Money is and always was a form of social technology, one that enables individuals, firms and governments to do business, to trade and exchange. To accomplish transactions smoothly and efficiently, both at home and across borders. A society’s monetary system, like its sanitation system, we argued, is a great public good.
However, we also recognised that the history of monetary systems is one of struggle for control over the system, between those that would exercise private authority over it and those that prefer public, accountable authority. In the 1960s and 70s, Western governments ceded effective control over the system to a private authority – ‘the market’. Or, to be more specific, private actors in financial markets. The latter are dominated by the capital bourses of Wall Street, the City of London and Frankfurt.
While a developed monetary system is a great public good, we Green New Dealers recognised that there are of course ecological, economic and political limitations to what society can ‘do’ within the framework of the monetary system. Nevertheless, provided they are managed by the visible hand of public authority, monetary systems could help finance the radical and costly transition from a fossil fuel-based economy to one based on renewable energy. Just as the monetary system helped finance transitions to war, or to recovery from financial crises.
Therefore the UK GND makes clear that one of the first tasks will be for society to regain public authority over the national and international monetary system. And next, to raise the finance to tackle climate change, not just in Britain but internationally. We called on the British government to support a transformation of the financial system that would:
• allow all nations far greater autonomy over domestic monetary policy (interest rates and money supply) and fiscal policy (government spending and taxation);
• set a formal international target for atmospheric greenhouse gas concentrations that keeps future temperature rises as far below 2°C as possible;
• deliver a fair and equitable international climate agreement to succeed the Kyoto Protocol in 2012;
• give poorer countries the opportunity to escape poverty without fuelling global warming by helping to finance massive investment in climate-change adaptation and renewable energy.
We drew our inspiration from Franklin D. Roosevelt’s ‘courageous programme’ launched in the wake of the Great Crash of 1929. We called for a sustained programme to invest in and deploy energy conservation and renewable energies, coupled with effective demand management.
A Carbon Army to Make Every Building a Power Station
Like the US GND, we placed considerable emphasis on the creation and training of what we termed a ‘carbon army’ of workers to provide the human resources for a vast environmental reconstruction programme. The production and distribution of clean energy will demand the skills, professionalism and experience of many that currently work in an industry that must contract until it finally shuts down – the fossil fuel industry. We called for hundreds of thousands of these new high- and lower-skilled jobs to be created in the UK, regarding this as part of a wider shift from an economy narrowly focused on financial services and shopping to one that might become an engine of environmental transformation. We supported the Trade Union Congress’s demand for strong policies to support workers through a just transition – one that will make sure that workers do not pay the price for the economy’s transformation away from dependence on carbon and other greenhouse gas emissions.
Focusing first on the specific needs of the UK, we called on the British government to introduce a decentralised, low-carbon energy system that included making ‘every building a power station’. Energy efficiency was to be maximised, as was the use of renewables to generate electricity. At the time we envisaged a £50 billion-plus per year crash programme to be implemented as widely and rapidly as possible. ‘A programme of investment and a call to action as urgent and far-reaching as the US New Deal in the 1930s and the mobilisation for war in 1939’.
We argued for realistic fossil fuel prices that included the cost to the environment, high enough to create the economic incentive to drive efficiency and bring alternative fuels to market. We advocated rapidly rising carbon taxes and revenue from carbon trading. We called for the establishment of an Oil Legacy Fund, paid for by a windfall tax on the profits of oil and gas companies. We wanted the focus to be on smart investments that would not only finance the development of new, efficient energy infrastructure but also help reduce the demand for and the cost of energy, particularly among low-income groups, by improving home insulation.
GNDs: How Do They Differ?
Both the US and UK GNDs are based on the understanding that because climate breakdown is a security threat to the nation as a whole, the state has a major role to play in the transformation – just as if the nation were facing the threat of war. The American Green New Deal is ‘a Federal Government-led mobilization’ working alongside, and integrating, the private sector within GND programmes. In drafting the GND the Justice Democrats drew heavily on the work of Professor Mariana Mazzucato, whose research has shown that contrary to myth, public organizations have played a critical role as ‘investor of first resort’ in the history of technological change and advance. From the iPhone to Google Search, the world’s most popular products were funded, she concludes, not by private companies but by the taxpayer.12
The British GND also has a major role for the state, not just in the transformation of the energy sector, but also the finance sector – and at international as well as domestic levels.
While the British GND is concerned to protect low-income individuals and families during the process of transformation, the AOC GND is more ambitious. In the words of the veteran climate campaigner Bill McKibben, it seeks to ‘remake not just a broken planet, but a broken society’.13 It puts members of ‘frontline and vulnerable communities’ front and centre as beneficiaries of the Green New Deal. The drafters of the Resolution are acutely conscious of the 1930s New Deal’s ‘intimate partnership with those in the South who preached white supremacy’, and of the deliberate and racist exclusion of many black people from the economic gains of that era. Hence
it is the duty of the Federal Government to create a Green New Deal … to promote justice and equity by stopping current, preventing future, and repairing historic oppression of indigenous communities, communities of color, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities, and youth (referred to in this resolution as ‘frontline and vulnerable communities’).14
The British Green New Deal, as noted above, has adopted a more internationalist perspective than the American versions of the programme, calling on OECD governments to help finance massive investment in climate-change adaptation and clean energy for low-income countries.
Finally, the British Green New Deal (in both the first and subsequent reports) provides something absent from the US version in that it expands on the question of how the GND could be financed, deploying both monetary and fiscal policy, but with an emphasis on monetary policy.
1 System Change, Not Climate Change
We have been warned by climate scientists that to avoid the most dangerous impacts of climate breakdown and global heating, then humanity collectively has (starting from 1870) a ‘carbon budget’ of about 3,200 billion tonnes of carbon dioxide emissions to work with.1 At the current rate of global emissions, this budget would be used up within ten to twelve years. Worse, in 2019 another group of scientists, the UN’s Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), warned that nature is declining globally at rates unprecedented in human history. The rate of species extinction is accelerating, with grave and immediate impacts on people around the world.2 The UN called for ‘a fundamental, systemwide reorganization across technological, economic and social factors, including paradigms, goals and values’.3
The Green New Deal (GND) is a blueprint for bringing about that urgent system-wide