Magazine article New Internationalist

Is the Green New Deal a Dead Duck?

Magazine article New Internationalist

Is the Green New Deal a Dead Duck?

Article excerpt

We are facing three crises: finance, energy and climate.

The global financial (and economic) crisis is ongoing and may yet get worse.

As to energy and climate, the exact time of 'peak oil' - the point at which oil extraction rates decline and prices rise inexorably - is controversial. It may have already happened, could lie decades in the future, or might even occur this year. Proponents of large, new fossil fuel sources - such as tar sands - assure us that their reserves could keep the world economy lubricated for decades. But one thing is certain: energy will be more expensive and harder to get.

The International Energy Agency (IEA) predicts that by 2030, global energy demand will increase by 45 per cent - requiring four times the current output of Saudi Arabia in new production capacity. The impact of this 'business as usual' scenario on climate will be extreme, precipitating a global temperature rise of six degrees Celsius, according to the IEA.

In 2006, a year before the financial crisis hit, leading British economist Nicholas Stern warned us that due to climate change: 'We will be faced with the kind of downturn that has not been seen since the Great Depression and two world wars.' The costs of repairing the damage would exceed the costs of preventing it happening in the first place by a factor of 20.

Since Stern made his calculations, the predictions and pace of climate change have grown ever more alarming. We have probably about a decade to stabilize our emissions, and need to reduce them by 80 per cent by 2050.

Global Green New Deal

This 'triple crunch' of finance, energy and climate demands a response that many economists and analysts think ought to resemble a war effort, as articulated by the group that launched A Green New Deal in Britain in 2008.1

In March 2009 the United Nations Environment Programme (UNEP) proposed a Global Green New Deal, advocating the uptake of a suite of policies.2 Edward Barbier, a professor at the University of Wyoming, was asked to produce a consultancy report. He calculated that a 'green' stimulus would produce a 20 per cent increase in job creation over more traditional fiscal measures. Plus, it had the potential to reap eventual savings of $450 million for every $1 billion invested.

By investing in the right projects - combined with the right pricing policies such as carbon taxes and subsidies for clean energy - millions could be employed, as the global economy 'powered down' to prepare for the double challenge of energy scarcity coupled with climate change. Investment would be in: wind farms; solar panels; flood defences; sustainable agriculture; research and innovation. The energy efficiency of buildings would be improved by employing thousands of newly skilled workers to insulate roofs and doubleglazed windows. The potential was enormous.

The idea stems from the original New Deal, launched in 1933 by US President Franklin D Roosevelt as an emergency measure to provide work and income for millions made destitute in the Great Depression that followed the 1929 Wall Street crash.

Under the guidance of British economist John Maynard Keynes, Roosevelt stipulated that the equivalent of four per cent of the nation's Gross Domestic Product (GDP) be spent on public works. The national deficit was increased and federal debt expanded in the belief that it would pay off.

More than four million people were put back to work. Over seven years, the government spent $21.1 billion building 40,000 schools, 120,000 bridges, 600,000 miles of roads and over two million public toilets. Rural America was electrified. Safe drinking water and sanitation raised the living standards of millions. Literacy boomed.

Though it would not have been labelled 'green' at the time, the New Deal reforested the US: the Civilian Conservation Corps planted over three billion trees with the aim of mitigating the soil erosion resulting from deforestation and poor agricultural practices which had led to infamous 'dust bowl' storms. …

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