newly elected Congresswoman Alexandria Ocasio-Cortez—the youngest person ever elected to the U.S. Congress and, like Bernie Sanders, an open socialist—the draft Resolution called for the formation of a “Select Committee” with authority to “develop a detailed, national, industrial, economic mobilization plan for the transition of the United States economy” to one that is “greenhouse gas emissions neutral”[1]

The proposed Resolution also highlighted the need to address “deeply entrenched racial, regional and gender-based inequalities in income and wealth” and called for “additional measures such as basic income [and] universal health care programs.”[2]

Proponents of the Resolution not only displayed a clear grasp of the fundamental connection between climate, class, and inequalities under capitalism, they showed that they understood the need for a radical program that can deal with these challenges simultaneously.[3]

In early February the GND reached another stepping-stone when Ocasio-Cortez—now a sitting Representative—joined with Senator Ed Markey to formally submit a joint Resolution to Congress, modified from the earlier draft. Confirmed and likely presidential candidates Elizabeth Warren, Kamala Harris, Kirsten Gillibrand, Cory Booker, and Bernie Sanders all expressed support. On climate change, the new Resolution instructed the Federal government to “achieve net-zero greenhouse gas emissions through a fair and just transition for all communities and workers,” and to “create millions of good, high-wage jobs and ensure prosperity and economic security for all people of the United States.” It also called upon the U.S. to meet “100 percent of the power demand through clean, renewable, and zero-emission energy sources.” These and other goals, it declared, “should be accomplished through a 10-year national mobilization” that would need to be “on a scale not seen since World War II and the New Deal.”[4]

The “Green Dream” vs. the Mainstream

Through these words and actions, the GND is now at the center of what is being referred to as a “war” between the rising left wing of the Democratic Party inspired by Bernie Sanders and the party’s pro-market neoliberal mainstream. That the GND will be a major issue in the 2020 election cycle seems, at this point in time, almost as inevitable as the accelerated melting of the Greenland ice sheet.

But the focus on adopting ambitious energy and climate goals had already been established by the 2017 Senate bill submitted by Senator Sanders. Sanders’ bill proposed an almost immediate moratorium on any new coal, oil, and gas projects.[5] A similar 2017 House bill seeks to end fossil fuel use as early as 2035 and mandates the U.S. transition to 80 percent clean renewable energy by 2027.[6]

In the wake of the action in Speaker Pelosi’s office, party leaders rejected the call to establish a Select Committee for a GND. Some months earlier, the Democratic National Committee had voted to support a resolution to allow Democratic candidates to continue to accept donations from fossil fuel companies.[7] Following the introduction of the GND resolution to Congress on February 5^th, Pelosi clumsily remarked, “It will be one of several or maybe many suggestions…. The green dream or whatever they call it — nobody knows what it is but they’re for it, right?”[8]

The initial Resolution had attracted criticism. Voices on the left said it was not sufficiently transformative or anti-capitalist.[9] Climate Justice voices questioned the lack of consultation with movement activists.[10] One right-wing commentator described it as “economically, technologically, and historically illiterate.”[11]

But the most serious charge made against the GND has been that it is “unrealistic.” In February, seven energy-sector unions expressed “grave concerns about unrealistic solutions such as those advocated in the ‘Green New Deal’ and by proponents of the ‘Keep It in the Ground’ ideology.”[12] Using stronger language, the Laborers’ said, “It is difficult to take this unrealistic manifesto seriously, but the economic and social devastation it would cause if it moves forward is serious and real.”[13]

Perhaps as a response to this pressure, the final Ocasio-Cortez/Markey resolution appears to have backtracked on key questions. Most importantly, the initial draft had called for meeting 100% of U.S. power demand from renewable sources, and the elimination of greenhouse gas emissions from manufacturing, agriculture, and transportation, all within 10 years. This was effectively a call to end the use of fossil fuels in that time frame, and replace them by renewable sources alone. But the final version called instead for “100% clean, renewable, and zero-emission energy sources.” The shift leaves the door open for nuclear power and, in the future, coal and gas with carbon capture and storage (CCS) technologies.

Not a Deal Breaker

But the changes introduced do very little to blunt the GND’s radical edge. As noted in the Fall 2018 edition of this column, those who call for ending fossil fuel use and for “100% renewable energy” in barely a decade often appear unaware of the serious technical obstacles to either of these scenarios—obstacles that become Jupiter-sized when projected against such a stringent 10-year time frame. Many have noted that the recent Special Report on 1.5 Degrees Celsius by the Intergovernmental Panel on Climate Change (IPCC) amounts to a call for urgent action to reduce emissions, but the IPCC has itself consistently rejected the idea that renewable energy, on its own, can meet energy needs—however those needs may be defined.

There are formidable challenges for sure. But calls for “realism” are unjustified from the perspective of either science or social and climate justice, because it’s precisely this realism that has put humanity in such a precarious position. The reality of mass extinction and ecological collapse makes an even more radical social and economic transformation necessary.

Meanwhile, a stringent time frame without a plan of implementation is like holding a fishing line without a hook. For the left, a clear distinction therefore needs to be made between those changes to the GND language that reflect an attempt to face what are truly formidable technical challenges, and those changes that reflect the political imprint of a Democratic Party mainstream—a party mainstream that has failed to respond to the Republicans’ “energy dominance” policy of exporting gas, oil and coal, and that appears all too willing to continue what amounts to “business as usual.”

