Why the Green New Deal Might Be the Worst Thing That’s Happened to the Green Movement
Since it was released on February 7th, there has been a lot of excitement about the Green New Deal introduced and led by Alexandria Ocasio-Cortez. Every one of the announced Democratic candidates for President have endorsed it. But the Green New Deal may in fact do incredible damage to the Green movement. The Green New Deal has plenty of challenges with being unrealistic with regards to its climate change related initiatives but it really jumps the shark when it throws in a host of unrelated Socialist wish list items.
The overall effect is to tangle the Green movement with Socialism and what could only be called radical structural changes to the entire economic system of the U.S. Problematically for the Green movement, it will now become harder to pursue smart policies that are capable of having a big impact and attracting broad support as all Green initiatives will be lumped in with a Socialist, pie in the sky agenda.
Socialist You Say?
We live in a bizarre time when calling someone a Socialist seems like it should be dismissed as a partisan insult but the people on the receiving end of that label are now proud to call themselves Socialists. So let’s be clear, Alexandria Ocasio-Cortez is a proud and unabashed Socialist. Therefore calling her, her policies and those who endorse them Socialist is not bumper sticker slander, it is a statement of fact. To be specific she along with many others are part of a new version of Socialist called Democratic Socialist. Which is basically Socialist with Democratic thrown in front to make it sound better.
Vox actually covers this well in its article, Alexandria Ocasio-Cortez is a Democratic Socialists of America member. Here’s what that means:
“Democratic Socialists of America (DSA)”
“Like most socialist organizations, DSA believes in the abolition of capitalism in favor of an economy run either by “the workers” or the state — though the exact specifics of “abolishing capitalism” are fiercely debated by socialists.
In practice, that means DSA [members advocate] ending private ownership of a wide range of industries whose products are viewed as “necessities,” which they say should not be left to those seeking to turn a profit.
DSA also believes that the government should “democratize” private businesses — i.e., force owners to give workers control of them.”
So let’s all agree, this is just Socialism.
Nate Silver’s FiveThirtyEight site, best known for data, analytics and predicting elections, wrote an enlightening article on The Young Left’s Anti-Capitalist Manifesto. This is a real movement and Alexandria Ocasio-Cortez is just the most well know leader. The Green New Deal is a cornerstone of this Anti-Capitalist manifesto.
There is a whole article, that for some reason actually needs to be written, on why Socialism is a terrible idea but that isn’t the focus of this article. Unfortunately, Millennials do not remember the last century where there was an experiment on a global scale manifested as the Cold War in which Communism/Socialism competed against Capitalism. There was a clear-cut winner in this battle and it was Capitalism. Ask the last bastion of Communism/Socialism, Venezuela, how well that’s working out for them. Once the wealthiest country in Latin America, Venezuela is now a failed state with inflation reaching 1.3 million percent in 2018 heading to 10 million percent in 2019, people starving, lacking medical supplies and people fleeing the country en masse (about 3 million so far).
But what’s Socialist or Unrealistic in the Green New Deal?
According to the Green New Deal legislation and its accompanying fact sheet:
Guaranteed Income, Housing and Healthcare
The Green New Deal calls for guaranteed income (“family-sustaining wage”), housing, healthcare, etc. for all including those “unwilling to work”. It’s really hard to understand what any of this has to do with Climate Change, it’s just the afore mentioned wish list of Socialist ideas thrown in.
Public and Community Ownership
The Green New Deal calls for public and community ownership of transportation, energy, and other portions of the economy covered in this bill. Which if nothing else, clarifies that this is intended to be government funded and government owned, massively expanding the size and role of government.
Preference for Specific Identity Groups (basically everyone except white middle and upper class males)
The Green New Deal repeatedly emphasizes a priority and preference for what it refers to as “Frontline and Vulnerable Communities” in order to address “systemic injustices”. Frontline and Vulnerable Communities are defined as:
“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.”
In other sections it seems to include retribution to address past, present and future inequity. Again, it’s unclear what this has to do with Climate Change and just seems to be a manifestation of identity politics.
An additional priority is
“ensuring the use of democratic and participatory processes that are inclusive of and led by frontline and vulnerable communities and workers to plan, implement, and administer the Green New Deal mobilization at the local level.”
It might be hard to actually get things done if there are large bureaucracies right down to the lowest level. The community “engagement” that caused Amazon to pull its HQ2 out of New York this week provides a good example of how well this type of engagement might go. And these efforts, of course, can’t be led by middle/upper class white males, because this is really just about Climate Change not social engineering…right.
Worker Rights and Unions
It also mandates
“high-quality union jobs”
“strengthening and protecting the right of all workers to organize, unionize, and collectively bargain”
It’s unclear what this has to do with Climate Change.
No More Airplanes
It also calls for the elimination of airplanes within the next ten years. This might be good for the environment but in addition to being completely unrealistic and impractical, it has a number of issues. First, eliminating an entire industry that employs over 10 million people in the US would be massively disruptive to say the least. This would need to be done against the will of the companies, employees and the vast majority of the citizens of the country i.e. it would require a coercive if not oppressive government. And it would isolate the US as it would necessitate a disconnect from the rest of the world.
