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The Green New Deal: The Birth of a Notion

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Joel Stronberg's picture
President The JBS Group

Stronberg is a senior executive and attorney with over 40 years of experience in federal and state energy, environmental and sustainability issues. He is the founder and principal of The JBS...

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  • Jan 20, 2019

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The Green New Deal came roaring into Capital City along with a very assertive group of progressive freshman Democratic House members. Originally part of the policies proposed by Congresswoman Alexandria Ocasio-Cortez (D-NY) and supported by the youth climate organization the Sunrise Movement, the concept is now being signed onto by members of Congress and hundreds of and social justice environmental organizations.

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Conceptually the GND rests on three primary pillars.

  • Transitioning the power sector to 100 percent renewables by 2030/35.
  • Making the transition to a low-carbon economy in a just manner—providing job training and employment at a living wage to everyone wanting a job.
  • Investing heavily in the development of technologies and community infrastructure.

Although there is hardly a quibble in the climate community over the need to make a rapid transition to a low-carbon economy, there are and will be battles fought over how to get there. As the bones of the basic concept are fleshed out over the next year or more, there will be myriad proposed additions and subtractions—some of which will lead to contentious disputes within Democratic ranks. These will be the kind of arguments that reflect the core beliefs of identity groups within the Democratic Party, e.g., progressive, establishment and blue dog. I don’t think it an exaggeration to suggest that how these battles are fought and decided could determine the outcome of the 2020 elections.

As I had discussed in Part 2 of the series, establishment of a select House committee was the first major flashpoint. Representative Ocasio-Cortez, the Sunrise Movement, and other Congressional and organizational GND supporters had proposed a select committee with full powers, e.g., subpoena, to draft the actual legislation. What Speaker Pelosi (D-CA) created was more of a fact-finding body. Her instruction to Congresswoman Castor (D-FL), the chair of the Committee, is to “prepare the way with evidence’ for energy conservation and other climate change mitigation legislation.”

Although tensions over the Select Committee appear to have lessened, they continue to lie just below the surface along with other potential political conflicts like those discussed below. How members of Congress and climate hawks deal with these issues as “friends” will serve as examples to others. Their reaction will, in turn, foretell the chance of enlisting moderate suburban swing voters (Part 1) to the cause of climate defense and justice. The “flashpoints” listed below are not in hierarchal order.

Campaign contributions—the color of money

The progressive-left had demanded that members of the Select Committee forswear campaign contributions from political action committees tied to the oil, gas and coal industries. The demand was denied. However, it is part of a larger issue creating conflicts within the Democratic Party.

In August the Democratic National Committee (DNC) reversed the decision it made in May banning contributions from the fossil-fuel industry. The ban was accompanied by the very bold statement that the industry is drowning our democracy in a tidal wave of dark oil money and has deceived the public about the impacts of climate change and corrupted our political system. The resolution banning the contributions was proposed by Christine Pelosi, a party activist, and the Speaker’s daughter.

The DNC Chair, Tom Perez, said the reason for re-opening the door again to contributions from the fossil fuel industry was that the earlier resolution prevented the industry’s workers from contributing to campaigns. Workers often donate through political action committees (PACs) rather than directly.

In dollars and cents, banning fossil-fuel monies doesn’t cause much of a problem—in general—for Democrats. In 2016 the energy and natural resource sector, including fossil fuel producers and mining companies, kicked in $2.6 million to the DNC. Oil and gas companies accounted for $7.6 million in various Democratic races. The sector directly contributed $53.7 million to Republicans.

There are, however, individual Democrats that could be particularly affected. Beto O’Rourke, for example, had received $430,000 from fossil fuel interests for his unsuccessful run against Senator Cruz (R-TX). There is substantial opposition to the prohibition within Democratic ranks. For example, Congressman Frank Pallone (D-NY), chairman of the House Energy and Commerce Committee, is flatly opposed to the prohibition—

Ultimately you have to finance your campaign, and if you start saying that just because you’re on a committee, that nobody associated with any of the issues that the committee faces can contribute, I just think that’s the wrong way to go and too limiting. Where do you draw the line?

Pallone took $30,900 from the oil and gas industry and $1,000 from an environmental group in the 2017-18 election cycle. He also received $108, 599 from electric utilities—powered mostly by natural gas.

Transition to 100 percent renewable energy by 2030 to 2040

It is fairly well agreed that at a point in time greenhouse gas (GHG) emissions should be net-zero. Where that point is in the future is a matter of debate. The UN Intergovernmental Panel on Climate Change (IPCC) has indicated that to stay at or below 1.5°C aspirational threshold requires slashing global GHG emissions 45 percent below 2010 levels by 2030 and reaching net zero by 2050. GND supporters have chosen to set the date for zero emissions in the US at 2030/2035 depending on who you’re asking.

