The Inevitability of a (Probably Massive) Green New Deal

Mariano Torras Ecological Economics, Environment/Sustainability, Future, General, Macroeconomics, Politics, Public policy/Wellbeing, Science Leave a Comment

February 21, 2021

Did I get your attention? Ok, let me preface by adding “at some point” to the title. After all, to say that the present political climate in Washington makes a Green New Deal impossible might even be an understatement. And there really is nothing inevitable about such a policy breakthrough. One could alternatively imagine an endless political war of attrition. Yet most thinking people are coming to realize, however slowly, that continuing to ignore the global environmental crisis spells ruin for us all. So, call me an optimist, but I believe that a Green New Deal is at least very likely.

Even more likely, I would submit, because of the economic crisis (not to invoke the “D” word) we confront. Since it is likely to be prolonged it presents a unique opportunity. Now many believe that addressing environmental problems can only cost us jobs. The narrative has become so ingrained that it is not easy to dismiss. But it is a bogus argument that confuses some basic principles. Reduced economic activity that leads to mass job losses is indeed generally good for the environment. Yet the converse does not hold. Proactively confronting environmental problems can be a job creator. 

I am, frankly, not so interested in the details of “the” Green New Deal. There are different versions, to be sure. President Biden and Alexandria Ocasio-Cortez, for example, most certainly don’t have the same plan. But they and other political leaders have time enough to work on the details.

The important thing to understand is that a Green New Deal, if properly conceived, would be win-win-win. What I mean is that we could simultaneously make progress toward a cleaner environment, potentially massive job creation, and a much-needed infrastructural overhaul. And the key might be the last of these. It is no secret that the wretched state of our country’s infrastructure is a ticking time bomb. A much-needed large-scale refurbishment of our roads, bridges, communications and transportation networks, etc. could quite reasonably be coupled with innovative and efficient green design. Much of the required technology already exists. A massive employment boost would surely follow, at least in the short to medium run.

You might object that the new green infrastructure jobs would not be a net addition to the labor force because they would replace old jobs. But here there are at least two responses. First, many of the “old” jobs that have gone away due to the Covid-19 depression and are not coming back. Government programs to create jobs under the Green New Deal banner could therefore result in a net addition of jobs.

Second, and more important, we need to consider the longer-term economic context. Here I briefly digress to what ecological economics would say about the present situation. The standard ecological economic argument, in short, is that perpetual GDP growth is not sustainable anyway given the planet’s physical limits. And the modern world indeed appears to have been approaching these limits in recent years. Fortunately, ecological economics also emphasizes that high living standards and wellbeing do not require growth. And here is where, as I have commented elsewhere, the idleness enforced by the present pandemic affords us the opportunity to start taking steps toward a “post-growth” world.

I said earlier that we can no longer ignore the environmental crisis. I refer not only to climate change, but a host of other global environmental crises. Examples are soil erosion and degradation, deforestation, species loss, coral bleaching, ocean acidification, and others. There really are many others. These examples provide ample concrete evidence of the ecological “limits” of the planetary system. So, what to do?

Let’s return to the long-term context. Once we have emerged from the Covid depression, we need to achieve what ecological economics calls a “steady state.” I won’t go into the details here, but it refers to an economy that is no longer growing in terms of material or energy flows, yet in which quality of life goes on improving. I’ll leave it to you to imagine the many possible ways in which this can be achieved.

Circling back to the “jobs” objection from before, it should by now be clear that it comes from not thinking about the problem in the right manner. Our ultimate goal is to be well off whether or not it involves being employed, never mind for 40 or 60 hours per week. Many have speculated about a future world in which either employment is optional or perhaps where everyone works 10 or 15 hours per week and enjoys more free time.

Such a future state of affairs would surely be less environmentally impactful than the status quo. It is one way that we can imagine a “steady state” economy. And the Green New Deal would be a critical first step to realizing it. We must still, however, contend with the fact that the present system, capitalism, needs consistent growth in order to survive. There will be many political obstacles to meaningful change, as Biden (himself not exactly representing the revolutionary vanguard) is soon to discover. And we will all discover that better lives for the majority will require much political courage – much more than we should ever entrust to mere politicians.

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