No More cows?
In addition to getting rid of airplanes, they want to get rid of cows. The Green New Deal literally contains the following in its fact sheet:
“We set a goal to get to net-zero, rather than zero emissions, in 10 years because we aren’t sure that we’ll be able to fully get rid of farting cows and airplanes that fast”
How do you think farmers and ranchers will react to having their herds eliminated? That will not be peaceful. Not to mention the meat loving public. Again, this would require a coercive if not oppressive government.
This seems to require a new addition to the Two Cows definition of economic models:
Capitalism – You have two cows, you sell one and buy a bull, your herd multiplies and the economy grows.
Socialism – You have two cows, the government takes one and gives it to your neighbor.
Communism – You have two cows, the government takes both and gives you some milk.
Fascism – You have two cows, the government takes both and sells you some milk.
Nazism – You have two cows, the government takes both and shoots you.
Democratic Socialism – You have two cows, the government shoots them and tells everyone to drink soy milk and eat tofu burgers.
No More cars?
Of course, this also calls for getting rid of internal combustion engine vehicles in ten years. Electric cars are great but getting rid of non-electric cars, buses, trucks, tractors, trains, etc. in ten years is almost certainly not possible and not something that individuals and businesses would do freely. As of 2016 there were 268.8 million motor vehicles in the US. For context Tesla has delivered a total of about 531,880 cars globally since 2012. This ramped dramatically in 2018 with the delivery of 244,880 cars globally. So if Tesla produced cars at the rate they did in 2018 but delivered them all to the US, then over the next 10 years they’d produce enough cars to replace 9% of the cars in the US. Hard to see how you’d get there. And there can be no doubt that businesses, farmers and individuals would not readily give up their vehicles.
No More Fossil Fuel Energy
It also calls for getting rid of all carbon based and nuclear energy within the next ten years, Perhaps directionally correct, but hopelessly naïve. As of 2017, 11% of the U.S. energy supply came from renewables according to the U.S. Energy Information Administration. 45% of that includes burning biomass such as wood, biofuels, and biomass waste so really only about 6% of our energy comes from wind, solar, geothermal and hydroelectric. It’s going to be hard to power all the social media and smart phones, not to mention everything else in the U.S., without carbon based energy for some time to come.
Re-build the Electric Grid
It also calls for re-doing our entire electric grid to be more efficient and smart. The costs for modernizing the grid is estimated to be perhaps $2 trillion. It’s further complicated by the fact that it isn’t one thing and it’s owned by a large number of different private utilities and energy producers. For a number of reasons this is a good idea but really hard and expensive to accomplish.
Rebuilding every building in the U.S.
The Green New Deal also includes
“upgrading all existing buildings in the United States and building new buildings to achieve maximal energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification”.
Again, neat idea but just for homes it’s estimated that it would cost about $50,000 per home to retrofit for a 50% fossil fuel use reduction. Depending on how you count it there are about 87 million homes in the US if you ignore large apartment buildings. So it might cost about $4.3 trillion to retrofit houses, not counting large apartment buildings, offices buildings, manufacturing buildings, warehouses, etc. The bigger issue might actually be finding enough carpenters to do all the retrofitting.
Rebuild the Railroads
Additionally the plan calls for blanketing the country in high speed rail in order to reduce the number of planes and motor vehicles. Sounds great unless you consider that on Tuesday the new California Governor, Gavin Newsom, announced he’s abandoning the plan to build a high speed rail between Los Angeles and San Francisco as the host had ballooned to $77 billion. That’s just one high speed line stretching 337 miles in between two major U.S. cities in one state, California no less. Los Angeles to New York is approximately 2,500 miles by comparison. There are about 140,000 miles of privately owned railway in the U.S. The U.S. covers 3,797,000 square miles.
Great Jobs for All
The Green New Deal touts all the great jobs it would create. And in order to rebuild the railroads, replace all motor vehicles with electric vehicles, retrofit buildings, build a new energy grid, and transform to totally green energy, you’d need to create a lot of jobs. In fact, it would likely require everyone in the U.S. doing nothing but these things for the next ten years to even put a dent in those plans. The obvious problem is, who’s going to pay those people and pay for all the materials required? Right now, we could all retrofit our houses, add solar panels and buy an electric car except that would cost $100,000 - $200,000 which few people could afford. Those that could afford to do that generally choose not to.
There is a complete absence of any understanding of economics at play in the Green New Deal. The government just doesn’t have enough money to pay for all of this and the private sector has no reason to pay for it at the expense of doing everything else even if it could pay for it. Individuals, companies and nations do not generate wealth and well-being by spending money on things that have a negative return on investment. Consideration of things like avoiding the cost of extra “hundred year” floods should certainly factor into the ROI equation but spending yourself into oblivion isn’t a viable option and will ultimately do more damage.
This is a road to financial ruin ala Venezuela. And to move down this path would require tyranny to force the will of the government on to the people to enforce the perceived good of the many over the interest of the individual. It will bring with it the corruption that always follows top down control and large bureaucracies.