There is much debate over the feasibility of converting the nation’s entire electric system to renewables in just over a decade—even though wind and solar are rapidly becoming cost competitive even with today’s low natural gas prices.

The 627 organizations that signed onto a letter submitted to House members supporting the GND are well aware of the magnitude of what they are asking:

This shift [to net zero] will necessitate upgrading our electricity grid to be smart, efficient, and decentralized, with the ability to incorporate battery storage and distributed energy systems that are democratically governed. In addition, Congress must bring the outdated regulation of electricity into the twenty-first century, encouraging public and community ownership overpower infrastructure and electricity choice, as well as permitting distributed energy sources, including rooftop and community solar programs to supply the grid.

GND supporters are also calling for 100 percent decarbonization of the transportation sector by 2040, including autos, trucks, planes, trains, and ships. In addition to direct government investments, the groups want federal incentives for the private market, e.g., tax credits for electric vehicles.

Certain technologies and policies are to be actively opposed

The letter sent to House members spoke not only of the technologies the signatories were supporting but also what the 627 organizations promised to oppose vigorously. The last paragraph of the letter reads:

…we will vigorously oppose any legislation that: (1) rolls back existing environmental, health, and other protections, (2) protects fossil fuel and other dirty energy polluters from liability, or (3) promotes corporate schemes that place profits over community burdens and benefits, including market-based mechanisms and technology options such as carbon and emissions trading and offsets, carbon capture and storage, nuclear power, waste-to-energy, and biomass energy.

The list of things the signatories have promised to oppose vigorously, except for rolling back existing protections, conflicts one way or another with the positions of a substantial portion of the climate defense community.

Until Ocasio-Cortez broke onto the scene with her version of a Green New Deal, the leading “in one fell swoop” policy candidate for responding to climate change was a national carbon tax. The tax is being championed by both Democrats and Republicans and even by the oil industry.

Two of the leading carbon tax proponents are the Climate Leadership Council (CLC) and the Citizens Climate Lobby (CCL). The plan they are proposing named—Baker-Shultz Carbon Dividends—after two well-respected Republican secretaries of state has garnered a large following over the past several years including from big oil companies and environmental groups. Just recently, all four of the still-living former Federal Reserve chairs, nearly 30 Nobel economists and all but one former chair of the White House’s Council of Economic Advisers have signed onto a statement laying out their support for a carbon tax policy.

Baker-Shultz proposes that all tax revenues collected are to be returned to the American people on an equal and quarterly basis via dividend checks, direct deposits or contributions to their individual retirement accounts. CLC estimates that at a rate of $40/ton the average family of four would receive about $2,000 a year. There are a variety of carbon-tax plans out there. Several of which suggest using a portion of the funds for infrastructure and other social investments.

One of the “four pillars” of Baker-Shultz is a stick with a very large carrot at the end of it and is likely the main reason that oil companies have been willing to board the train. In CLC’s own words:

The final pillar is the elimination of regulations that are no longer necessary upon the enactment of a rising carbon fee whose longevity is secured by the popularity of dividends. Many, though not all, of the Obama-era carbon dioxide regulations, could be safely phased out, including an outright repeal of the Clean Power Plan. Robust carbon fees would also make possible protecting companies from federal and state tort liability for historic emissions.

Saikat Chakrabarti, Occasion-Cortez’s chief of staff, is quoted saying …a carbon tax or cap-and-trade policy is not significant enough to tackle climate change. Carbon pricing is a tiny part of the Green New Deal. The debate over carbon pricing to me isn’t all that interesting. The debate should be about how many windmills, solar farms, and electric vehicles we can build.

Chakrabarti seems to underplay the reasons why carbon pricing is a non-starter for progressive progressives. However, my “spidey sense” tells me that the inevitable conflict between these proposed climate defense measures is DNA-based for groups like the Sunrise Movement and companies like ExxonMobil. How members of Congress and candidates for the presidency deal with it will tell us a lot not only about the nation’s capacity to combat climate change but the outcome of the 2020 elections.

There will be less pitched battles over the definition of “renewable” and especially over the role of nuclear and carbon capture and sequestration (CCS). Carbon capture, in particular, is on the “approved measures” list of several large environmental groups like NRDC. NRDC has testified in support of bipartisan legislation sponsored by Senators Heitkamp, Capito, Whitehouse, Barrasso, Kaine and Graham that expands an existing tax incentive for CCS technologies.

Jobs and a Just Transition

Like the Depression-era program it was named for, one of GND’s core objectives is to put all American’s to work in quality high paying jobs—or at least jobs that pay enough for a family to live on. Keeping the Earth below the 1.5-degree Celsius threshold is about more than energy. It is in the words of GND supporters and others about:

Building new energy, waste, transportation and housing infrastructure, designed to serve climate resilience and human needs; retrofitting millions of buildings to conserve energy and other resources; and, actively restoring natural ecosystems to protect communities from climate change, are but a few ways to build a sustainable, low carbon economy where no one is left behind during this change.

