Representative Alexandria Ocasio-Cortez (D — NY) and Senator Ed Markey (D — MA) introduced a fourteen-page environmental bill last month, known as the Green New Deal (GND). The GND calls for major environmental and economic changes to be made in the USA. The bill encompasses several aspects of the U.S., from “meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources” to “guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the U.S.”
82 percent of the Democratic Party have reported that they feel climate change is a very real issue. The United Nations Intergovernmental Panel on Climate Change released a report on climate change in October of 2018 stating that the world has 12 years to dramatically decrease global warming before serious repercussions begin. Some current repercussions scientists have seen due to global warming are rising sea levels, the melting of polar ice caps, and the increase in global temperature from 0.8 to 1.4 Celsius.
The GND’s goal is for zero carbon emissions, which will be achieved over a 10-year period. For this to be possible, the entire power system in the country would need to be converted into renewable resources. Civil Engineer and Professor at Stanford University, Mark Jacobson, said in series of papers that currently, the technology is available for this to happen. Jacobson said, “Right now, we have about 90 percent or 95 percent of the technology we need [...] we don’t need a technological miracle to solve this problem [...] the bottom line is we just need to deploy, deploy, deploy.” However, the emphasis must be on the implementation of a brand new system.
The implementation of a new power system raises concerns for many individuals, specifically how a massive overhaul of funding this program would be possible. One source of funding that non-profit newspaper Common Dreams discusses is a method similar to how Franklin D. Roosevelt funded the New Deal. Roosevelt used the public bank Reconstruction Finance Corporation (RFC) in the RFC Act. The RFC Act passed in 1932, was provided with stock of $500 million by the U.S. Treasury, and could extend credit to $1.5 billion. For the GND, the Federal Reserve is a potential source of funding available. Common Dreams said in an article that “[t]he Fed could use the same tool to buy bonds earmarked for a Green New Deal; since it returns its profits to the Treasury after deducting its costs, the bonds would be nearly interest-free. If they were rolled over from year to year, the government would in effect be issuing new money.”
To redo climate grids and create a universal power structure that is energy efficient, the economy would also see an increase. In an article on the GND published in Forbes, professor and economist Robert Hockett said, “The Green New Deal aims to stoke massive production of a vast array of new products, from solar panels to windmills to new battery and charging station technologies to green power grids and hydroelectric power generation facilities. The new production and new productivity that renewed infrastructure will bring will be virtually unprecedented in our nation’s history. This will be more than enough to absorb all new money spent into our economy.”
According to the Colorado Sun, for the GND to be funded, based off of countries who have previously made green transitions in their countries, the U.S. would need to spend $194 billion annually. This is about five percent of the U.S. gross domestic product, and it would be spent for the next five years, totalling $970 billion.
The Colorado Sun examines current methods of paying for this policy endeavor through passing secondary legislation through a carbon tax. “A $20 tax per metric ton of carbon that climbs over time at a pace slightly higher than inflation would raise around $96 billion in revenue each year – covering just under half the estimated cost. At the same time, it would reduce carbon emissions by 11.1 billion metric tons through 2030.” The Colorado Sun finds that there is an additional $89 billion that must be funded.
The Hill wrote a piece on funding for the GND with one basic solution: “Make the fossil fuel industry pay.” The Hill reports that, beginning in the ‘50s, the fossil fuel industries knew the damaging effects their industries were having on the environment. However, “rather than reduce those risks, these corporations worked in collusion to subvert climate science, interfere with policy, and ultimately undermine the need for urgent action at a global scale.” Some of the most devastating effects from these practices have been on minority groups — people living in poverty, and indigenous populations. According to Market Watch, Exxon Mobil earned $279.8 billion just last year.
If the responsibility for financing the global warming crisis was placed back into the hands of the various groups such as Exxon Mobil, BP, and Shell, the funding would be secured and the groups responsible would have to take ownership for the harm they have created over decades of mistreatment.