The radical-reformist Green New Deal (GND) is a more viable approach to the climate emergency than the dominant Green Growth perspective, and it is more politically promising than the Degrowth/Post-capitalist framework.  The political obstacles are still formidable in this age of populist denial. Nonetheless, radical reformism is our best bet.

Green New Deals aroused excitement from 2018 until the pandemic stifled popular movements in 2020-2021. Note the use of the plural: there is not one Green New Deal, but several. Some formulations, such as that by Jeremy Rivkin, are a progressive spin on green growth within neoliberalism. The European Union’s Green Deal (2019) is a case in point. It is marketed as a “new growth strategy” to build a resource-efficient, competitive economy. Another version is close to the degrowth/eco-socialist view that capitalism, which is inherently ecologically destructive, must be transcended. The radical-reformist Green New Deal, in contrast to these two, entails a transformation within capitalism, from the dominant neoliberal type to a sustainable, egalitarian type.

The Radical-Reformist Option

This radical-reformist Green New Deal emerged as the shortcomings of neoliberalism became ever more apparent – financial volatility, intra-national and global inequality, precarity, and political polarization, as well as ecological decline.

Though still capitalist, this GND would usher in radical change, as did FDR’s original “New Deal” in the United States in the 1930s. Reversing global warming at this late stage requires deep changes in production, distribution, consumption and social structures. If we had seriously responded four decades ago, when the science of climate change was already established, more minor actions might have sufficed. Ecological transformation now cannot be achieved without deep economic and social changes, both as an end (to cut emissions) and as a means (to win popular support). The transition to a net-zero carbon economy must be just and comprehensive to be effective.

Significantly, activists and politicians articulated this approach, not technocrats, as in the case of green growth, or academics, as in degrowth. The politicians include, in the USA,  Alexandria Ocasio-Cortez and Ed Markie, who sponsored a congressional resolution on the Green New Deal in 2019. It failed to command a majority in the Senate, but they reintroduced the resolution for public discussion in 2021, following the election of President Joe Biden. Republicans responded to the proposal by treating it as if it were a revolutionary manifesto. A spokesman for Trump’s White House in 2019 declared, according to Wikipedia, that the Green New Deal was “what Stalin dreamed about but never achieved.” “They want to take your pick-up- truck, …rebuild your home, …take away your hamburger”, the spokesman continued, not altogether inaccurately. Bernie Sanders made the GND part of his program in the presidential primaries of 2020. Jeremy Corben, while he headed the British Labour Party, was also an advocate. Activist proponents include Avi Lewis, a prime organizer of Canada’s Leap manifesto, Naomi Klein, a writer-activist, Noam Chomsky and Robert Pollin, whose credentials are well known, and Kate Aronoff, a writer-activist.

These activist origins probably account for the more “user-friendly” feel of the Green New Deal, in contrast to degrowth or green growth. “Degrowth” is a bleak term; “Green New Deal” is softer, redolent of past political victory. The GND is also more readily understood than degrowth or green growth.  A post-graduate degree in mainstream economics is recommended for those sorting out green growth, and a degree in sociology for those exploring degrowth. The Green New Deal, in contrast, is highly accessible, leaving aside a certain vagueness as to whether the GND involves saving capitalism from itself (reformism), or eventually transforming capitalism (revolutionary).

What Is Involved?

Tacking “Green” onto “New Deal” evokes the directive state, as employed by Roosevelt in the 1930s. In this approach, the state relies heavily on public investment, regulation, and incentives to advance a plan, with some public ownership. A National Investment Bank would be useful in providing lines of credit for green projects. To drive the transition to renewable energy, publicly owned green power companies make sense. Nine of the ten top European countries committed to a green transition have such a public company. Demand for clean energy will be immense with the shift to electrical vehicles, and a publicly owned company dedicated to that end would be an asset. In countries where state agencies have atrophied during the neoliberal phase, such as the United States and the United Kingdom, reinvigorating the public sector is a priority. This reinvigoration would not only enhance state effectiveness, but also accountability to the public and decentralization where feasible. This GND would be hostile to oligopolies, but not to private property in general.

A forerunner of this GND was Canada’s Leap Manifesto in 2016. It was the outcome of deliberations involving organized labour, indigenous peoples, and environmental and social activists. It contains most of the key elements:

• 100% renewable energy by 2050
• Protection of workers who lose their jobs in the energy transition, including safeguarding their pensions and providing a job guarantee
• Recognition of indigenous land rights
• Creation of a more egalitarian society, partly by imposing a wealth tax
• The construction of a mass movement to support a vision whose attainment requires concerted political action.

The “leap” to a new society thus included both ecological and social transformation.

Consider, briefly, the range of policy issues that arise in implementing this version of the GND.

• Phasing out of coal, oil and gas fields. The goal is to attain 100 percent renewable energy in a decade. This goal will be achieved by switching to electrical power generated by zero-carbon sources. Fossil fuel reserves must remain in the ground if this critical goal is to be achieved.