A transition as large as the one necessary to achieve a net-zero carbon economy would be a massive job creator for nearly every skill-type. The magnitude of the transition would be sufficiently large numbers to make up for jobs lost in other industries, e.g., coal, oil, and gas, as well as to bring marginalized and forgotten workers back into the economy. 

Size and timing count in this case. Whereas a transition over 50 years would string out employment of human resources, shortening the period requires a more immediate and concerted effort. It is here that the comparisons to the Depression-era New Deal and World War II mobilization are perhaps the strongest.

Michael Grunwald reminds us, however, that the American Recovery and Reinvestment Act of 2009 (ARRA) was pitched as a job creator at a time when the economy was losing hundreds of thousands of jobs each month. Nevertheless, Republicans savaged it in unison as a Porkulus boondoggle, while Democrats mostly quibbled about it as either too small or too big, excessively or insufficiently focused on long-term priorities, with too much money for this or not enough money for that.

The problem of the very breadth of the GND can be particularly seen in the “jobs guarantee.” Consider how establishment Democratic House members responded to the ARRA and are now responding to the “specifics” of the GND. It is arguable that mainstream Democrats will have difficulty stretching a bill that deals with the physical environment wide enough to address economic injustice.

Moreover, there will be traditional Democratic constituent groups, e.g., labor, that will oppose the rapid closure of the oil and gas industry. Oil and gas industry workers, e.g., pipefitters and welders, will never be convinced that shutting down the oil and gas industry won’t throw them out of work. The currently strong economy and tight labor markets make it that much more difficult. If it was hard enough to convince some Democrats to support the ARRA in an economy that was losing 800,000 jobs a month, what will happen now that the economy is strong and labor supplies are tight?

It is not to say that establishment Democrats and working Americans are opposed to lifting everyone’ standard of living. It is to say that an argument dependent upon (any) Congress and the White to act smoothly and efficiently is just not very practical.

Paying for it all

The price tag for the GND and how to pay for it account for two more elephants in the room. The truth is no one really knows what it would cost, although most estimates are in the neighborhood of $12-20 trillion. I wouldn’t give credence to any estimate at the moment. Costing out the program requires knowing what the plan entails; since it hasn’t been written yet, all estimates are mere speculation.

As a contributing source of capital, Ocasio-Cortez has suggested a 70 percent income tax rate for earners making over $10 million a year. In 2010, the Green Party had proposed to pay for their version of a Green New Deal through a 70 percent reduction in defense spending. If Congress were to remove all supports for non-renewable fuels or passed a carbon tax, those funds could also provide a portion of the needed capital.

Another early flashpoint for GND supporters came in the vote on House operating procedures at the beginning of the 116th Congress. Speaker Pelosi and her leadership team proposed a PayGo (pay-as-you-go) rule. The rule requires new legislation to be paired with either a new funding source, e.g., a tax, or a reduction from somewhere else like defense programs. The Congressional Progressive Caucus was concerned about the rule preventing passage of programs big-ticket items like Medicare-for-all, infrastructure and the GND.

The rule, as much as anything, is a dig at Trumplicans for having run the deficit up to historic levels as a function of their tax cut legislation. Democrats adopting the PayGo rule illustrates just how turned around the political world has become. In any event, progressives have been assured by House leadership that the rule won’t be used to defeat core Democratic initiatives like climate defense.

Representative Ro Kahanna (D-CA) a second-term Congressman and a leading proponent of the GND has stated: the purpose of the Green New Deal is to shake people up and say climate change is a serious crisis, Congress needs to act, and it needs to be doing so in a way that is job generating and helps communities left behind.

If the GND does nothing else, it will have met its goal of shaking people up.

As I had written in Part 1 of this series most people are already willing to say global climate change is a serious problem. Whether voters have been shaken up in large enough numbers to demand action by the federal government and whether Congress will heed their call only time will tell.

Finally, there are no illusions about the chance of any proposed Green New Deal legislation becoming law as long as Trump is in the White House and #Trumplicans continue to rule the Senate. The next 12 months, however, will be a critical test of the climate defenders in and out of Congress and their ability to craft the policies required to combat climate change and dispense environmental justice. Should they fail, it will not be for a lack of options but the inability to compromise.

In the final part of the Slouching Towards Suburbia, I’ll be discussing the need for the NGD to be supported by more than Democrats and more of the lessons learned from previous efforts like the ARRA and how they might apply.

Joel Stronberg's picture
Thank Joel for the Post!
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John Simonelli's picture
John Simonelli on Feb 14, 2019

It may be the birth of a notion but there are so many assumptions made in justifing the entire package, they run the risk of shooting themselves in the foot.

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