Why the GND is Worth Defending

It remains very likely that the Democratic Party’s “pragmatic” mainstream will spare no effort in attempting to file down the sharp edge of the GND—a process that some believe has already begun. But the outcome is not inevitable. Making sure the GND remains potentially transformative is a project the left must take seriously.

At this time, the GND can still be described as radical in several important respects. The first concerns its potential scale and scope for action. Referring to the $700 billion American Recovery and Reinvestment Act (ARRA), Politico’s Michael Grunwald has written, “The [GND] idea sounds as radical and new as Ocasio-Cortez herself, [but] it’s been done once before, and just a decade ago: President Barack Obama signed a prototype Green New Deal into law in February 2009, pouring an unprecedented $90 billion into clean electricity, renewable fuels, advanced batteries, energy efficiency, a smarter grid and a slew of other green initiatives.”[14] This is Obama-fawning revisionism at its worst. The $90 billion allocated to green investments, spread over several years, was not enough to transform anything. By contrast, FDR’s Depression-era government committed 13% of U.S. Gross Domestic Product (GDP) to direct public interventions. The ARRA committed just 2%.[15] The GND that has been submitted to Congress is a much bigger animal altogether. It calls for a complete overhaul of energy, transportation, food and agriculture, etc. This will require massive investments.

Second, the GND proposal is built on the scientifically established need for the U.S. and other major economies to be “GHG emissions neutral.”. In contrast, climate commitments made by the Obama Administration were completely out of step with science-based emissions targets. At the 2009 UN climate talks in Copenhagen, Obama and Hillary Clinton supervised the demolition of the legally binding “Kyoto Architecture” and replaced it with a voluntary approach. This helps explain why most of the G20 countries—which together account for more than 75% of the world’s annual emissions—are not even on track to meet their (weak) Paris targets.[16]

Third, the latest GND resolution does not call for carbon pricing. If it can be sustained, this exclusion will amount to a massive policy breakthrough, because it flies in the face of almost 30 years of investor-focused climate policy. At the level of the UN, the G20, the World Bank, the World Economic Forum, etc., the now-20-year-old call for an “effective global price on carbon” continues ad nauseum. But the policy holds no promise of seriously impeding the rise of emissions. In 2017 just 15% of global GHGs were subjected to a price; in three-quarters of cases where a price on carbon exists, it was no more than $10 per ton—a trivial “cost of doing business,” and easily passed on to consumers in any case. The Global Commission on Economy and Climate recently noted that carbon prices “are still too low to have meaningful impact” and that a global price of $40-80 per ton by 2020 is needed to be consistent with the Paris targets.[17] Those who dismiss the GND as unrealistic fantasy would be well advised to acknowledge the proven fantasy of a global carbon price. It is simply not going to happen. The GND discussion could assign this rusted up “market mechanism” to the scrap yard, opening the space needed to debate and develop global climate policy that can genuinely meet the challenge.

The fourth path-breaking aspect of the GND is how it might be paid for. Ocasio-Cortez and her supporters maintain that, “The majority of financing of the Plan shall be accomplished by the federal government, using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks.”[18] Economists supportive of the GND have noted how “quantitative easing” was used by the Federal Reserve to carry out necessary spending in times of emergency, as in the bailout of the banks in 2008. [19] The same can be done to finance programs to protect our collective future.

Ocasio-Cortez’s proposals, as well as those of Sanders, reflect the rising influence of Modern Monetary Theory (or MMT) in policy debates.[20] MMT economists like Stephanie Kelton argue that, as a currency-issuing government, the U.S. could technically finance the GND directly through deficit spending, without issuing treasury bonds or private sector borrowing. According to Kelton, “Anything that is technically feasible is financially affordable… The federal government can spend money on public priorities without raising revenue, and it won’t wreck the nation’s economy to do so.”[21] According to MMT theorist William Mitchell, “It is often overlooked that the current system allows private banks to create most of the digital money in circulation through loans, which create deposits and liquidity that can be spent.”[22] If private banks can “create liquidity,” the government can—and should—do the same.

Lastly, the GND is potentially transformative in that it paves the way for public control over sectors of the economy that the government substantially funds. The original draft GND Resolution noted, “There is also a space for the government to take an equity role in projects, as several government and government-affiliated institutions already do.”[23] This is hardly a call to take over the commanding heights of the capitalist system, but it is a clear sign that the prevailing neoliberal notion that public money must be used to “unlock” private investment is, at long last, being challenged. There is more to MMT that can be explained here, but—if combined with a commitment to extend public ownership—the stage is set for the GND to evolve beyond a list of ambitious goals to become a suite of transformative government-led strategic economic interventions.

Just Do It

Representative Ocasio-Cortez and her supporters understand that the magnitude of the climate crisis makes the half-measures and failed “market mechanisms” of the mainstream more “unrealistic” than the bold plans put forward by the Green New Deal. The arc of the moral universe may bend towards justice, but that won’t mean very much if, within just a few decades, the planet can no longer sustain life as we know it. The Green New Deal can become the real deal—a game changer for climate protection and a major step towards building a more just and equal society.

Photo credit: Senate Democrats, Flickr

AUTHOR BIO

Sean Sweeney, PhD, is the director of the International Program for Labor, Climate and Enviroment at the Murphy Institute, School of Labor and Urban Studies.