Coal fields would need to be shuttered quickly, but oil and gas fields would phase out as demand declines or caps on production rachet lower. One expert estimates that holding global warming to 2°C would strand more than half of the assets of fossil fuel companies, while the 1.5°C target would strand 80 percent. The first oil and gas fields to close would be the dirtiest and most costly to operate – including Alberta’s oil sands. In Canada, 28 percent of carbon emissions derive from producing and transporting fossil fuels. Caps on production would cause losses to shareholders and job-holders (the latter being guaranteed new jobs) and increase the probability of loan defaults.

Realistically, climate action will involve taking on the fossil-fuels industry. Fossil-fuel corporations have known for decades about the “greenhouse” effect and its deleterious consequences, including a rising annual death toll. Yet they have focused on extracting and selling as much coal, oil, and gas as they can, while they can. It is a clear example of profit trumping the general good.

• Massive public, and private, green investment. It will be necessary to build out the electricity infrastructure, rapidly augment the supply of renewable energy, retrofit buildings for energy efficiency, expand public transport, increase efficiency in manufacturing while it shifts (where possible) to low-carbon energy, reduce the ecological impact of the modern food system, provide facilities for universal public services, and assist the global South in reducing their emissions.. It will be necessary to devote 2-4 percent of GDP per annum to the socio-ecological transition.

How would the funds be raised for this massive investment? Removing fossil fuels subsidies would cover part of the cost. An International Monetary Fund report estimated that, in 2022, “explicit” fossil fuel subsidies worldwide totaled US$1.3 trillion. “Implicit” subsidies, which included externalized health and environmental costs of burning fossil fuels, amounted to US$7 trillion. In the United States, removal of subsidies would release at least $US20 billion for reallocation, in addition to saving the future expenses of damage remediation from extreme weather. Cuts to defense budgets would provide more funds. In 2022, countries devoted US$2.24 trillion to defense (with the USA alone accounting for US$877 billion). Even a cut of only ten percent would yield US250 billion for reallocation. Higher income and wealth taxes would also be needed not only to raise funds, but also reduce the inequality that neoliberalism has accelerated.

Central banks, though usually independent of government under neoliberalism, would need to play a major role. Central banks became powerful actors in economic governance with the shift to neoliberalism and the vast expansion of the assets and power of financial institutions. The key role of central banks in averting catastrophe during the financial crisis of 2008-2010, and again during the pandemic (2020-2022) has vastly expanded their power. Quantitative Easing schemes moved trillions of dollars of corporate bonds, including those of fossil fuel corporations, onto their balance sheets. The conservative cast of central banks, with their focus on inflation control, stabilized a deleterious economic model.

These banks are only now coming to terms with climate change and climate risk assessment. Will they become “green” by assisting the transition to a new economy that assigns priority, not to GDP growth, but to avoiding ecological catastrophe? Will they align global finance with ecological targets via monetary policy and regulatory frameworks? They could purchase government bonds during the transition (that is, print money), tilt to low-carbon assets, promote low interest rates for low-carbon industrial investments, and float “green’ bonds. Much can be done, but who will force the issue with the “independent” central banks?

The financial sector would lose some profitable opportunities in the transition to a green economy, but new opportunities would open. Finance has seen its power and profits grow under neoliberalism, with the lifting of controls on cross-border financial transactions and domestic banking. Investment banks are heavily invested in fossil fuels. Bloomberg financial data reveals that they provided financing of more than $US2.66 trillion to the fossil fuel industry since the Paris Agreement (2016-2019). A GND would involve some losses for the banking sector as their veto power over policy is removed, and anti-monopoly legislation enforced. New investment opportunities of investing in the green economy would mitigate these losses, however.

• Just transition. The fossil-fuel industry generates many good jobs. For the sake of justice, but also to gain trade-union support, those who lose their jobs in the transition would be guaranteed a comparable job, job retraining, and safeguarded pension entitlements.

More generally, addressing today’s vast inequalities, both within countries and in the global population, is an essential part of the solution to climate change.

• The wealthy account for a disproportionate share of carbon emissions. Globally, the wealthiest one percent are responsible for 16 percent of consumption emissions. Put another way, this one percent of the global population produced, in 2019, as much carbon emissions as the poorest two-thirds of humanity (5 billion people). These emissions would lead to an estimated 1.3 million heat-related deaths between 2020 and 2030. The poorest, moreover, both within nations and within the global population, are more exposed to the dire effects of a warming climate than the well-off. This degree of disproportion cannot continue: to build popular support for a GND as well as to reduce emissions, inequality must be tackled. High income, inheritance and wealth taxes, together, would help support a comprehensive and generous welfare state, a minimum income and a job guarantee. That is part of building a good life for all within planetary boundaries.
• Concentrated wealth tends to produce a plutocracy with the political power to block policies, such as those associated with a Green New Deal, which are deemed contrary to its members’ interests., For this reason, too, it will be necessary to reduce the massive wealth inequalities that are characteristic of neoliberalism.

In sum, inequality is a climate problem. Equity and climate stability are conjoined, though equity in this case does not imply absolute equality. Income and wealth inequalities will not disappear; but they will be reduced.