But Isn’t this Necessary Because Climate Change is Important?
There are, in fact, a number of things that could be done to make a real impact on reducing greenhouse gases that could get broad and perhaps even bi-partisan support. The Green New Deal makes it increasingly difficult for such policies to gain traction as they will get conflated with this overtly Socialist agenda and what even Nancy Pelosi refers to as the “Green Dream or Whatever”.
Here are a few Green ideas that could gain broad support if they aren’t now tainted by the mess that is the Green New Deal.
Gas Tax Increase
The Federal gas tax of 18.4 cents per gallon has not increased since 1993. Adjusted for inflation, the gas tax has gone down 40% over those 25 years. The price of gas in 1993 was $1.11 compared to today’s average of $2.27 i.e. it’s more than doubled but the gas tax hasn’t changed.
And believe it or not the U.S. Chamber of Commerce supports an increase of 25 cents and President Trump supports and increase of up to 50 cents. The 25 cent increase favored by the Chamber of Commerce, would generate $840 billion for roads, bridges, etc. and is projected to increase the number of electric vehicles by 1.2 million by 2050. It’s also estimated this would decrease gasoline consumption by 1.3 Billion barrels and diesel consumption by 235 million barrels in that time. The Chamber of Commerce plan calls for this increase to be 5 cents a year for five years in order to minimize the impact on consumers.
It should be noted that NPR’s Planet Money did an episode in 2012 and one in 2016 that contained six ideas a broad panel of economist all agreed on and an increase in the gas tax was included on both lists as was a broader carbon tax.
A gas tax primarily has issues because it’s regressive. Which is to say it disproportionately impacts the poor for whom increases in gas prices can meaningfully impact their ability to get to work and make ends meet. But, if the objective was really to reduce emissions, a gas tax could be structured to be cost neutral to consumers. For example, a $1,000 a year tax credit could be provided to all consumers to offset a massive increase in the gas tax. This increase in the gas tax would incent more use of public transportation, more fuel efficient vehicles, etc. but it would not have a detrimental impact on consumers.
Carbon Dividend: Baker-Shultz Plan
Taking the gas tax to the next level with a carbon tax that is revenue neutral. The revenue from a gradually rising carbon tax would be paid out to citizens in the form of a carbon dividend. Under this plan the bottom 70% of U.S. income earners would receive more in carbon dividends (about $2,000 per year for an average family of four) than they would pay in increased energy prices. This plan also includes some regulatory easing as well as a border carbon adjustment to ensure that U.S. products remain competitive.
It’s estimated that this plan would significantly exceed the U.S. Paris accord target for emission reductions (more than doubling the impact of the Obama-Era regulations and tripling the revised Trump era new baseline). Its namesakes are George Shultz (former Secretary of the Treasury, Secretary of State and Secretary of Labor) and James Baker (former Whitehouse Chief of Staff, Secretary of State, Secretary of Treasury and Secretary of Commerce) both having each served under three Republican Presidents. The plan is also backed by 27 Nobel Laureates, 4 former Fed Chairs, 15 former Chairs of the Council of Economic Advisers and is viewed as a bipartisan climate solution.
Energy Efficient Homes
It’s not a bad idea to encourage people to make homes more energy efficient. This could be done by allowing home owners to deduct the cost of energy efficient home improvements (insulation, new energy efficient windows, more efficient furnace, etc.) from their taxes or even provide a tax credit to incent this behavior. This could be similar to Investment Tax Credits that are provided for solar and wind investments.
Continue Tax Credits for Electric Vehicles
Up until January 1, 2019 Tesla owners were able to get a $7,500 Federal tax credit for purchasing an electric vehicle (EV). This is tied to an annual volume trigger of 200,000 vehicles, once the manufacturer delivered that number of electric vehicles the tax credit phases out for that manufacturer. In 2018, Tesla hit the volume target and the Federal tax credit is now cut in half to $3,750 as of January 1, 2019 and will further drop to $1,875 by July 1, 2019 and then the credit will be fully gone by the end of 2019. Other car manufacturers still get the full credit until they reach the threshold of EVs sold. Continuing to extend this tax credit for Tesla and other manufacturers would further incentivize EV purchases.
Conclusion
The Green New Deal has conflated an unrealistic set of Green fantasies with a full-throated Socialist agenda. Many seem to have blindly endorsed it as a neat bunch of Green ideals perhaps without an awareness of the anti-Capitalist, Socialist motives of its authors and this legislation itself or perhaps because of it. This Socialist agenda is highly unlikely to become law in the foreseeable future as it is way left of the vast majority of Americans. It’s endorsement by Democratic Presidential candidates increases the chances that Donald Trump is re-elected. If Democrats aren’t careful, they risk a major rebuke in both houses of congress in 2020. There are a number of policies that could make a real impact on reducing greenhouse gases that could get broad and perhaps even bi-partisan support if they aren’t lost in the morass created by the Green New Deal. Paradoxically, the risk is that the Green New Deal does significant damage to the Green cause.
