In many places, including Germany, the idea of a Green New Deal continues to be criticized from the well-known conservative angle and, more recently, from a progressive perspective as well. For instance, in a recently published book, “Green Capitalism: Crisis, Climate Change and Unchecked Growth,” the authors — Stephan Kaufmann and Tadzio Müller — equate the Green New Deal with the idea of “Green Capitalism.” Coming from a progressive perspective, they claim that these concepts only provide an ecological basis for perpetuating the existing and highly problematic economic system.
This new critique of the Green New Deal is not valid because it fails to understand that the Green New Deal does not entail a simple “greenwashing” of the existing system. In fact, the project would profoundly transform our economy and society.
The global Green New Deal is an imperative. Why?
First, the existing economic system has led to devastating financial and economic crises. And, all over the world, the quantitatively huge and qualitatively unique rescue packages being implemented do little, if anything, to contain the risk of new crises spawned by excessive national debt and new speculative bubbles.
Second, the current economic system destroys the climate and endangers the rich diversity of species. The TEEB-Study on biodiversity sets forth alarming estimates of the costs of eliminating natural capital. For instance, as much as $5 trillion and $50 billion are lost due to destruction of forests and overfishing, respectively. These numbers show a dramatic trend towards the irretrievable destruction of the ecosystems that sustain lives and livelihoods.
And third, the system of finance-driven globalization destroys our societies because it leads to crises of poverty and distribution. How can anyone accept an economic model that allows one billion people to starve? The gap between rich and poor continues to grow in industrialized countries as well as developing countries. In industrialized countries, the middle classes are shrinking and the earnings of most workers are declining, while at the same time, the incomes of the already rich continue to grow.
To tackle these frightening developments, we cannot simply “green” the current capitalist system. For instance, it is insufficient for people to adopt lifestyle changes, such as buying electric cars instead of fuel-driven ones or heating with wood chips instead of oil. Since the current economic model is at a dead end, we need a comprehensive ecological and social transformation of the economy, a Green New Deal with three pillars which can:
- effectively regulate the financial markets in order to restore their original function: serving real economic development;
- ensure that the current economic system develops a “circular flow” based on renewable energy and recycling; and
- establish social balance, on a local and a global level.
While the “Green Capitalism” model focuses exclusively on the second pillar, the Green New Deal explicitly has two additional dimensions. The goal of the Green New Deal is not to rescue the global financial capitalism by giving it an ecological basis. To the contrary, Roosevelt’s New Deal was chosen as a model because it not only regulated financial institutions, but also introduced the minimum wage, granted union rights (e.g., the freedom of strike), and implemented progressive taxation and social security. Through such means, it altered the distribution of power and wealth. The concept of “Green Capitalism” can be rejected since it would fail to alter either the distributive patterns of growth or the unchecked power of the financial markets.
In addition, the concept of the Green New Deal is far superior to an approach, suggested by some, that argues for lowering greenhouse gas emissions by shrinking the economy. Indeed, a shrinking economy does lower levels of carbon emissions (witness the collapse of the Eastern European economies or during the current economic crisis), but it also leads to a significant rise in unemployment and an explosion of national debt. Therefore, it is irresponsible to advocate for a constantly shrinking economy. The dilemma is that, while lower levels of economic growth may curb climate change, it intensifies the poverty crisis. On the other hand, while higher levels of economic growth may help reduce poverty and improve distribution, it exacerbates the climate crisis.
To resolve the dilemma, we need to foster a model that bears in mind the ecological, economic, and social dimensions of economic development. Only a Green New Deal which transforms these three dimensions of policy can address the needs of a burgeoning number of vulnerable people who are consumed with fears about job insecurity, the adequacy of their retirement pension, or how to finance their children’s education or a medical procedure.
For the first time, the failure of our current economic system is obvious to the great majority of people. History will judge us harshly if we allow this crisis to “go to waste” by failing to remodel our economies in sustainable ways. Otherwise, there may be a new type of crisis in the near future: a crisis that calls into question the legitimacy of our political systems.
There are a lot of ideas here which I can only applaud, but it still does not make it entirely clear what a world with a “green new deal” would look like. It makes it clear that any green new deal would go far beyond simply “greening” the existing system, which is positive because it´s just too hard to imagine that the existing system could ever be ecologically sustainable and equitable. At the same time, it leaves the relationship with “growth” highly ambiguous. Clearly, yes, shrinking the economy would indeed have numerous negative effects, but no distinction is made between reducing growth in developed countries and doing so in developing countries. Moreover, while criticizing the idea of “shrinking” the economy to achieve environmental goals, it does not make it clear if that means that high growth rates should continue to be the main objective. At Due South (http://www.iied.org/sustainable-markets/blog/losing-will-live-and-let-live) we´ve discussed whether it is indeed inevitable that any economic growth will inevitably entail the depletion of natural resources and biodiversity.
I think the distinction Schick makes between Green Capitalism and a Green New Deal is an interesting and important one. An even greater example occurs to me following my recent thesis research: the New Deal facilitated rural electrical development through favorable loans to electrical co-operatives. Moreover, an existing wind turbine industry was squashed as a result of absent environmental awareness to that extent. Denmark and Germany, and to some extent Spain, have been important pioneers who have demonstrated how these concerns can be combined in modern times.
An even greater aspect is that citizen action in the former two cases is paralelled by co-operative citizen enterprise initiatives in Holland, the US, and perhaps remarkably in the UK. Spain, while showing corporate success through feed-in policy, has significant infrastructural resistance to local initiatives.
Miguel Mendonca, Lacey, and Hvelplund have written a strong policy article in Politics and Society in which they advocate a model of concrete market institutions and innovative democracy, built around feed-in payments to independent generators of electricity. Along with Latin American recycling co-ops, I think we have strong examples of efforts which simply need to be incentivized through policy.
The grassroots, social, and solidarity economics orientation at geo.coop, the Solidarity Economic Network site at populareconomics.com, and the SocioEcological Political Economics blog at socioeco-econ.blogspot.com are some excellent starting points as forums about these approaches.
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