• International solidarity. As emissions peak and decline in the global North, they continue to rise in the global South. We cannot hope to reach climate goals if emissions in the global South continue to grow. The United States contributes about 15 percent of global emissions; only China produces more. Yet US emissions are falling while China’s (and India’s) are rising. Although China is a major producer of green technology, it is also financing and building coal plants domestically and throughout the world, especially in Asia. Coal is still in demand. Therefore, it is in the national interest of the rich countries to help to finance and facilitate technically an energy transition in the global South.

So far, however, the wealthy countries have not carried through in fulfilling their commitments to the global South. In 2009, the United National Framework Convention on Climate Change inaugurated a Green Climate Fund, with the World Bank as trustee. The resources were to finance low-emission and climate resilient projects, especially in highly vulnerable areas such as tropical islands and arid countries. The goal was to generate contributions of US$100 billion by 2020, a goal that has not been realized. The World Bank, however, has set aside US$38 billion per year for climate action, which is a major increase. But much more is needed – something in the nature of a Marshall Plan for the global South.

Private investment in “climate-friendly ventures” is needed. Global assets currently under private management total a massive US$120 trillion. The goal, of the international financial institutions and some rich-country governments is to encourage green investment in the global South by “derisking” such investments.  Multilateral and bilateral institutions are expanding their financial guarantees, while the investment guarantee agency of the World Bank pools its funds with those of private investors.

To allow poor countries to leap to a green transition, technology transfers are crucial. In protecting the climate and safeguarding crucial eco-systems, the profits of corporation holding the relevant intellectual property rights may need to take second place. In any event, much of the research for the patented processes was publicly-financed, especially at universities. World Trade Organization rules governing intellectual property rights will need to be revised. This, and other, dramatic changes of the rules may require cooperation among the major powers, which is clearly lacking now.

Finally, the adoption of radical GNDs by the United States and other liberal-democratic countries would have an important ripple effect throughout the world.

A Crucial Add-on: Constraints on Throughputs

There is no way around it. The GND needs to be supplemented by constraints on energy and material throughputs. Humanity has already crossed six of nine planetary boundaries. In the transition to low-carbon and renewable energy, we cannot supply electricity to meet demand at the current rate of consumption. Whether sufficient reserves of some critical minerals exist to supply the high demand is one question. But even if we could wring enough metals out of the earth (and sea-beds), the immense scale of mining would devastate numerous ecosystems. We must beware of saving the earth in one way while destroying it in another.

Some will vehemently object that the “grow or die” logic of capitalism renders the concept of constrained capitalism a non-starter. I have challenged that argument: whereas “grow or die” is the logic of the neoliberal type of capitalism, it is not so with another, more ecologically sustainable form of capitalism. Institutions shape the economy, and institutions can change.

Curtailing energy and resource use will make it easier to decarbonize and preserve eco-systems. Robust growth would accompany the early years of the energy transition, though with a different composition than now. The earlier discussion of green investment has already made that clear. However, as the transition proceeds, growth would need to wane. To be more precise, the volume of energy and resource throughputs must decline.

Central planning might theoretically achieve this decline. It has, however, been tried, and it has failed. And “participatory” or “democratic” planning assumes a socialist abolition of private property and a market economy That is not on the horizon. Thus, in liberal democracies in which people are acclimated to markets, the most efficacious approach would be to apply constraints on market forces. The main obstacles in doing so are political and cultural.

One interesting proposal to aid the socio-ecological transition arises from Earth for All, a Club of Rome report on how to surmount the climate crisis. It suggests (among other policies) a Citizen’s Fund and a universal basic dividend. This set of policies aims not only to constrain throughputs and wastes, but also to ensure that everyone has a minimum income. The idea, originally sketched by Herman Daly, is to tax what we want to have less of – resource depletion, damage to eco-systems, invasion of privacy, and pollution (especially GHGs).

The proposal is built around the “commons” as collectively owned, and thus, everyone in society should benefit from its use. The commons encompass nature, both as “natural resources” and as a sink for wastes, as well as our personal data, which is now appropriated by data companies as a commodity. The point is that private interests have “enclosed” (commodified) large swathes of the commons. To rectify this situation in the name of justice and restraint, the state would impose fees on companies that have enclosed the commons by appropriating resources, sinks for waste, and personal data. The fees will encourage companies to become more resource efficient, reduce and recycle waste, Fees will be returned to each citizen in the form of a dividend, which will reduce poverty and generate more life options. Levies would be imposed on

• Carbon emissions
• Pollution of waterways, land, sea
• Lumber extraction
• Mineral extraction
• Freshwater industrial use
• Personal data access
• Intellectual property that draws on public research.

The levies and rebates reward the carbon and resource frugal, among other positive outcomes.

Conclusion

The political and cultural obstacles to achieving this extensive program are major. The current political polarization makes the task all the more challenging. Nevertheless, two points are worth emphasizing. The dominant “green growth” approach cannot save us. And the degrowth vision, though attractive, entails the improbable overturning of capitalism. The radical-reformist Green New Deal is a more viable approach to climate emergency than green growth, and more politically promising than degrowth. There is no easy way out.

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